How much much time do I need?
The good news is: you don’t have to spend every waking hour on trading, in fact its not good to do so and its likely to be detrimental to your trading. You won’t earn more from trading because you’ve put more time in than somebody else. It does not work like that. What matters is how much time you have and making the most of that time. We recommend that you identify the time you generally have available each day or week and then aim to ensure that you build your trading habits around your personal lifestyle. Talk to us we can help you identify the right trading strategies and the right markets to suit your regular availability.
Weekend Warrior Traders
Weekends can be the ideal time for many to learn how to trade. Successful weekend traders set trades based on trading levels and signals from daily and weekly time-frames. They can usually set up their orders at the weekend and alerts if needed. Many then leave the trades until the next weekend or set alarms for occasional management.
Early Bird Traders
Checking markets once a day and setting trades looking at daily and hourly time frames is often how many traders work. Quite often they will set trade orders on their home PC, coffee and breakfast in hand, and then head off to their full time job.
These traders may set longer term trades and sit back and work on other things or trade short time frames on an intra-day basis. We have many Live Trade Room members that run their own businesses from their home desk and can switch between trading and their other job.
Afternoon/Tea Time Traders
These traders are usually interested in setting trades in the opening session the US markets and checking how the European Market close.
The evening can be good for setting trades on daily time frames that you won’t look at again until the next evening and their are also intra-day trading opportunities on US markets – our Algo Yank strategy is designed particularly for this period.
How much money should I deposit?
How much you decide to deposit in a spread bet or CFD account is a personal decision based on your own personal financial circumstances and your trading objectives. The greater the deposit however, the greater is your opportunity to generate profit. There is also good research which suggests that traders who deposit higher amounts are more likely to succeed. Under-funding an account reduces the ability to use good money management and trading discipline. It is the number one reason new traders blow their account.
You can open an account with just £200 but it will not be possible to make any significant gains from such a small starting base. When possible we recommend that a good starting deposit for traders is £5,000.
It is important that you only put into an account as much as you can afford to lose. Trading is a risky business and the majority fail, so you need to take steps to ensure you get a proper trading education. Traders fail with small accounts because the individual gains and losses of their trades using a small account are small and they don’t care enough about these smaller sums. Traders with big accounts – but greater than they can really afford – fail because their trades are driven by the fear of losing. You need to decide the sweet spot for you: big enough to care about the gains and losses, but not more than you can afford. Remember, if you are going to spend your time doing this then you want it to be worthwhile.
Spread bet and CFD accounts are leveraged accounts that multiplies the amount of your account you are putting on each trade. When you take a trade you need to have left in your account enough to cover the margin and the margin of any other trades you may also have on. See table below on leverage and margin.
£200 – £1500 : Toe in the water traders
You can fund with just £200, but please do not expect to make large sums from it. With this sort of account size you’ll get to learn how to use the trading platform. Your potential gains will be small and you will not be able to take more than one trade at a time. The size of the trade will be small and you are unlikely to be able to scale out as you will be trading at minimum size most of the time. This means you will not be able to stay in longer swing trades and get the potential larger gains these bring. You will not be able to use proper money management techniques.
£1,500 – £3,000 : Dabbler traders
The majority of new traders start with account sizes like this. They want to learn properly and use proper money management techniques but they find when they do that the rewards are small – a 1:1 risk:reward trade at 2% risk management of a £1,000 account would just make £20 a time. They find it takes a lot of trades and time until they are making the sort of sums that enables them to withdraw earnings. Many have to ask themselves if they care enough about the value of each trade verses the time put in.
£3,000 – £10,000 : Builder traders
The traders are looking to build their account so that they can earn properly from it in the future. These traders are usually able to run a number of trades and strategies at the same time and therefore able to balance their risk better and use proper risk money management techniques. They are likely to be more flexible to market conditions.
£10,000 – £25,000 : Earner traders
£25,000 – £75,000 : Serious traders