How Much Should You Trade?
This is a common question I get. It will probably be different for everyone, but I would suggest that trading be kept small unless you are very well financed. That way, the way the market moves and not your own financial condition will influence how you trade. On the other hand, if you don’t start out with enough money, it becomes more difficult to hang in there if the market turns on you.
Well financed in a mini account would be $10,000 or more. If you don’t have much money to start with and still want to get started then use good money management techniques. No more than 10% traded at any one time and no more than 3-5% on any one trade. Also you should not take more then a 10% draw down before you close all trades and get hold of where the market is. There will always be another trade. Do not base your whole trading career on one trade. I have heard of people that put $3000 in there account on a credit card and lost it all in 10 minutes during a news announcement. I also have heard of people that were complaining about only having make 100% return on their account in 8 months. Which do you think would be better?
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