How much should i start trading with?
Are you a new trader think of this most popular question how much should I start trading with? because today we will prove that this most popular question is wrong instead we will try to find the alternative to this problem so that you don’t ask this question again.
Let’s understand the trading
Trading in other words called “Business” or “exchange of things” but here we are going to discuss the share market trading. In simple words “buying and selling of stocks”.
Let’s take A, B and C trading in the share market. A buys a stock at $8 and sells it stock for $10 to B and B buys it and sells it to C for $15 and after some time the demand for the same stock falls and the now priced at $9. This way A got a profit of $2, B got a profit of $5 and C took the loss of $6.
Here we can understand that when the demand increases the price increases and if the demand falls then the price will also fall and this is how trading works.
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How much should I start trading with?
Before you ask yourself “How much should I start trading with?” ask how much capital you are ok to loss. because trading is a business and losses in business happen frequently. Thus if you ok with loss of $1000 you can start your trading with $1000 or any amount that does not affect your condition of living once lost.
Emergency fund before Trading?
You need to save capital before trading because in case you loss money you do need to worry about the impact on your living here are the tips to follow
- calculate your 6 months of expenses (Calculate 1 month’s expenses and multiply it by 6).
- Make sure that you and your family have life cover and health cover.
- SIP or long-term investment life of 10+ years.
Once you follow all 3 above points and now you are left with some money and this money can be used for trading.
Final Notes
We can clearly understand that before we ask how much should start trading with. instead, it’s better to ask how much money you are ok to lose.
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