How much money do you need to start trading?

The broker's minimum is not the real answer

Some brokers have no minimum deposit and allow fractional shares, which means you can buy a small slice of an expensive share. That makes starting cheap. It does not make trading safe: most beginners lose money in their first year, and a small account can still be wiped out by a few bad trades.

Only use money you can afford to lose

Money for rent, bills, emergency savings and debts should never be in a trading account. A useful test: if the whole amount disappeared, would your life stay the same? If not, it is too much.

Fees matter more on small accounts

Fixed costs hurt a small account most. Check these before opening any account:

• Commission per trade, which can be a flat amount that is large next to a small position.
• The spread, the gap between the buy and sell price, which you pay on every trade.
• Currency conversion fees if your account is in a different currency to the assets.
• Inactivity, withdrawal or platform fees.

Position size and risk limit the useful minimum

A common rule is to risk no more than 1% of your account on any one trade. On a 500 account that is 5. With a typical stop, that allows only tiny positions, so profits and losses are tiny as well. That is not a flaw: small stakes while learning is a feature.

A sensible way to start

Practise on simulated money until your results are consistent over many trades, then begin with a small amount you can afford to lose and increase it only when your process is working, not because you feel lucky.