How Much Money Do You Need to Trade Full Time? (2024)

Are you curious how much money you need to trade full time?

In this post, we run through some examples of how much money you will likely require, based on your trading results, to be able to replace your current income.

Many 9-5 workers envy the lifestyle full timetradersappear to have and the income they can generate, all while working from the comfort of their home.

But is it truly that easy?

In this video, Duncan Cooper FX outlines what is required in terms of your trading results, the income you desire, and the amount of capital you need to hit your monthly income targets.

Duncan also outlines his five trading capital examples, to cover as many types of traders as possible.

Which type of trader are you?

Click play on the video below to find out.

Every trader has a different situation. Each has different trading results, and different capital amounts available to trade. I'm going to walk you through a model I use, and you can adapt it to your own so you can determine how much money you may need to trade full-time.

Your trading results

Let's get into the first topic. If you consider trading full time, you'll need to prove that you can create a consistent return per month and that you can show a consistent return over a 12-month period.

In the example I'm going to walk you through, you would need to be able to show an average return of 6% per month.

If you can only make a 2% return per month, you'll need three times the trading capital to achieve the example I'm going to work through.

How much income do you need per month?

How much do you need to earn per month before tax?

As an example, I'm going to use a $6,000 trading income per month. And I'm basing this on the average wage in Australia, but you may need much more. When trading, you would need to create a $6,000 average return per month.

Let's look at creating a $6,000 trading income per month based on achieving a 6% return per month. The trading capital we try would be $6,000 divided by six then times 100, which is $100,000.

You could trade with less capital, but you would need to risk more per trade and create a larger percentage return on your trading capital.

How much trading capital do you need?

Based on this simple model, the spreadsheet below highlights how much capital you would need depending on the percentage return you can achieve per month.

Table one shows that to create a $6,000 trading income per month, based on achieving a 6% return per month, you'd require $100,000 of trading capital. And this would be the perfect amount of trading capital required to achieve the trading income goal of $6,000 per month.

However, if you can only make a return of 2% per month, you would require $300,000 of trading capital. But if you're a very consistent trader and can make 10% per month, you do not require $60,000 of trading capital.

Should you use leverage?

Of course, you could use the power of leverage to reduce the amount of capital required, as shown in table two, but then you need to make a larger return per month to achieve the trading income goal of $6,000 per month.

The key to this is to match the capital amount required to your own personal trading experience level.

Depending on your level of experience, you may prefer to use option one or two as you set out on your journey to trading full-time: options, four and five of the most experienced traders.

And you would need to use a 200 to oneleverageor more to achieve the trading income goal of $6,000 per month.

This content may have been written by a third party. ACY makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied by any third-party. This content is information only, and does not constitute financial, investment or other advice on which you can rely.