I love stocks under $10 (penny stocks) because of the extraordinary potential they provide to grow a small account quickly.
“Today makes the 3rd consecutive Friday with realized profit over $5,000!!! On an account that started under $15,000!!! Thank you for all you do. This last month has truly been nothing short of amazing!!! Long live Jason Bond Picks!” ~ Scott S.
And nothing is more exciting than turning a few thousand dollars into hundreds of thousands.
“Hey Jason, I never did thank you a few years ago on your FNMA call when it was $.50 and ran to $2. I remember you said if FNMA gets into the $.70’s to take a position and you did, I did as well and 2 weeks after FNMA touched $5, I made $165,100 profit, it changed my life, again thanks.” ~ Gonzalo O.
But how much money do you actually need to get started?
Truth is, that’s different for every trader.
… after teaching thousands of clients over the last 4 years I believe I can narrow it down into 3 different mindsets.
$0 – STUDENT
I spent $70,000 in tuition over 6 years in college plus loss of income during that time for a Masters in Education to teach in a NYS public school. Hired immediately out of college I made $429,804 from 2001 – 2011 teaching. Over the 16 years I averaged $22,500.
After leaving teaching in 2011 I recorded this 8 hour instructional course with 12 concise lessons. Following the lessons I’ve now made over $500,000 in trading profits in 4 years while teaching thousands of clients my strategy. That’s $125,000 yearly compared to $22,500.
Learning to be a teacher cost me a lot of money, time and loss of income during that time.
Learning to trade didn’t cost me a dime but it did take some time. Think or Swim’s paperMoney is a real trading platform you can download which gives you access to a virtual margin account and $100,000 of “play money”.
Once you’ve downloaded paperMoney do the following:
- Watch all 60 of my video lessons while reading the watch list daily
- Take trades from the watch list or my real time email / text alerts
- Put no more than 1/5 of the portfolio into any swing trade or $20,000 into 5 trades at a time, this prevents blowing up your account if 1 of 5 gets wiped out
- Monitor the trades across 1 – 4 days (swing trading)
- Seek 5 – 20% profit in that time and always take half your shares off between 5 – 10% profit
- Pay yourself religiously, think like a machine
- Stop loss around 3%
If you do the steps above you’ll see exactly how my system works, where I succeed, where I mess up and how not only to survive but to thrive. You will learn a ton about trading during that time, without risking any real money and be better prepared to proceed to real money trading.
$2,000 – SNIPER
If your not interested in taking my advice on paperMoney and want to start right away, but only have a few thousand dollars, you’re a sniper. A sniper operates behind enemy lines, often in very dangerous conditions. They go all in, shooting to kill, before moving onto their next target. If a sniper gets caught behind enemy lines, it’s usually over for the sniper.
Traders with a few thousand dollars do not have the luxury of spreading it equally amongst 5 picks, like the example above. Instead, the sniper goes all in, looking for explosive returns quickly, while cutting loss with intense discipline. Successful snipers often make the best traders because the same discipline needed to grow $2,000 into hundreds of thousands will quickly help them turn hundreds of thousands into millions. But remember, you only have to get caught behind enemy lines once to wipe out a small account which then makes the few thousand the cost of tuition on Wall Street.
$10,000 – TRADER
You’re in the game if you have $10,000+, period.
The most important part of survival is staying in the game and the best way to stay in the game is NOT going all in. With $10,000+ you can start to spread the $10,000 across 5 picks to protect yourself from losing your entire account if 1 pick goes really bad, something the sniper, above, doesn’t have the luxury of. This doesn’t mean the sniper won’t make it out alive, it’s just more difficult for the sniper.
With $2,000 in 5 different stocks and a 75% win rate, similar to what I have across the last 4 years, you can quickly see how hitting small wins can build your portfolio fast.
Assuming every 4 trades you hit nothing more than 5% wins on 3 and a 3% loss on 1 you’re winning 75% of the time and would have made a return of 84% in your first 20 trades building the balance from $10,000 to $18,405.
Keep hitting 5% winners every 3 trades with a 3% loser on the 4th and after 20 more trades your $10,000 is now $32,858 or a 229%.
And now you see how I’m 156% +$146,285 in 2015, swing trading part time, when the S&P 500 is flat.
So how much money do you need to get started?
I’ll let you decide but after working with thousands of clients over the last 4 years, that’s been my experience. There’s no right or wrong selection, it simply comes down to what works for you.
I’ve traded with $10,000 in my account and half a million and almost never put more than 1/5 of the portfolio in any trade to avoid catastrophe. So when I had $10,000 I made $2,000 bets looking for 10% profit or $200 on wins, -$60 on losses. When I had a half million in the portfolio I put $100,000 in trades looking for $10,000 on wins, -$3,000 on losses. I bring this up because I didn’t find it to be any easier the bigger the account grew. Discipline is always priority. Cutting losses fast and paying yourself 10%, rinse and repeat.
At the end of the day it’s just a numbers game and those who embrace that have the best chance of surviving.
Remember, I have clients in high school trading on custodial accounts. I have clients using paperMoney. I have clients with $1,000 and others with millions.
Ultimately I provide a service that’s grounded in winning about 70% of the time and in doing so I’ve made a half million in 4 years, doing this part time in my pajamas from home.
And that my friends is how much you need to start trading.