Risk Management

Account Sizing: How Much Capital to Start With

Starting with the right account size prevents you from taking on too much risk per trade due to minimum sizes.

Key rules

1. Account must be large enough to allow proper position sizing
2. US PDT rule requires $25K minimum for day trading stocks
3. Start with enough that 1% risk per trade is practically executable
4. Never risk borrowed money or money needed for living expenses
5. Grow account slowly and consistently — not with large risky trades

With a $500 account and a minimum order of 1 share at $50, your minimum trade is 10% of the account — far too much. Your account should be large enough that your minimum position represents no more than 2% of equity.

For day trading U.S. stocks, the Pattern Day Trader rule requires $25,000 minimum.