How much money do you need to get started to trade good penny stocks? That is a question you’ll hear asked a lot from those interested in giving trading a go. The reality is that there is no right answer here. However, you should probably get started as soon as possible.
You see, in order to become a great trader you need skills. The way to develop skills is from learning how do the right things at the right time. Of course, this is developed from experience. And in order to gain experience, you’ve got to be in the game.
Develop a winning process
With that said, your focus should be on learning, and developing a winning process. If you’re able to do that, you’re trading account should grow. On the other hand, starting off with trading a lot of money won’t buy you skills in trading good penny stocks.
Too many people get caught up with a specific number, like I will start when I get X amount of dollars together. This type of thinking will set you back. Not only that, what if you find out that trading good penny stocks isn’t for you. The sooner you can find out… the better.
Creating that winning strategy will take time and experience
Another excuse you’ll hear is that they need X amount of capital to execute their strategy. If you’re new to trading, you don’t have a strategy yet. You’re more or less experimenting, trying to figure out what your style is going to be. In addition, learning how to execute, and manage risk while trying to earn. Screen time will help you develop those skills not money.
If you’re starting off really small, that might limit you on the number of stocks you can trade. However, there is plenty of opportunity outside of high priced stocks and ETFs.
Dedicate time and do your homework
Another key is to be realistic. Ask yourself, how much time can you dedicate to your trading, journaling, and doing homework. The amount of time you have should be reflective to the type of trading you’ll be doing with good penny stocks.
Now, if you think you’ll take a couple grand and turn into millions that is not very realistic. Better to set smaller goals and scale them up. After all, no one buys a basketball, goes shooting in the backyard and expects to be playing in the NBA the next week. Don’t forget, just because it’s easy to set up a trading account, doesn’t mean that the markets are not highly competitive.
Lack of funds should not be a reason why you don’t have a trading account setup. Instead, focus on setting up a game plan, learning the ins and outs, along with developing a winning process. This will all take time, which is why it’s best to get started as soon as possible. Focus on process goals and less on monetary goals in the beginning and you’ll have success trading good penny stocks.