How Much Should You Invest Per Trade in the Stock Market
Another common question I get asked frequently is how much should I invest in my portfolio per trade?
Let's say you have $2,000 in your account and you see a trade you want to get into.
- How much money should you invest?
- What amount of your portfolio should you put into the trade?
Starting Rates
I generally recommend looking for a minimum of about $500.
- You can increase this price as you get more confident trading and as you become more successful.
When you first started in trading it can be a little more difficult and feel a little bit riskier when you're investing your hard-earned money.
So again, with $2,000 I would say invest 25% of that, which comes out to $500.
- At the beginning of your investment, I'd recommend putting in about 25%
As your account grows and you reach closer to $10,000 I'd recommend scaling that percentage back a bit.
- At that point, $1,000 or $1,500 trades are good, and then you can level off around $2,000.
When you feel more confident putting in more money, you probably won't even need the general guideline
Virtual Trading
Your number one key before you actually start is virtual trading.
There are many platforms out there, but my top recommendation is Sure Trader.
- All you have to do is go to is suretrader.com and they have a free demo that allows you to automatically start virtual trading.
They set up the real market scenario for you on a real trading platform and you can practice with fake money to invest and test out your skills.
I always recommend you practice your theories and techniques on a virtual trading platform before you start putting in real money.
Conclusion
Start off with a minimum of $500 and about 25% of your portfolio max.
I wouldn't go higher than that.
- Even if you see a really good trade, don't be greedy.
Many people lose their interest in the stock market or lose a lot of money because they've put their entire savings or portfolio in the trade and haven't considered proper risk management.
