Prologue:
There has been from time to time questions asked by numerous people on this forum about what they need to get started in trading. Most of these questions have cropped up in different threads and in different times. Never have I seen a definitive thread which details the sort of investment you need to get started as a daytrader. Perhaps this is because mostly these questions have come from n00bs who have had no or a limited exposure to trading. So, I feel the urge, as an experienced n00b to clear the air once and for all, of course with input from the pros. BAV's post about software has been an inspiration, so let me thank him. Enough of beating about the bush, let's get on with the game now.
Pre-requisites:
(In no particular order of preference, and by no means a complete list)
Capital
Typcally, the amount you have to have. You use the seed capital to trade. Also, you need to have stashed away an equal amount (or more) to fall back on if you get wiped out.
Total Capital = Seed Capital + 2/3 x (Seed capital)
where Seed Capital >= 100K
Bank Account
Opening a bank account does not cost a fortune, and we allocate 1K as the tops.
Broker
Depending on which exchange(s) you wish to trade this can vary a lot. Again I would put a tag of 1K-5K here, but this needs to be revisited.
Intenet Connection
You sure need something that's fast. And you dont want download liimits -- this is one of surest ways to get screwed bigtime if you do. Airtel gives you good connectivity (across India) for about 1.5K pm. There is a setup cost of about 3K. Getting wifi of course is a tad more costly. Someone having wifi can update us.
A backup connection is a good idea for the rainy days. YMMV.
Software
Earmark about 6K-10K for something good. We'll revisit our budget later.
Hardware
Two machines, at least, prefereably inter-connected. You want high speed CPUs and at least one of them should have a good GPU (after all a good chart is worth a terabyte of data). One should be used as a trading terminal and the other as a backup, data server and whatever else you want to use it for.
Looks like you can get a decent bargain for two within about 60K-100K. A laptop and a desktop -- probably?
Throw in a UPS/inverter for about 3K. Some might want an all-in-one as well but is this required?
Data
Choose one with backfill. This will be around 5K a month. But there are choices.
Books
A subjective thing. But a small library is called for. A budget of 15K-25K hopefully suffices (most of the good books are from foreign authors/publishers and each one costs an arm and a leg). The ability to read softcopy significantly reduces this cost. But then its easier to take a book to the shitbox than your laptop.
Epilogue
The figures are subject to change. Once we have a satisfactory list, we can probably also work out the fixed cost and running costs. And then dive in!
There has been from time to time questions asked by numerous people on this forum about what they need to get started in trading. Most of these questions have cropped up in different threads and in different times. Never have I seen a definitive thread which details the sort of investment you need to get started as a daytrader. Perhaps this is because mostly these questions have come from n00bs who have had no or a limited exposure to trading. So, I feel the urge, as an experienced n00b to clear the air once and for all, of course with input from the pros. BAV's post about software has been an inspiration, so let me thank him. Enough of beating about the bush, let's get on with the game now.
Pre-requisites:
(In no particular order of preference, and by no means a complete list)
- Capital
- Bank account
- Broker
- Internet Connection
- Software
- Hardware
- Data
- Books
Capital
Typcally, the amount you have to have. You use the seed capital to trade. Also, you need to have stashed away an equal amount (or more) to fall back on if you get wiped out.
Total Capital = Seed Capital + 2/3 x (Seed capital)
where Seed Capital >= 100K
Bank Account
Opening a bank account does not cost a fortune, and we allocate 1K as the tops.
Broker
Depending on which exchange(s) you wish to trade this can vary a lot. Again I would put a tag of 1K-5K here, but this needs to be revisited.
Intenet Connection
You sure need something that's fast. And you dont want download liimits -- this is one of surest ways to get screwed bigtime if you do. Airtel gives you good connectivity (across India) for about 1.5K pm. There is a setup cost of about 3K. Getting wifi of course is a tad more costly. Someone having wifi can update us.
A backup connection is a good idea for the rainy days. YMMV.
Software
Earmark about 6K-10K for something good. We'll revisit our budget later.
Hardware
Two machines, at least, prefereably inter-connected. You want high speed CPUs and at least one of them should have a good GPU (after all a good chart is worth a terabyte of data). One should be used as a trading terminal and the other as a backup, data server and whatever else you want to use it for.
Looks like you can get a decent bargain for two within about 60K-100K. A laptop and a desktop -- probably?
Throw in a UPS/inverter for about 3K. Some might want an all-in-one as well but is this required?
Data
Choose one with backfill. This will be around 5K a month. But there are choices.
Books
A subjective thing. But a small library is called for. A budget of 15K-25K hopefully suffices (most of the good books are from foreign authors/publishers and each one costs an arm and a leg). The ability to read softcopy significantly reduces this cost. But then its easier to take a book to the shitbox than your laptop.
Epilogue
The figures are subject to change. Once we have a satisfactory list, we can probably also work out the fixed cost and running costs. And then dive in!