How to become a day trader with $100 is a very common question we get asked and to be honest, you should really consider asking yourself WHY you want to start with $100 in the first place.
$100 is very little but it doesn’t mean it isn’t enough to get started and we will lay out the reasons why starting with $100 is a good place to start & why you should it approach it differently.
In this article, we will reveal how to become a day trader with $100, including the positives and negatives for and against doing so, and we also lay out a step-by-step plan for you to take away and get started with day trading.
Why do people want to learn how to become a day trader with $100
The core reason why many people want to learn how to become a day trader with $100 is due to the low barrier of entry to the markets.
$100 is nothing really.
It’s enough for you to think about spending, but not enough to worry about losing.
With easy-to-open trading accounts, low initial deposits and cheap brokers to execute your trades through – heavy marketing from these brokers encourage lower deposits to get you through the trading door.
People, or beginner traders, look for a low deposit to test the water or some strategies they’ve read about online – and if it’s a success, then they would go ahead and grow the account and deposit more funds.
That is why people want to learn with a small amount and start growing it over time to something more sizeable.
Although, in theory this is a great idea.
In practise, it is almost impossible – and we’ll explain why below…
Is it even possible to become a day trader with $100?
It’s a question you have to ask yourself:
Is it even possible?
Here is the truth:
Starting with $100 means you are stacking the odds aggressively against you.
The thing you must think about is that with $100:
- you will not become rich over night
- it’s quite difficult
- it may only last 2-4 trades
- you are stacking the odds against you
- if this is your first time trading, you’re likely to lose the full amount
Even with the odds stacked against you, and the brokers* know this, you can become a day trader with $100 – you just have to know exactly how to trade, have a rigorous trading plan and understand the fundamentals of the markets competently.
*Note the biggest myth:
Brokers don’t make money on you losing money your money. Brokers work as agents between you and the markets/liquidity providers and charge you a fee to execute your trade.
Positives of starting with $100
Before investing in any asset, you always must weigh up your positives and negatives.
It’s important to get a clear objective of what can be achieved with $100.
So, let’s review the positives of starting with $100 for day trading:
Little starting capital
You don’t need much to get started for day trading, some brokers will even let you open up a brokerage account with just $20 – but this is far too low and expectations of generating any sizeable profit from this are virtually zero.
Easier to try the market
With lower starting capital it allows you to open an account and go through the process of getting started easily. With just $100 you can open and test some of your trading ideas easily.
Maximum you can lose is just $100 (unless you deposit more)
Make sure you have stop losses in place, this will help you stick to minimize losses. With just $100 in the account, that is the amount of money that is at risk and therefore could potentially lose. As long as you follow the appropriate risk management.
You can trade with as low as $10 margin, or micro-lots, which is roughly $0.10 a pip
Starting with a small amount as a forex trader is a rite-of-passage for some of the most successful traders. With only $100 you are going to focus on smaller trade sizes which will allow you to progress naturally and seamlessly throughout your trading career.
The underlying tone of the positives here is that with $100 you will be focusing only on small trades which means it’ll be hard to blow up the account immediately. That being said, you can still easily lose $100 in the markets which is why we’ll talk about the negatives next…
Negatives of starting with $100
The negatives here should be strongly considered due to the nature of the markets and the odds stacked against you, there is a chance that your money will just get swallowed up. With that being said, here are the key points that you should be made aware of before progressing:
Low balance means you have to be deadly accurate
If you want to grow your account balance, then you have to be precise with EVERY trade.
Depending on the asset, EUR/USD margin could be as little as $10 or as high as $30. This means that you need at least this amount in your account to open the trade, let alone have any consideration for the stop loss.
Odds stacked against you…
This is meant in the nicest way possible but with a 30% margin requirement, 1 pip spread (or commission charged) you’d have to make sure you are 100% accurate for at least 5-10 trades in a row with a risk-reward of at least 2:1.
With a 30% margin, that means you may only have the opportunity to open up 3 trades. Do you see how the odds are against you now?
It’s not impossible, but if you are looking to get started and learn how to become a day trader with $100 and you are happy with the odds stacked against you, then it’s time you should read our step-by-step guide.
How to become a day trader with $100 – Step By Step Guide
Step 1: Learn how to trade the forex markets which focus on day trading techniques, there are plenty of resources online (paid and free) – you should check out our free forex trading course though ;).
Step 1.1 – Demo trade for a good few days or weeks until you are used to the markets and platforms and practised trading the markets during the day vigorously.
Step 1.2 – Once you are confident in the strategies, trading and risk management – then start small with $100 to open an account and practise with small trades to begin with.
Step 2: Find a trusted and regulated broker – preferably one in your country and is regulated by the Tier 1 regulators: FCA, SEC, CySEC. [Read our review of one of the most trusted brokers around]
Step 3: Open an account with $100 to get the account active
Step 4: Start trading with your funds.
Step 5: Once confident, deposit more funds so you can take advantage of your trading skills and generate larger trades to increase the odds in your favour.
Wrapping it up
Naturally, day trading is difficult due to its many trading opportunities, high leverage and frequent data flow from central banks, governments and companies which can instantly change the direction of the market – especially when you are unaware of the news being released!
That being said, it is not impossible to become a day trader with $100 because of the leverage you can take advantage of these small movements creating significant returns over a short period of time.
However, with such a low balance of $100 – it is much better for you to keep testing on a demo account using live market data through a broker or use it as a stepping stone to a larger deposit in the future.
Either way, you’ll get good market experience trading with your money, which an invaluable experience.