Starting Trading with £200!

 Go back to Contracts for Difference FAQs

Starting to Trade Stocks

Q.: Can I start trading with £100?

A: NO!! Putting £100 is very unrealistic. I will resist the urge to say 'take it out and spend it'. £100 in a CFD account with £10 each way to trade is for crying out loud. You should open a free demo CFD practice account and get into real trading only when you have a few thousands to start with (I recommend minimum of £5000).

Q.: I was thinking about making a small initial investment (say £200) to pursue shares trading on a daily basis?

A: Honestly, £200 is too small an amount to start with. Assuming you are going to pay about GBP10 to make a round-trade straightaway (i.e. buy and sell immediately) you would already need to be at least 10% ahead to breakeven - and that's putting it all on one stock. You might find it demoralising to discover the putting in a lot of work doesn't end up giving you any reward.

I would suggest not buying securities in less than 500 pound tranches and maybe even 1000 pounds. I do understand your worry about losing sizable amounts of monies but you need to consider trading costs.

As I've already stressed £200 is very small an amount for daily trading and sure there is a remote possibility that you will buy something that multiplies 10 fold within a year but the odds are very much against that. If you still want to have a try, don't put it into more than one share as your money will just end up disappearing in dealing commissions. Just research one good company and stick to that until you have more money to split up (hopefully!).

As for CFDs if £200 is all you can afford to lose then margin products don't have any place in your portfolio.

 ...Continues here - Risk per Trade and Position Sizing