How Much Money Do You Need to Start Trading Stocks?

Something most beginners get completely wrong about trading, is how much money you actually need to start.

There’s a belief that you need tens of thousands of dollars to trade stocks, leaving you stuck analyzing charts instead of actually trading.

In this article we’ll cover three key things: why your account size doesn’t matter as much as you think, why stocks beat options for beginners, and the mindset to trade like a pro. Number 3 is probably the most important. 

If you think you need a huge account to start, hopefully this will give you clarity and a clear path forward.

Why Account Size Is Relative—Focus on Percentage Gains

The first big takeaway is that your account size is relative. It doesn’t determine your success as a trader. It’s “relative” because success isn’t tied to your starting amount, it’s about percentages, risk management, and growth over time. You can start small (even $100–$500) and scale up by adding funds later, without the initial size limiting your potential.

Instead of obsessing over the dollar amounts, focus on percentage gains.

Why?

Because you might not control how much you have to start with right now, but you can always add more over time—through side income, savings, or whatever. You can however focus on your percentage gains through follow a good trading strategy.

You don’t need thousands to get going.

Brokers like Robinhood, Charles Schwab, or Fidelity let you start with as little as $500, or even less, thanks to fractional shares. You could begin with $100 if you wanted. The key is building skills that deliver consistent percentages. A 10% gain on a $1,000 account is $100, while on a $100,000 account, it’s $10,000. But the strategy and discipline? Totally the same.

Obviously you will earn more with a large starting balance, but if that’s out of your control right now, don’t focus on it. In our trading group at Skool.com/trading, a recent poll showed half of the respondents were starting with under $1000, while the other half were starting with over $5000.

Why Stocks Are Safer Than Options for Beginners

Moving on to point two:

If you’re new, stick to stocks over options. Options might sound tempting for small accounts because of the leverage, but they’re way more complex and risky—think time decay, volatility, and the fact that stats show 70-90% of options traders lose money.

Instead, go for stocks with fractional shares. Platforms like Robinhood make it easy: If Tesla’s trading at $400 and you only want to risk 1% of your small account, buy a fraction—no need to drop the full amount. It’s simple, lower risk, and avoids the headaches of options.

Options can get manipulated by big institutions, especially with expiration dates forcing worthless expires. We’ve seen it in crypto flash crashes, like the one on October 10th after Trump’s tariff comments, where coins plunged 50%. Leverage amplifies losses, and for beginners, it’s a trap.

Stick to buying bullish stocks with clear momentum. No expiration dates means you can hold through dips and wait for recovery. It’s less stressful and perfect for small accounts.

The Proper Mindset: Trade to Grow Wealth, Not for Income

Finally, the most important part: Adopt the right mindset. Focus on long-term growth, not using trading as a quick income source. Treating it like a job to pay bills? That leads to emotional, risky decisions.

Instead, aim for steady wealth building through disciplined momentum trading. Compound those small wins over time. Use a solid plan to keep emotions in check—avoid FOMO or panic-selling. Only trade money you can afford to grow, not what you need for rent.

If you have a small account, don’t chase income. Let trading compound while you build other income streams to fund your account.

Wrapping It Up: Start Small, Trade Smart

To recap: Small accounts absolutely work. Focus on percentage gains you can control, not the starting balance you can’t change right away.

Use fractional shares for stocks instead of risky options—it’s safer and simpler for beginners.

And most importantly, trade to grow your wealth long-term, not to chase short-term income.

Hopefully you found this useful. As always if you need a low stress strategy and you have not joined our free group on Skool, come join now: https://Skool.com/trading