A. It’s an important question to ask when you start trading. Some people put too much money into their account and blow it within a few weeks.
Others deposit very little and blow their account from other factors.
I always recommend starting a trading account with at least R5,000.
I have four important reasons why:
Reason #1: You can take more trades
You’ll have enough funds to take on a couple of trades, at any one time.
As traders, we like to hold around 4 to 5 trades at a time. This way we can hedge our positions for when one or two do not go our way.
Reason #2: Don’t worry about the costs
When you have a decent portfolio size, you can make up for any hidden trading costs that the broker will charge you.
These costs include: Platform fees, brokerage, interest and taxes.
Reason #3: Not much to worry and fear
The most important factor with trading is your mindset.
With a portfolio size of R5,000, you won’t have to worry about losing too much on any one trade.
Just make sure you follow the guidelines in Pickpocket Trader and Red Hot Storm Trader which will give you solid money management rules to never blow your account.
Reason #4: Enjoy trading a variety of markets
There is a minimum deposit when it comes to taking trades.
The more expensive a share is, the more money you’ll need to put down in order to take a trade.
However, with an account of at least R5,000, in my experience, you’ll be able to take trading positions on pretty much 95% of any local and international market.
I’m talking about shares, commodities and mini-indices.
Note: You’ll read more about the costs, margins and how to guides when you join Red Hot Storm Trader and Pickpocket Trader.
What a Pickpocket Trader has to share:
“Yes, I want to congratulate Pickpocket Trader. I can’t believe what I saw. If you want to start trading, the very first thing is to do is to join Pickpocket Trader. Without this don’t even try to trade. I lost a lot of money in the past, but now I know I am with the right people which I can trust. I will be a member for live thank you very much Pickpocket Trader"
~ Gert Meiring
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Q. "I've been following Pickpocket Trader service for a few months and I must say I'm happy about the four winning trades in a row. I find that Trader X has a strategy where he likes holding onto trades for several weeks. However, I would like to incorporate a strategy alongside with his and would like to hear what you think…
Essentially, I'll buy at the price Trader X sends out, and if the market moves in my favour, I will then buy more at a higher price. This way I'll have a higher exposure where I will bank double the profits than if I only bought one lot of CFDS. Is this a smart move and could you give an example on what my entry price will end off as? Thank you in advance."
A. Excellent strategy.
In fact, I have a similar strategy which I call “Buy high and buy higher”.
The trick is to always add onto a winning position and NEVER onto a losing position.
This technique is mostly used when a trader holds onto a medium-term trade (few weeks) and may like to buy more of their position in order to bank more profits when they sell their double exposed position.
I’ll give you an easy example where Tom uses the buy high, buy higher and sell the highest:
Number of CFDs to buy: 200
Entry price R100
Take profit: R130
Share price: R110
Now Tom feels pretty good with his position. He decides to buy another 200 CFDs at the higher price of R110.
As he has bought more at a different price, the entry price moves from the original price.
To calculate the new price, you'll use this easy calculation.
New entry price = (Original buying price + Scaled in price) ÷ 2
= (R100 + R110) ÷ 2
This takes Tom’s new entry price to R105.00.
If the trade hits the take profit level at R130, Tom will bank over double the amounts of profits with his scaled in position than if he stuck to his original 200 CFDs position.
Analyst, Red Hot Storm Trader