Day trading is one of the best ways to invest in the financial markets. Unlike standard investing, where you put in money for a long period of time, day trading means you open and close all your trades intraday.
Trades are not held overnight. Day traders profit from short-term price fluctuations. Day traders can trade currency, stocks, commodities, cryptocurrency and more.
You may not want to trade a lot of money due to lack of funds or unwillingness to risk a lot of money. We’ll show you whether it’s possible to start trading with a very small amount like $100.
Main Takeaways: How to Start Day Trading with $100
- Step 1: Select a brokerage. Finding an online broker that allows you to trade in the style you want will help you successfully conduct trades.
- Step 2: Pick the securities you want to trade. Do your research and decide what you want to start trading.
- Step 3: Work out a strategy. Before you begin making your trades, decide what strategy you want to stick to.
- Step 4: Begin trading. Once you have your account set up and have taken the necessary prerequisite steps, you can start day trading.
Can You Day Trade With $100?
Technically, you can trade with a start capital of only $100 if your broker allows. However, it will never be successful if your strategy is not carefully calculated. For this reason, you should support the idea to trade with only $100 through detailed research, a thorough calculation of your strategic outcomes and strict risk management rules.
How to Start Day Trading with $100
We’ll show you what to look for in a broker, how to choose security, how to build your strategy and how to open your first trade.
Step 1: Find a Brokerage
If you want to trade successfully with only $100, your broker needs to meet some requirements from your side.
It’ll be better if your broker charges you based on spread rather than based on commission. Commission-based models usually have a minimum charge. Trading small amounts of a commission-based model will trigger that minimum charge for every trade.
The spread fee is the better alternative, as it charges you considering the amount you trade.
Your broker of choice should have a minimum deposit requirement of $100 or less. Otherwise, you can’t deposit just $100.
Leverage and Margin
If you trade
$50 x 0.002 = $0.1 profit
This is why you need to trade on margin with leverage. If you are in the United States, you can trade with a maximum leverage of 50:1. If you are in the European Union, then your maximum leverage is 30:1.
This is due to domestic regulations. The maximum leverage is different if your location is different, too. In Australia, for example, you can find maximum leverage as high as 1,500:1.
Here are a few of our favorite online brokers for day trading.
|Broker||Best For||Commissions||Account Minimum||Choose your platform|
Get started securely through Webull’s website
1 Minute Review
Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit. Webull is widely considered one of the best Robinhood alternatives.
||$6.95 for fewer than 30 trades/quarter.||$0||
Get started securely through eTrade’s website
1 Minute Review
E-Trade is best known for its user-friendly browser, desktop and mobile trading platforms and its extensive research and educational information. E-Trade may not have the lowest commissions compared to discount online brokers, but customers certainly get their money’s worth from E-Trade’s comprehensive offerings.
60 days of commission-free trades with deposit of $10,000 or more
||$0.005 per share minimum $1 and maximum 0.5% of trade value; volume discount available||$0 for cash account, or a margin account with $2,000||
Get started securely through Interactive Brokers’s website
1 Minute Review
If you consider yourself a sure-footed professional trader, Interactive Brokers might be a major possibility for you, particularly if you’re adept at navigating tricky trading platforms (can you say 124 option indicators?) or have done more than just dipped your toe a “coupla times” into the complex world of international markets.
Lower minimum activity requirements ($3/month) and opening account minimum requirement ($3,000) for clients 25 and younger.
Step 2: Choose Securities
Aim for higher gains when trading small amounts of money, otherwise, your account will grow at a very slow pace.
You can achieve higher gains on securities with higher volatility. Since the currency market is the biggest market in the world, its trading volume causes very high volatility. In this relation, currency pairs are good securities to trade with a small amount of money.
But which Forex pairs to trade? Since your account is very small, you need to keep costs and fees as low as possible. You can keep the costs low by trading the well-known forex majors:
The major currency pairs are the ones that cost less in terms of spread. At the same time, they are the most volatile forex pairs.
Step 3: Determine Strategy
Your strategy is crucial for your success with such a small amount of money for trading. You need to consider when to trade, the amount you’ll invest in each trade, when you’ll enter a trade, how you will manage your risk and when you’ll exit a trade.
When to Trade
A good time to trade is during market session overlaps. For example, the EUR/USD and the GBP/USD are most volatile in the time when the London markets and the U.S. markets are both open.
The U.K. and Europe conduct transactions in GBP and EUR and the U.S. conducts transactions in USD. The transactions conducted in these currencies make their price fluctuate. Since the GBP, the EUR and the USD fluctuate, the GBP/USD and the EUR/USD forex pairs are very volatile at this time.
This is an image that shows the forex market overlaps. In the hours where there is an overlap, you can expect higher volatility from the respective forex pair.
Amount per Trade
The best approach is to invest a large amount of your $100 in each trade but to have no more than a single trade open. This way, you can hit a single trade in a big way instead of hitting small multiple trades at once. You can invest 60% of your bankroll in each trade and at the same time to have no more than one trade open.
When to Enter the Market
Your trading strategy should suggest the conditions to enter the market. You can use various technical indicators to do this. Some of these indicators are:
- Candle patterns
- Chart patterns
You can use such indicators to determine specific market conditions and to discover trends. You can aim for high returns if you ride a trend.
When you’re trading in normal conditions with a comfortably high amount of money, you shouldn’t risk more than 2% of your capital per trade.
However, since you have only $100, you can take a bit higher risk as your losses are limited to only what you have in our account. A risk of 3% per trade is reasonable for these trading conditions.
Three percent risk per trade means $100 x 0.03 = $3 maximum risk in each deal. You can trade with a maximum leverage of 50:1 in the U.S. This will give you a total buying power of 50 x $100 = $5,000.
If you invest 60% of your bank in each trade, this is $3,000 per trade. Your stop-loss order should be at a percentage distance from your entry price equal to 3/ 3,000 = 0.001 or 0.1%. In other words, if you buy the EUR/USD at 1.1450, your stop-loss order should stay 0.1% below the entry price.
You can calculate it this way:
1.1450 x (1 – 0.001) = 1.1439
1.1439 is the level of your stop-loss order once you take these conditions into consideration.
Conditions to Exit a Trade
The $100 bankroll trading requires a more aggressive approach, so here are some different exit rules.
Use a trailing stop-loss order instead of a regular one. Still stick to the same risk management rules, but with a trailing stop. Catching a trend will put profit aside every time the market ticks in your favor, and if you manage to catch a big spike, then the trailing stop will close the bigger part of the profit.
In this case, you will only exit the market if the price hits your stop and you will stay in the market as long as it is trending in your favor.
Success Rate and Profit-Loss Ratio
If you manage to get 3:1 profit-loss ratio with 30% success rate, you risk $3 per trade aiming for $9 and you succeed in only 30% of the trades, you will generate around 7% profit per 10 trades using the above rules.
Here is how your account will look after 1,000 trades.
If your account grows by 7% per 10 trades, your $100 bankroll will grow to more than $80,000 after 1,000 trades. Of course, this is a very straightforward example and 7% per 10 trades is a big profit, which not many traders achieve.
The suggested strategy involves only one trade at a time due to the low initial bankroll. You can hardly make more than 10-15 trades a week with this strategy. If you conduct 2 trades per day, you’ll need 500 trading days to reach these results with the above success rate. Since every trading year has about 250 trading days, you will need 2 years of strict trading to achieve these results.
Notice that the above trading rules you will need 250 trades (around half a year) to reach $500 and 360 trades (around 9 months) to reach $1,000 in your bank.
On each of these milestones, you can always consider a different strategy where you can trade with less risk (1-2%), invest less in a single trade (25%-30%) and open more than one trade.
Step 4: Start Trading
Next, create an account. Navigate to the official website of the broker and choose the account type. Remember, you’re looking for an account that lets you trade with only $100 on margin. You’ll need to submit personal details like email, address and phone number and will receive an email message to confirm your email address.
You’ll need to send some identity confirmation, which is a standard procedure and may need to provide some income information, though this is unlikely to happen if you want to fund your account with only $100.
After you confirm your account, you will need to fund it in order to trade. Use a preferred payment method to do so. Download the trading platform of your broker and log in with the details the broker sent to your email address. Make sure you adjust the leverage to the desired level.
Navigate to the market watch and find the forex pair you want to trade. This could be the EUR/USD or the GBP/USD. Open the trading box related to the forex pair and choose the trading amount. Make sure you set up a stop-loss order or a trailing stop-loss to control the risk.
Get Started Day Trading
Day trading could be a stressful job for inexperienced traders. This is why some people decide to try day trading with small amounts first. Trading with a bankroll of only $100 is possible but will require some extra amendments in order to reflect your account on an acceptable pace.
You can always try this trading approach on a demo account to see if you can handle it. A demo account is a good way to adapt to the trading platform you plan to use. You can $100 account trading once you feel comfortable on the demo account.