How to Start Day Trading With $500 with (almost) No Risk | Real Trading (2024)

Day trading is a popular way that people use to make money in the internet. While day trading has always been used, it gained much prominence during the Covid-19 pandemic when the prices of most financial assets like stocks and cryptocurrencies jumped.

These incredible profit opportunities, combined with a low start-up cost, have prompted many people, even those without experience or much capital to invest, to approach the discipline. It is now estimated that millions of people day trade stocks in the US every day.

Although some initial investment is usually required to see attractive profits, it is also possible to start with a small account and build your success step by step. In this article, we will look at how to start trading with $500.

Caution about small accounts

In the past, it was relatively difficult for people to start day trading with about $500 or less. This changed in 2011 when Robinhood was launched.

Robinhood provides a platform where anyone in the US can trade stocks without paying a commission. Fearing the rising competition, most brokers like Interactive Brokers, Schwab, and TD Ameritrade also shifted to commission-free accounts.

These accounts make it possible for one to trade with any amount. Also, the concept of fractional shares mean that you can buy any shares with any amount. For example, with $500, you can buy half a stock of a company whose shares are trading at $1000.

However, there are two main cautions to remember.

First, if you are trading with about $500 in the US, Pattern Day Trader (PDT) rules will come in, which will limit the number of trades that you can execute.

Second, day trading with a small account has its own risks. In most periods, it means that you can lose your entire account within a short period. This is unlike people with big accounts who can recover their funds with enough time.

Steps to start day trading with $500

There are several steps that you can follow when you want to start day trading with $500. Here are the ones we recommend.

Educate yourself about trading

The first important step to follow when you want to start day trading is education. This is a very crucial stage that most people tend to avoid.

Instead, in most cases, they find an advert about trading, create a demo account, make few profits, and then move to a live account. This is wrong.

We recommend that you spend a few months educating yourself about trading. In this, you can use freely available resources like YouTube videos (we recommend TraderTv) and web content to learn about the market. You can also enrol to a paid online course and learn more about how the market works.

There are many important lessons that you need to learn, including:

  • fundamental and technical analysis
  • how stocks and other assets work
  • risk management
  • news trading
  • types of orders in the market
  • financial management

You should also do practical trading using a demo account when learning. A demo is a free account that gives you access to the live market. You can use it to create your trading strategy and test how it works before you move to a real account.

Remember to be realistic with your demo account. In this, you should ensure that the account has a virtual balance of $500. A common mistake is where people create a demo account with thousands or millions of virtual dollars.

Set realistic expectations

A common mistake among many beginners is having the wrong expectations. A common issue is where they believe that they can double their money within a few weeks.

However, this is not always the case. And the quest to double your $500 will expose you to significant risks since you can lose a similar amount.

Therefore, if you have $500, we recommend that you focus on growing these funds gradually over time. This means setting a goal of making just a few dollars every day. For example, if you make $10 per day, that will equate to $50 per week and $200 in a month, which is almost 50% return.

Use a demo account well

As mentioned, a demo account is an important tool that most brokers provide. It is an account that lets you trade virtual money without putting your funds at risk. Demo accounts are mostly used by beginner traders. Experienced traders use them to test their new strategies.

The right way to use a demo account is to set it in a way that mirrors the current situation. In this case, create one that has a virtual $500 and set the same leverage you intend to use. Also, use the same strategy that you intend to use in the live account.

Related »How to Switch From Paper Trading to Live Trading

Keep track of every step

We recommend that you keep a day trading journal, which is a document that tracks your every move. A journal can be a soft or hard copy document where you list all your trades.

It can have the asset, execution price, reason for executing it, and the outcome. You can use a paper or other soft copy tools like Evernote and OneNote to journal your trades.

Doing this will help you keep track of your trading process and make you avoid repeating the same mistakes.

Master risk management strategies

Risk management is essential for all types of traders and investors. It is, in particular, important for people trading with small accounts.

Some popular examples of risk management strategies are:

  • having small leverage
  • not over-trading
  • having a stop-loss and a take-profit
  • not leaving open positions overnight
  • learning more about correlations.

A stop-loss will stop your trade when it reaches a certain loss threshold while a take-profit will stop it when you make a certain profit. Leaving your positions open overnight will expose you to a significant risk of a major gap when the market opens.

Start with small trades

As part of managing your risks, we recommend that you start with small trades. With $500, ensure that your trades make you just a few dollars each.

As We wrote above, a strategy that makes you $10 per day will be a good one. Doing the opposite will expose you to significant risks since it will increase the potential loss that you can make.

Related »What Is Position Sizing?

Adopt easy-win strategies

Finally, we recommend that you adopt some easy-win trading strategies. A good example of such a strategy is trend-following, where you decide to buy an asset that is already rising or short one that is already falling.

You can also embrace scalping, where you execute several trades and exit whenever it turns profitable.

Consider Real Trading accountprop trading

As an additional option, you should consider proprietary trading, which is one of the most popular approaches to making money. Prop trading is where you sign up to a company and then start trading with their funds (and software). Real Trading is one of the best and biggest players in the industry.

The company makes it possible for anyone to start a trading floor managing thousands of dollars. These people are simply required to deposit $500 for the trading software known as PPRo8™.

They then get access to the TMS solution, a demo account that gives them access to many global markets. If you are successful in the demo account, you will have access to more money that you can use to trade.

How to Start with US


In this article, we have looked at the best approach to start day trading when you have limited capital. As you have seen, it is a relatively simple process, which can be summarized as get educated and creating a strategy.

We have also explained how prop trading can simplify how you trade without allocating too much of your money.

External useful resources

  • Can I start successfully day trading with a minimum of $500? – Quora
How to Start Day Trading With $500 with (almost) No Risk | Real Trading (2024)


How to Start Day Trading With $500 with (almost) No Risk | Real Trading? ›

With careful planning and execution, it is possible to start day trading with just $500. However, you need to be aware of the risks and be prepared to lose your investment.

Can you day trade with only $500? ›

With careful planning and execution, it is possible to start day trading with just $500. However, you need to be aware of the risks and be prepared to lose your investment.

Is it hard to make $100 a day trading? ›

You're really probably going to need closer to 4,000 or $5,000 in order to make that $100 a day consistently. And ultimately it's going to be a couple of trades a week where you total $500 a week, so it's going to take a little bit more work.

How to do trading without risk? ›

Scan business news and bookmark reliable online news outlets.
  1. Set Aside Funds. Assess and commit to the amount of capital you're willing to risk on each trade. ...
  2. Set Aside Time. ...
  3. Start Small. ...
  4. Avoid Penny Stocks. ...
  5. Time Those Trades. ...
  6. Cut Losses With Limit Orders. ...
  7. Be Realistic About Profits. ...
  8. Reflect on Investment Behavior.
Apr 19, 2024

What is a good amount to start day trading with? ›

A risk/reward ratio of 1-to-1.5 is fairly conservative and reflects the opportunities that occur all day, every day, in the stock market. The starting capital of $30,000 is also just an example of a balance with which to start day-trading stocks. You will need more if you wish to trade higher-priced stocks.

Can you make $200 a day day trading? ›

A common approach for new day traders is to start with a goal of $200 per day and work up to $800-$1000 over time. Small winners are better than home runs because it forces you to stay on your plan and use discipline. Sure, you'll hit a big winner every now and then, but consistency is the real key to day trading.

What leverage is good for $500? ›

Leverage of 1:100 means that with $500 in the account, the trader has $50,000 of credit funds provided by the broker to open trades. So 1:100 leverage is the best leverage to be used in forex trading.

How realistic is it to make money day trading? ›

A study of 1,600 day traders over the course of two years found that 97% of individuals who day traded for more than 300 days lost money. Succeeding in day trading takes more than diligence and education, but a significant amount of luck. Fees and taxes.

Can I make 1000 per day from trading? ›

Earning Rs. 1000 per day in the share market requires knowledge, discipline, and a well-defined strategy. Whether you choose day trading, swing trading, fundamental analysis, or any other approach, remember that success takes time and effort. The share market can be highly rewarding but carries inherent risks.

How much money do I need to make $1000 a day trading? ›

In order to make $1,000 in a day on a stock that increases 10% in a day, you would have to invest $10,000 in that stock. If you wanted to trade on margin, you could invest a little more than $5,000 and still make $1,000 on that trade.

What is the trick for trading? ›

You must keep emotions under control and define your profit goals. If the stock has reached that level, book profits and exit. Choose the right trading platform: One of many prudent intraday trading tricks involves choosing the right trading platform with all the tools you need to make the right decisions.

What is the 1 risk rule in trading? ›

The 1% risk rule means not risking more than 1% of account capital on a single trade. It doesn't mean only putting 1% of your capital into a trade. Put as much capital as you wish, but if the trade is losing more than 1% of your total capital, close the position.

What is the safest trading method? ›

The safest option strategy is one that involves limited risk, such as buying protective puts or employing conservative covered call writing.

How much money do I need to invest to make $1000 a month? ›

A stock portfolio focused on dividends can generate $1,000 per month or more in perpetual passive income, Mircea Iosif wrote on Medium. “For example, at a 4% dividend yield, you would need a portfolio worth $300,000.

How to day trade with $500? ›

Steps to start day trading with $500
  1. Educate yourself about trading. The first important step to follow when you want to start day trading is education. ...
  2. Set realistic expectations. ...
  3. Use a demo account well. ...
  4. Keep track of every step. ...
  5. Master risk management strategies. ...
  6. Start with small trades. ...
  7. Adopt easy-win strategies.
Mar 23, 2023

How many lots can I trade with $500? ›

You have $500 on your account. With 1:100 leverage, this amount will be enough to make 50 trades of 0.01 lot each.

Can you day trade with less than $1000? ›

Believe it or not, you can start forex day trading with $1,000 or even less. It requires mastering position sizing and managing risks, but if you navigate your way to success, the rewards can be significant.

What is the minimum amount you can trade with? ›

There is no minimum amount that you need to trade in the stock market.

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