Education · Stage 1 · 08
How much account you need
There are two questions hiding inside this one. What is the smallest account that can open a position has a simple answer, and it is the wrong question. What is the smallest account that survives being wrong repeatedly is the real one, and it is arithmetic — you can do it yourself in five minutes.
Mak · 5 min read · Stage 1, article 8 of 13
Nothing on this page is a recommendation about how much to risk or how much to deposit. It is the arithmetic, laid out so that the numbers argue with you instead of a stranger doing it. What the numbers mean for you is your decision, and the risk disclosure is worth reading before you make it.
The number brokers advertise
Intraday margin is what makes «open an account with a few hundred» possible. It is a true statement about what the platform will let you do, and it answers a question nobody should be asking.
An account holding barely more than the margin is one ordinary move from being closed out by the broker rather than by you. The position does not need to be wrong for long — it needs to be wrong while the balance is thin.
Build the number from the other end
Start from what a single loss costs and work backwards. Three inputs, one line of multiplication:
account needed = (stop in points × point value) ÷ the fraction of the account you are willing to lose on one trade
Say the stop is forty points — a normal distance on this contract, not a tight one — and you are prepared to lose one per cent of the account on a trade:
| MNQ — micro | NQ — mini | |
|---|---|---|
| One point | $2 | $20 |
| A 40-point stop costs | $80 | $800 |
| If that is 1% of the account | $8,000 | $80,000 |
| If that is 2% of the account | $4,000 | $40,000 |
Read the mini column again. One contract, one normal stop, one per cent, and the account that supports it is not a small account. This is the arithmetic behind why so many people trade a size they cannot actually afford: they sized from the margin requirement, which said two thousand, instead of from the stop, which says something else entirely.
And it is the strongest argument for the micro. Same chart, same plan, same stop, one tenth of the account required to run it honestly.
What a run of losses does
Losses do not arrive politely spaced out. They come in runs — that is a property of anything with randomness in it, not a sign that something has broken.
So the question is not «how much do I lose if I am wrong», but «where is the account after ten of those in a row, and can I still trade the same way when I get there». That is pure multiplication:
The bottom row is the one that ends accounts, and rarely by arithmetic alone. Down forty per cent, almost nobody keeps trading the same size the same way — they either stop, or they raise the size to recover faster. Both change the plan, at the worst possible moment.
The fixed costs have a floor
Article 7 listed the monthly costs: data and platform. On a small account they are not a detail, they are a headwind.
A hundred a month against a $2,000 account is five per cent per month — before a single trade, and before the spread. Against $20,000 it is a rounding error. Same bill, completely different business, and it is the least discussed reason very small accounts struggle.
Where funded accounts fit
There is a whole industry offering to supply the capital: you pay a fee, pass an evaluation under their rules, and trade their money for a share of the result. It is a real answer to this article's question, with its own rules, its own failure modes and its own arithmetic.
It sits alongside this path rather than inside it, and the page is already written: prop and funded accounts. What is worth saying in stage 1 is only this — it changes whose money is at risk, and it does not change one line of the arithmetic above. The stop is still the stop.
The five-minute version
- Decide the stop distance your approach actually needs, in points.
- Multiply by the point value of the contract. That is one loss, in money.
- Decide what fraction of the account that loss is allowed to be.
- Divide. That is the account the plan requires.
- Check the monthly fixed costs against it, and check where ten losses in a row leave you.
If the answer is larger than what you have, there are exactly three honest responses: a smaller contract, a shorter stop the approach can genuinely live with, or not yet. Increasing the fraction in step three is not on the list — it is the same trade with the arithmetic moved somewhere you cannot see it.