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Trading with < $1000 is an utter waste of your time. Interactive Brokers has a $10k lower account limit for your own good.

paulgb 7y ago
Investing under $1000, especially with commission-free trades, is a good way to learn the basics mechanics of stock trading.
- JumpCrisscross 7y ago
  > Investing under $1000, especially with commission-free trades, is a good way to learn the basics mechanics of stock trading Individual investors are at a huge disadvantage when it comes to intraday trading. For everything other than a child's hobby account, intended to teach emotional stability through gains and losses, a <$1,000 stock-trading account is value destroying.
  - ISL 7y ago
    That education, for a child or an adult, is primarily what one gains from a <$1k trading account. That, alone, is worth more than $1k. Also, one need not trade a small account intraday. I make small trades, but they are always with a multi-year perspective. Give me limit orders and small commissions, and I am happy. (N.B. I use a different broker/don't have a first-hand perspective on Robinhood.)
    - crystaldev 7y ago
      Unrelated but usually you should place a market order usually, not limit. Limit orders take longer to fill, your idea of limits is probably wrong and will lose money compared to a fair market match, it's not worth taking the risk that your order won't be filled, etc.
      - ISL 7y ago
        If an order isn't filled at a price at which I find reasonable, that is okay with me. A market order will fill at any price. I learned that lesson the day that a market order of mine filled at a price I deemed unreasonable. The key to avoiding faffing around with limit orders not filling when you want immediate execution is to place a reasonable limit that accounts for the day's volatility. At other times, I'll place a limit order and let it stand for weeks. When it fills, the counterparty and I are both happy.
        crystaldev 7y ago
        Different strokes I guess. Getting into/out of the position is my top priority and I see more downside in failing to fill the order than in failing to shave a penny or two.
        ISL 7y ago
        Totally agreed on different strokes. If speed matters most, there's nothing like a market order. I'm rarely using limit orders to shave pennies if I want quick execution. I use them to prevent the unexpected. Under normal market conditions, if the limit is set 10% beyond the expected clearing price, it provides me with free protection against a completely unexpected surprise. Something will have to have gone very wrong with my investment strategies if I'm desperate to buy/sell at any price. In the long-game case, if I purchase a stock at $0.95 that I think can sell for $0.99, I'll immediately place the limit-order for sale as soon as I've made the purchase. No need to hide my hand -- I'll be happy if you want to buy it at that price (and I might get faster execution by being earlier in the order queue).
  - lsiunsuex 7y ago
    so again you want me to risk > $1000 when I don't know what I'm doing with a real brokerage that I don't know what their benefit is over something like Robinhood because.... ? I'm willing to loose a couple hundred to learn and understand something vs giving someone I don't know thousands and "trusting" their opinion. More so - testing the waters myself may not make me as good as someone who does this for a living - but maybe after a few hundred and a few months, at least I have a better understanding of what a real brokerage tells me to buy than to just blindly say take my money and quadruple it.
    - JumpCrisscross 7y ago
      > what a real brokerage tells me to buy Brokers should never be telling individual investors what individual stocks to buy, at least not anyone with less than ~$500,000 in assets. If a brokerage is giving you buy/sell lines for individual securities, that's a red flag. A good investment platform (or adviser) guides you in portfolio management. In encourages long-term strategic thinking over short-term trading highs. The former builds wealth. The latter lines professional traders' pockets.
    - atombender 7y ago
      Why would you play with real money to learn instead of doing simulated trades? You can set up a paper trading account with Interactive Brokers for free. If simulated trading doesn't feel "real enough" because there are no stakes, then I don't think it's about learning. You can learn the ropes without wasting money.
  - jwagenet 7y ago
    Many people are not actively investing on a daily basis. Trading long and adjusting positions occasionally is not value destroying.
- tedunangst 7y ago
  A free paper trading account seems more useful for that.
- 013a 7y ago
  "Investing" and "Stock Trading" are incompatible in the same sentence, unless combined with a phrase like "does not involve". You can buy and hold, or "Invest", on any platform which, in my opinion, has to meet three minimum requirements: It should offer commission-free trading on a variety of low-cost index funds, it should offer a variety of investment account types (at minimum, taxed accounts, Traditional IRAs, and Roth IRAs), and it should be stable. Robinhood only meets one of these three criteria. There are dozens of other brokerages out there which do meet all of these criteria: TDAmeritrade, Schwab, Vanguard, and Chase are four great ones. Robinhood is on the same level as a betting app for sports; so, fine; use it if that's what you want. But do not even mention the word "Invest" in the same sentence as Robinhood; its grossly irresponsible.
  - paulgb 7y ago
    Sure, I'm defending starting with less than $1,000, not doing so on Robinhood specifically. Your suggestions are good, I use Schwab and Vanguard myself. I wouldn't advocate anyone trying to build wealth to pick individual stocks, but I do think if someone were investing $1,000 to get their feet wet I'd recommend they put a bit in individual stocks. The financial system is complex and I think it's worth stripping away one level of the complexity for educational purposes. (It's typically also a humbling experience.)
- zigzaggy 7y ago
  I agree, this is how I started. It was well worth a couple hundred dollars in losses 2 years ago to learn the fundamentals. I considered it the cost of learning that I've more than recovered. Now I have a much larger account, and I'm trading / investing with a much lower risk profile, because of what I learned on my >$1000 account. I consider that the exact opposite of wasting time.
hoffs 7y ago
No it doesn't. You can have as little as few hundred dollars.
spiderjerusalem 7y ago
They lowered this to 2k a while back though. EDIT: It seems it's completely removed now. https://www.interactivebrokers.com/en/index.php?f=4969 https://www.interactivebrokers.com/en/index.php?f=4969
- deleted 7y ago
  [deleted]

paulgb 7y ago

Investing under $1000, especially with commission-free trades, is a good way to learn the basics mechanics of stock trading.

JumpCrisscross 7y ago
> Investing under $1000, especially with commission-free trades, is a good way to learn the basics mechanics of stock trading Individual investors are at a huge disadvantage when it comes to intraday trading. For everything other than a child's hobby account, intended to teach emotional stability through gains and losses, a <$1,000 stock-trading account is value destroying.
- ISL 7y ago
  That education, for a child or an adult, is primarily what one gains from a <$1k trading account. That, alone, is worth more than $1k. Also, one need not trade a small account intraday. I make small trades, but they are always with a multi-year perspective. Give me limit orders and small commissions, and I am happy. (N.B. I use a different broker/don't have a first-hand perspective on Robinhood.)
  - crystaldev 7y ago
    Unrelated but usually you should place a market order usually, not limit. Limit orders take longer to fill, your idea of limits is probably wrong and will lose money compared to a fair market match, it's not worth taking the risk that your order won't be filled, etc.
    - ISL 7y ago
      If an order isn't filled at a price at which I find reasonable, that is okay with me. A market order will fill at any price. I learned that lesson the day that a market order of mine filled at a price I deemed unreasonable. The key to avoiding faffing around with limit orders not filling when you want immediate execution is to place a reasonable limit that accounts for the day's volatility. At other times, I'll place a limit order and let it stand for weeks. When it fills, the counterparty and I are both happy.
      - crystaldev 7y ago
        Different strokes I guess. Getting into/out of the position is my top priority and I see more downside in failing to fill the order than in failing to shave a penny or two.
        ISL 7y ago
        Totally agreed on different strokes. If speed matters most, there's nothing like a market order. I'm rarely using limit orders to shave pennies if I want quick execution. I use them to prevent the unexpected. Under normal market conditions, if the limit is set 10% beyond the expected clearing price, it provides me with free protection against a completely unexpected surprise. Something will have to have gone very wrong with my investment strategies if I'm desperate to buy/sell at any price. In the long-game case, if I purchase a stock at $0.95 that I think can sell for $0.99, I'll immediately place the limit-order for sale as soon as I've made the purchase. No need to hide my hand -- I'll be happy if you want to buy it at that price (and I might get faster execution by being earlier in the order queue).
- lsiunsuex 7y ago
  so again you want me to risk > $1000 when I don't know what I'm doing with a real brokerage that I don't know what their benefit is over something like Robinhood because.... ? I'm willing to loose a couple hundred to learn and understand something vs giving someone I don't know thousands and "trusting" their opinion. More so - testing the waters myself may not make me as good as someone who does this for a living - but maybe after a few hundred and a few months, at least I have a better understanding of what a real brokerage tells me to buy than to just blindly say take my money and quadruple it.
  - JumpCrisscross 7y ago
    > what a real brokerage tells me to buy Brokers should never be telling individual investors what individual stocks to buy, at least not anyone with less than ~$500,000 in assets. If a brokerage is giving you buy/sell lines for individual securities, that's a red flag. A good investment platform (or adviser) guides you in portfolio management. In encourages long-term strategic thinking over short-term trading highs. The former builds wealth. The latter lines professional traders' pockets.
  - atombender 7y ago
    Why would you play with real money to learn instead of doing simulated trades? You can set up a paper trading account with Interactive Brokers for free. If simulated trading doesn't feel "real enough" because there are no stakes, then I don't think it's about learning. You can learn the ropes without wasting money.
- jwagenet 7y ago
  Many people are not actively investing on a daily basis. Trading long and adjusting positions occasionally is not value destroying.
tedunangst 7y ago
A free paper trading account seems more useful for that.
013a 7y ago
"Investing" and "Stock Trading" are incompatible in the same sentence, unless combined with a phrase like "does not involve". You can buy and hold, or "Invest", on any platform which, in my opinion, has to meet three minimum requirements: It should offer commission-free trading on a variety of low-cost index funds, it should offer a variety of investment account types (at minimum, taxed accounts, Traditional IRAs, and Roth IRAs), and it should be stable. Robinhood only meets one of these three criteria. There are dozens of other brokerages out there which do meet all of these criteria: TDAmeritrade, Schwab, Vanguard, and Chase are four great ones. Robinhood is on the same level as a betting app for sports; so, fine; use it if that's what you want. But do not even mention the word "Invest" in the same sentence as Robinhood; its grossly irresponsible.
- paulgb 7y ago
  Sure, I'm defending starting with less than $1,000, not doing so on Robinhood specifically. Your suggestions are good, I use Schwab and Vanguard myself. I wouldn't advocate anyone trying to build wealth to pick individual stocks, but I do think if someone were investing $1,000 to get their feet wet I'd recommend they put a bit in individual stocks. The financial system is complex and I think it's worth stripping away one level of the complexity for educational purposes. (It's typically also a humbling experience.)
zigzaggy 7y ago
I agree, this is how I started. It was well worth a couple hundred dollars in losses 2 years ago to learn the fundamentals. I considered it the cost of learning that I've more than recovered. Now I have a much larger account, and I'm trading / investing with a much lower risk profile, because of what I learned on my >$1000 account. I consider that the exact opposite of wasting time.

hoffs 7y ago

No it doesn't. You can have as little as few hundred dollars.

spiderjerusalem 7y ago

They lowered this to 2k a while back though. EDIT: It seems it's completely removed now. https://www.interactivebrokers.com/en/index.php?f=4969 https://www.interactivebrokers.com/en/index.php?f=4969

deleted 7y ago
[deleted]