ETF minimums?

[Kjay]

Is there a minimum amount that should be considered before delving into ETF trading? $2000, $5000?

 

[tsptalk]

As long as your commissions are low, you can probably go as low as $1000, but with $7 to $10 per trade (times two for an in and out trade) it can eat up your account. A $2000 account will allow you to use margin in a personal (non IRA) account.

 

[Intrepid_Timer]

My personal belief is that 1% gain in a 3X ETF should AT A MINIMUM double the cost of the transaction. Let's say you are paying $10 to buy an ETF and another $10 to sell it. That's $20 so I would want to invest at least $4000 so that a 1% gain gives me $40. Again, just a personal opinion.

 

[JTH]

My personal belief is that 1% gain in a 3X ETF should AT A MINIMUM double the cost of the transaction. Let's say you are paying $10 to buy an ETF and another $10 to sell it. That's $20 so I would want to invest at least $4000 so that a 1% gain gives me $40. Again, just a personal opinion.

Great analysis, when you have a small 5K account like I do, it is very difficult to overcome the cost basis across multiple positions. It's not enough for me to be right, I have to be really right and look extra hard for the right risk/reward trades. In smaller 1K positions you enter the trade and you're already down 2% I make these trades to build up experience, but the reality is it's really just stupid.

IMHO if you have less than 10K you should be an investor, not a trader