Can I Start Trading With $100? (6 Practical Tips)

Key Takeaways:

  • $100 is a great way to start trading
  • You don’t risk much if you’re still learning
  • You learn how to set goals and diversify
  • It’s exciting, and you have fun in the process, almost risk-free

First of all, yes, you can definitely start trading and investing with $100. It’s called micro-investing, and it’s a great way to get your feet wet in the stock market. 

When I first started trading more than 7 years ago, I didn’t have much more to begin with. I worked at a gas station and had little cash left after paying rent, bills, food, and so on.

Still, with the help of Reddit, free trading courses, and trading simulators, I made my way up. 

And if you think there’s no way you could earn money trading because you’re not smart enough, don’t have enough cash to invest, or for any other reason, well, you’re dead wrong. 

So, let’s learn how you, too, can start trading and investing with as little as $100. 

1. Research and educate yourself

When you’re just starting out trading, obviously, the biggest hurdle is that you have little knowledge about it. 

That’s why one of your main goals should be to learn about different options, market trends, and company fundamentals. 

Without fully grasping all the basics of trading, you risk losing your money the first day, week, or month and losing steam and motivation.

And by understanding the terminology and the basics, you’ll make informed decisions and minimize risks. 

In fact, I strongly recommend you start your investing and trading journey by spending no money at all. 

With almost every trading platform having a paper trading feature, there’s no reason why you shouldn’t spend a couple of weeks practicing buying and selling securities.

When I started my journey, I was thinking about trading 24/7. I was glued to my phone, checking the news, looking at charts, and trading. 

There weren’t that many apps back then. Today, there’s a much, much better choice. 

But browsing through r/trading, r/stockmarket, r/wallstreetbets, and others, I still see too many beginners lose all their money, even in bull market.

Apps like this can help you save your hard-earned money so you won’t be disappointed and quit on your first try. 

2. Set realistic goals

Look, realistically, $100 isn’t that much, right? You know it, and I know it. It might seem like a lot of money to you at this moment, but you shouldn’t delude yourself into thinking you’re going to get rich overnight. 

First, ask yourself what the goal of this $100 is. Is it to grow it into a larger sum over time, save for a specific expense, or learn more about the stock market, investing, and trading. 

With a clear objective, determine the timeframe within which you want to achieve your goal. This is extremely important! Don’t dismiss the value of having a deadline for your goals. 

By defining the goals in both the amount and timeframe, you create a roadmap for your trading journey. 

This will be your guide to help you stay focused and motivated in the face of market fluctuations and inevitable challenges. 

3. Diversify

Warren Buffett famously said that diversification “makes very little sense for anyone that knows what they’re doing.” 

And I agree with that. When you’re a beginner, you don’t know what you’re doing. That’s why diversification can save you money if one stock or sector underperforms. 

Gains from other investments help you offset losses. 

Plus, as a beginner, it offers a valuable learning experience. By exploring different asset classes and trading and investing strategies, you gain valuable insights into how different markets behave.

You also develop a better understanding of your risk tolerance and investment preferences. 

Think about that for a moment. 

4. Choose low-cost platforms

Choosing a low-cost trading platform is crucial, especially when starting with a modest $100, right?

They typically charge lower commission fees for trades. As you may or may not know, these fees eat into your profits, especially when you have a small initial investment.

So, find a platform (broker) that charges you based on spread instead of commission, as trading small amounts will mean you pay a fee each time you trade.  

Many trading platforms also have higher minimum deposit requirements, so in this case, finding one that accepts deposits of less than $100 is important.  

Security and reliability are also things you shouldn’t overlook, as well as educational resources. 

If a broker doesn’t offer news, articles, tutorials, quizzes, how-tos, virtual trading simulators, etc., forget about it. 

You’ll spend more time figuring out how something works than you’ll spend trading and learning the fundamentals. 

The same goes for the UI or user interface. As a beginner, you need to find a broker that looks appealing instead of offputting. 

Look for platforms with intuitive interfaces and user-friendly features. A streamlined broker makes it easier to research stocks, execute trades, and monitor your portfolio effectively. 

5. Practice patience

Although markets are unpredictable in the short term, they have historically had an upward trend. That’s why you should view investing and even trading as a long-term prospect. 

It’s tempting to react to every market fluctuation, but rash decisions can result in missed opportunities and devastating losses. 

If you don’t take the time to research, analyze, and think about your trades and investments carefully, you’ll be out of the game sooner than you can say, Stonks!

Without time and discipline, there’s no way to build significant wealth, and that’s something we’re all after. 

Personally, learning about stoicism helped me a lot in this regard. It opened my eyes to the fact that this isn’t a sprint, but a marathon. 

6. Have fun!

Having fun while trading doesn’t seem like typical investment advice, right? Still, it’s a vital aspect, especially for beginners. 

When you enjoy what you’re doing, you’re more likely to stay engaged and committed to learning about investing money and using it as leverage. 

For me, the best (and most fun) part of this is exploring the stock market, researching the companies, analyzing trends, and interacting with fellow traders. 

I quickly learned that every trade, whether profitable or unsuccessful, offered valuable lessons. I became self-aware and finally, for the first time ever, discovered my strengths and weaknesses. 

I understood that while it’s important to take this game seriously, it’s just as important to not let the market’s ups and downs consume me. 

Bottom line

Look, every beginning is tough. You’ll be tempted to YOLO the money you need for rent and food on some stock or token you heard about on a random subreddit. 

But if you’re really serious about trading and investing, you’ll keep your emotions in check and go at it the proper way.

Remember, Slow is smooth, and smooth is fast!

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