Trading account size calculator
The account you need depends on two things: what you want trading to pay you and what your setups need to be traded safely. Enter your monthly income goal, a realistic monthly return, your tax rate, your risk per trade and what your smallest normal trade risks, and this calculator works out the capital each goal requires. It also flags the $25,000 minimum for frequent day trading in US margin accounts.
What each goal requires
The capital each requirement needs, next to what you have. The biggest bar sets the account size.
Account needed at different returns
Capital needed for your after-tax income goal at a range of average monthly returns. Most traders who last are in the top half of this table.
| Monthly return | Yearly, compounded | Account needed | Monthly pre-tax profit |
|---|
How the account size is worked out
Three separate requirements are checked, and the biggest one sets the account you need.
For your income
Gross up the goal for tax, then divide by your monthly return.
account = goal ÷ (1 − tax) ÷ monthly return
For safe trading
Your smallest normal trade must fit within your risk per trade.
account = smallest trade risk ÷ risk %
For day trading
US margin accounts that day trade often must hold at least $25,000.
account ≥ $25,000
What you have pays
Your current capital at your return, after tax.
income = capital × return × (1 − tax)
Time to grow
Months of compounding, with nothing withdrawn, to reach the account size.
years = ln(needed ÷ capital) ÷ ln(1 + return) ÷ 12
Account size questions
How much money do I need to start trading?
Enough that your normal trade fits within a small percentage of the account. If your smallest sensible trade risks $50 and you want to risk 1 percent per trade, you need $5,000. Less than that, and you either risk too much per trade or cannot take your setups at all.
How big an account do I need to make $1,000 a month?
Divide the income you want by a realistic monthly return. At 2 percent a month after costs, $1,000 needs a $50,000 account, before tax. Many consistently profitable traders make less than 2 percent a month on average, which is why living off a small account is so hard.
What monthly return is realistic?
Far less than social media suggests. Returning 20 to 30 percent in a year is excellent for most professionals, which is roughly 1.5 to 2.5 percent a month. Plan with a cautious number and treat anything above it as a bonus.
Why does the $25,000 rule matter?
In the US, margin accounts that make four or more day trades within five business days are treated as pattern day trader accounts and must keep at least $25,000 in equity. Below that, frequent day trading is restricted. Our PDT rule calculator explains the details.
Should I withdraw profits or let them compound?
Withdrawing everything keeps the account the same size, so income never grows. Leaving part of each month's profit in the account lets it compound. The calculator assumes you withdraw the income goal and shows what it takes to do that without shrinking the account.
What about prop firm accounts?
Funded accounts let you trade a larger balance for an evaluation fee, in exchange for strict drawdown rules and a profit split. Our prop firm calculators compare the costs and odds with funding your own account.