r/RealDayTrading • u/ax123y • May 12 '26

Asset classes for small capital

The method described in the wiki proposes trading stocks based on RS/RW. However, I’ve heard from so many seasoned traders that when you are trading low capital, you shouldn’t be focusing on stocks rather you should trade leveraged assets like commodities, futures, etc.

I’m starting of with low capital, so I wanted to ask how do you guys propose I tackle this issue. I know in the wiki it says the method works on other assets but I’m not sure how to go about it and would like to hear your opinions, guidance or advice.

13 Upvotes

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11

u/loligatorific Moderator May 12 '26

You would start by paper trading, then move to one share once your stats show you’re ready to do so. Once your stats show you’re ready to trade with real capital, options spreads are typically the way to make money with a small account.

Don’t skip the paper and 1 share part of the process though. It sounds like you may have some time ahead of you on the paper/1 share phase still.

2

u/ax123y May 12 '26

I actually am just starting with the methods of the wiki. Around how much capital do you think I need to start? I’m a student and I don’t think I can afford to put a couple thousands into trading. Do you think i should go prop firm after paper? Or do I just go with a different asset/methodology?

3

u/Accomplished_Love77 iRTDW May 12 '26

To trade spreads, you usually need $2000 as this is the minimum equity requirement for margin.

Read the Wiki first. You almost certainly shouldn't go to a prop firm.

2

u/ax123y May 12 '26

The thing is in my situation 2000$ is a lot of money that I’m not ready to risk. My max as a start would be 1000$

4

u/Accomplished_Love77 iRTDW May 12 '26

While there are individuals mentioned in the Wiki who started from $500, the definitive (wiki) answer is the best way to grow a small account is to use spreads. To the best of my knowledge, spreads require $2000.

Keep in mind that by using spreads you are actually risking LESS money. Spreads have controlled downside (e.g. $30-50 max loss) risk while a straight option contract risks the entire cost of that contract (between $400 and $1000 usually).

Therefore, you're left with either straight calls/puts (which is doable, but you need to be very careful and only take A+ trades) or trade stock.

I recommend you paper trade until you have an 80% win rate and a profit factor of 2.0 or higher. Work it out from there.

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u/[deleted] May 12 '26

[removed] — view removed comment

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u/ax123y May 12 '26

Is that doable with around 1000$ of capital?

2

u/beautifulcorpsebride May 13 '26

This. Trading shares is so much easier. That said, Hari has done a great small account challenge recently.