This article answers questions that often arise when you want to trade , namely “What is the right or minimum capital for trading?”
Just like buying stocks, to trade you also have to prepare a minimum capital. How much is that capital?
For stocks, the Indonesia Stock Exchange (IDX) has determined that investors can purchase this instrument at least 1 lot or 100 shares. So, with the lowest estimated share price of IDR 50 per share, we can say the minimum capital is IDR 50 x 100 shares. That means, we need Rp. 5,000 as the minimum capital.
Similarly, when you want to invest in mutual funds. When you find out that the condition for buying a mutual fund is IDR 50,000 from a platform or investment manager, that’s the minimum value.
Actually, the same thing applies to instruments. Unfortunately, we often get it wrong when we apply the concept of the minimum value to .
For example, when opening a account at Octa.id, there is a requirement that you start with 100 United States (US) dollars. However, that nominal is not the minimum capital used when you want to start trading.
It should be noted that this nominal is more suitable if it is analogous to how we open a savings account at a bank. Is there a minimum deposit? If so, does each bank have a different minimum deposit?
If you open a business or business and then you open a bank account, is the capital to open your business or business as big as opening your minimum bank deposit?
That’s the key to understanding it. The minimum opening at a broker—still with Octa.id’s example of 100 US dollars—has nothing to do with the minimum capital for your trading business.
Doc OCTA Illustration of trading activity.
So, the actual capital required for your business or venture is not related to the minimum deposited capital to open a bank account for the business you are going to run.
I hope that by this point, we have both been able to differentiate between your trading capital and your account opening capital.
Let’s continue on the section “In , any capital can run out”. Actually, what does this statement mean?
Don’t assume first. Think about it, have you ever known the principle of pawning?
The principle of pawning is not that difficult to understand, even if one has never done it before.
First, the goods to be pawned will be assessed by the pawnshop. For example, we pawn 100 grams of gold. So, we hand over the gold, then we take the money home.
Then, will you be given 100 percent of the value of 100 grams of gold earlier? Certainly not. If it’s 100 percent, your name is selling gold, not pawning gold. Makes sense, right?