This is a bit of a gray area, because it is entirely possible for some brokers to allow traders to day trade with a small account. The only problem is you’re not going to make very much money by doing so. The likelihood that you will find a stock that doubles in value is highly unlikely, let alone several over the course of a week.

Let’s break this down by telling you how profiting in the market actually goes. Let’s say the market value of Company X is currently $5/share. If you have $500 in your account and use a free commission broker, you could technically purchase 100 shares of Company X.

In essence, every penny the stock goes up, you will make $1. If all goes your way, the value of the stock will rise and you will be able to sell your shares at whatever price you feel is enough to exit the trade. Most traders are looking for a 10% return, or in this case, they would be looking to sell when the stock price hits $5.50. Not unlikely, but $50 is a solid goal off your initial $500.

The trouble with this scenario is that the $50 you are seeking may be out of reach. Let’s say the stock only reaches $5.20. Would you sell or would you wait for $5.50 to cross? Let’s say it crosses $5.20 but then drops to $4.90. Do you cut the loss or hold out hope it bounces and hits $5.50 on the next leg up? And, if you do cut the loss, how much loss are you willing to withstand before calling it a day and hoping to make your money back, and another 10% the following day?

In my form of trading, I prefer to trade the market in front of me. Percentage gains mean nothing. If it’s a solid day, I will be happy making 10-plus percent. If it’s a slow day, take what the market gives you and come back tomorrow to try again. And if I lose money, find solace in the fact that I didn’t lose more than I could withstand.

My recommendation is to trade with an account that holds more than $25,000 at all times. Obviously it is entirely up to you how much of that $25,000 you use to purchase stock — hell, you could still go with the 100 shares of Company X if you so chose — but keep in mind the more shares you buy, the more money you will make. $50 may be a solid day for someone starting out, but for the day trader looking to live off their profits, $50 just isn’t going to cut it.

Another reason I highly recommend the $25,000 account is so that you may avoid the Pattern Day Trader (PDT) Rule, which was implemented by the Financial Industry Regulatory Authority (FINRA) to protect brokers who offer margin to their clients. You could always avoid PDT by trading in a cash account, but be aware that you will need the funds of your trades to settle before you can purchase more stock, and that typically takes two days. In my opinion, it’s almost impossible to make decent enough money trading in a cash account, but other people make it work.

Certain traders don’t recommend trading in margin accounts, because brokers may drop margin calls on anyone who dips below the $25,000 threshold if they are using leverage. A margin call is nothing to be afraid of if you have money you can transfer to your brokerage, but bear in mind your broker may shut you down if you don’t play by the rules.

Personally, I trade in an account that has 2x leverage — that means in a $25,000 account, I’m able to buy up to $50,000 in stock of most securities. That’s not to say I constantly use the leverage, but it’s nice to know it’s there if I see a terrific setup that’s going to pay me $20k in five minutes.