Please aslo explain to me the meaning of "day trades"
So if you bought and sold 100 MSFT 4 times in 2 days, let's say (and if these 4 trades were more than 6% of your total trades during these 2 days–which is very likely), you'd get labeled a "pattern day trader."
Day trading is buying and selling the same security within the same trading day (though if you don't already know that, you shouldn't be answering this question).
Suppose I process a series of buys on a particular security in the morning. Then sell them all in the afternoon.
Buy – Buy – Buy – Sell
Does this count as one day trade or three? What if either the Buy or Sell orders were partial fills?
Thanks
Thank you very much StopSpending.
What if the buys were separate orders, but you execute a single sell for the total lot?
From Rule 2520:
"The term "day[-]trading" means the purchasing and selling or the selling and purchasing of the same security on the same day in a margin account"
"The term "pattern day trader" means any customer who executes four or more day trades within five business days. However, if the number of day trades is 6% or less of total trades for the five business day period, the customer will not be considered a pattern day trader"
It's pretty clear to me that to "execute" a trade. I place an order and get fills. The order and the fills are a "trade". Now, if your two "buys" are based upon two separate orders, then the pattern you ask about would be two day trades.
Further info:
Interactiveborkers gives clear examples of day trades on their website. Another reason why I like that firm so much. Looks like your two buys and one sell example is just one day trade.
If you do buy on margin (or borrowed money) there are only two ways to change it. Deposit more cash to cover the purchase. Or sell securities which will increase your cash position.
The above is for the US.
Does anyone else keeping finding themselves on the wrong side of the market all the time?
Can anyone give me some constructive (not give up) and practical advise on this to help get my confidence back?
Thanks
made a good profit can go into the floor broker‘s or
desk trader‘s pocket. This is possible as he can leave
buyer/seller‘s name in blank and only fill it in when
reported or taken from the runner (the boy that picks up
the slips from the floor). In some markets this is not
possible since the whole deal (except the shouting) is
immediately recorded. But when trading is wild, a fast
light is put on, which allows 15 minutes to conclusion
instead of only five. I could give you many examples
but this is sufficient to convince you to change both
your trading house and/or floor broker or, better still
both. Find a floor broker that you know and trust, this
is the only solution. It is almost impossible to always
be the loser, so think twice and change your servers.
CAPITAL ON A MARGIN ACCOUNT. ANY GOOD ADVISE
ABOUT WHAT SHOULD I KNOW.
Here are four rules you must have, if you don't you will loose money
1 – A written sound trading/investment plan with rules that will not only help you but more importantly protect you, mostly from yourself.
2 – Sufficient trading/investment capital. Use your own money, there’s no need to go into debt so that you trade/invest.
3 – A written money management program in place. Remember never invest 100% of your capital into any one security and never have 100% of your capital invested.
4 – A full and complete understanding of the rules & regulations of the industry.
Here are some of the rules that I follow, in additiona to the four cardinal rules above.
Never buy or sell based on anyone's, including your own, market predictions.
Stick with up-trending stocks.
Never buy stocks in danger of filing for or actually in bankruptcy.
Never average down.
Always sell when management cuts sales or earnings forecasts.
Only buy stocks with real sales and real earnings.
Always diversify between industries.
Don't buy stocks just because they've gone up.
Never sell a stock because an analyst proclaims it is overvalued.
Always look for companies with new ideas, new styles or new products.
Orders after an execution – a “stop loss”
No security is to be purchased at a price that is below the 50-day moving average price.
Good luck, based on your question, you're going to need it
My take is that someone is deliberately swapping shares, huge chunks at a time, at ridiculously low prices to keep the stock price down? Why go to the expense?
The market is at a price consensus or is in a consolidation phase. The bulls and bears are in consensus; no one is more powerful than the other.
You will also find that penny stocks are usually less volatile than bigger value stocks.
>>My take is that someone is deliberately swapping shares, huge chunks at a time, at ridiculously low prices to keep the stock price down? Why go to the expense?
No I doubt anyone would be doing that deliberately. There is no point to such exercise – waste of time and money.
Maybe people who bought earlier at a cheaper price are taking profits and people who are hearing the news are buying in.
Good Luck!
And it is a Fed rule that when you buy a security it must be paid in full prior to its sale, if you sell with out making payment in full your account is restricted for 90 days or until payment is received and you can not use the proceeds of the sale to cover the purchase amount due.
The $25,000 item that every one talks about is that if you day trade the same stock 4 times in 5 five days you will be considered a pattern trader AND you must
1-open a margin account
2-maintain equity of $25,000 at all times, The 25,000 is NOT a balance but equity and you must have that much in your account at all times.