~John
Otherwise, you must wait for the settlement of your previous trades before you can reinvest this money.
While day trading is neither illegal nor is it unethical, it can be highly risky. Most individual investors do not have the wealth, the time, or the temperament to make money and to sustain the devastating losses that day trading can bring.
Here are some of the facts that every investor should know about day trading:
Be prepared to suffer severe financial losses
Day traders typically suffer severe financial losses in their first months of trading, and many never graduate to profit-making status. Given these outcomes, it's clear: day traders should only risk money they can afford to lose. They should never use money they will need for daily living expenses, retirement, take out a second mortgage, or use their student loan money for day trading.
Day traders do not "invest"
Day traders sit in front of computer screens and look for a stock that is either moving up or down in value. They want to ride the momentum of the stock and get out of the stock before it changes course. They do not know for certain how the stock will move, they are hoping that it will move in one direction, either up or down in value. True day traders do not own any stocks overnight because of the extreme risk that prices will change radically from one day to the next, leading to large losses.
Day trading is an extremely stressful and expensive full-time job
Day traders must watch the market continuously during the day at their computer terminals. It's extremely difficult and demands great concentration to watch dozens of ticker quotes and price fluctuations to spot market trends. Day traders also have high expenses, paying their firms large amounts in commissions, for training, and for computers. Any day trader should know up front how much they need to make to cover expenses and break even.
Day traders depend heavily on borrowing money or buying stocks on margin
Borrowing money to trade in stocks is always a risky business. Day trading strategies demand using the leverage of borrowed money to make profits. This is why many day traders lose all their money and may end up in debt as well. Day traders should understand how margin works, how much time they'll have to meet a margin call, and the potential for getting in over their heads.
Don't believe claims of easy profits
Don't believe advertising claims that promise quick and sure profits from day trading. Before you start trading with a firm, make sure you know how many clients have lost money and how many have made profits. If the firm does not know, or will not tell you, think twice about the risks you take in the face of ignorance.
Watch out for "hot tips" and "expert advice" from newsletters and websites catering to day traders
Some websites have sought to profit from day traders by offering them hot tips and stock picks for a fee. Once again, don't believe any claims that trumpet the easy profits of day trading. Check out these sources thoroughly and ask them if they have been paid to make their recommendations.
Remember that "educational" seminars, classes, and books about day trading may not be objective
Find out whether a seminar speaker, an instructor teaching a class, or an author of a publication about day trading stands to profit if you start day trading.
Check out day trading firms with your state securities regulator
Like all broker-dealers, day trading firms must register with the SEC and the states in which they do business. Confirm registration by calling your state securities regulator and at the same time ask if the firm has a record of problems with regulators or their customers. You can find the telephone number for your state securities regulator in the government section of your phone book or by calling the North American Securities Administrators Association at (202) 737-0900. NASAA also provides this information on its website at www.nasaa.org/QuickLinks/ContactYourRegulator.cfm.
Instead, read the Intelligent Investor and follow Warren Buffett. Get a great job and invest the proceeds wisely.
Best Regards,
Docmase
For margin accounts, if you're marked as a pattern day trader, additional rules kick in. One example is a $25,000 minimum equity requirement, special margin limits, and additional ways you can get a margin call.
I don't know anything about a rule that blocks you from trading for a week, though if you violate some of the rules, you account can become treated as a cash account for 90 days.
Check this website (and the one it links to) for more details: http://www.patterndaytraderrule.com/
sh— can happen faster then you can blink.you need enough money to have a cushion over your $25grand bank,because if you fall below that amount,the broker will change your status to non-day trader.that means you will only have a 2-1 margin for spending,but if you can maintain your day trader status the benefits are great,the broker will give you a 4-1 margin.that means they will front you $75,000 grand on top of your $25grand to spend.think twice before you day trade.i think you have to be a special type of person to do it.apparently i'm not,cause i can't make much.
remember the two biggest problems with investing is FEAR and GREED. so keep your emotions out of it.
good luck
p.s.if you are considered a daytrader,you can trade multiple times, as many times as you want in a one day period. remember the broker charges you a fee for each trade,i.e a buy and a sell of the same stock,that's considered 2 trades. and if you are a swing trader you can only trade 3x a week.
If you can't get there directly try going to slotmarket.blogspot.com and click on the link to Green that's there.
P.S. If you are going to be a day trader, also listen to the interview with " muddy"…take notes.
Because a security was sold that had not yet been paid for, this account will only be allowed to make purchases using settled funds for the next ninety days. Learn more about this restriction.
When reading this, I did not understand how they could restrict me. I never used the money I had for over 90 days. So how come my money was unsettled? Any clarification would be great. Of course I am going to call my broker as well.
Unbeknownst to you, you are being a risky (also unwanted) customer given your trading with "unsettled funds."
Good luck.
e.g.
10% day trader
50% managed fund
40% etc.
80% day trader
5% managed fund
5% government
10% etc.
10 pts. for right answer.
You can visit http://stocksguide.checkouttoday.info for some useful tips and info related to your query. Good luck!
Mon : Buy 3
Tue : Sell 3
Wed: Buy 3
Thu: Sell 3
Fri : Buy 3 , Sell 3
My goal is to NOT be under day trade rules , but be as active as possible .
Thanks
For example if it was a cash account and you spent it all on the 3 buys Mon and used the proceeds of Tue sale to buy on Wed, you may not be able to sell the Wed buy until the following Monday unless you had enough already settled cash to cover the Wed buy. That might put a damper on your Fri day trade depending upon how much settled cash you had then beyond the Wed buy.
Although, if you had enough cash going into the week for both Mon and Wed buys, you may be able to use the proceeds from Tue sale for Fri trades.
So if you want to make a quick trade in less than 3 days, you have to make sure that you have the margin or settled cash to cover that buy before you would want to sell. So besides the amount available to purchase securities (which might not be settled yet), you have to be aware of what is actually settled when, or day trade buying power.
If you're not using "technical analysis" for day trading, what you're doing is not maximizing your trades. You should be scanning for opportunities based on your technical criteria.
Money Management and position sizing are job #1.
Reading at least one book every six weeks is another must.
Two of my favorites (to start) are;
Trading In The Zone, Mark Douglas
Mastering The Trade, John Carter