Day Trading

You are not a pattern trader nor are you a day trader

A day trader buys and sell the same security on the same day. Day traders like to be flat when the market closes and not carry over positions.

A pattern trader is one that day trades (buys then sells or sells short then buys the same security on the same day) four or more times in five business days, provided the number of day trades are more than six percent of the customer’s total trading activity for that same five-day period.

It is not Ameritrade that decides who is or who isn’t a pattern trader, it is the SEC. So you can relax, you’re not a pattern trader, so don’t worry about it until you’re start going in and out on the same day in the same security

Now you can go out and enjoy yourself – happy trading, go get em

Whatever disocunt brokerage firm you go with absolutely make sure to demand a money market fund for your cash account. ETrade and TD Ameritrade recently changed their policy and now pay less than 1% on cash…the income they earn by paying their customers less than 1% on cash and simply turning around and depositing "your" money into a money market account earns them huge profits (for ETrade it accounted for nearly 1/2 of their net income for the recent quarter)..Great way to treat their customers don't you think….I can't believe so many investors let them get away with this practice…I can't stress enough that all discount brokerage customers need to look into what their firm is paying on cash and either demand a money market fund return (4.5-5%) or take your business to a place like Wells Fargo Investments that offers money market funds for idle cash and up to 100 free trades per account/year if you have over $25k between deposit, loans, and brokerage (including IRAs).

The most important thing to look at is risk versus reward. It takes a lot of skill to be successful at day trading, and a lot of cash. According to SEC regulations, you must maintain an account balance (minimum equity level) of at least $25,000. However, you will only be classified as a day trader if you buy and sell (or sell short and buy to cover) the same security within one day, and do this four or more times over five days or less. This means that you can make a day trade (or two or three) and not have to worry about your account being frozen, but make a habit of it and you will see your account suspended for up to 90 days.
Besides account requirements, there's also taking into consideration commissions versus trade value. To buy and sell stock can cost anywhere from $10-$40 overall, so you should be expecting profit exceeding this before entering a trade, which means trade size is a key component. Average daily volume of a stock wil lgive you an idea of what you can expect to be able to buy or sell.
Utilizing different technical indicators such as stochastics, RSI, MACD, moving averages, and price change patterns could give insight into possible future price changes, but these are all speculative and should be used with caution. I would caution anyone who is a beginner trader/investor about day trading. For short term gains, it's better, and less risky, to find stocks about to increase over the next few days/weeks/months. You'll more than likely realize more gains at less of a risk. It's up to you to learn how to do this correctly, but it can be a much more reliable method of trading rather than day trading. Good luck!

To avoid being labeled as a pattern day trader: three or less day trades within five consecutive business days. A day trade means the buy/sell occurred the same day.

In a cash account when you sell it will take three business days for that trade to settle. You can use those proceeds to buy another stock. But you can not sell that new purchase until the first sell has settled.

With a margin account you don't have to worry about the settlement rule. BUT if you have a small account and you are trading frequently, you do need to worry about overdoing it and getting a margin call. That is probably not a surprise you would want.

My recommendation: limit your trades to one or two per week. Spend most of your time researching so they are profitable trades.

While you don't need to have a margin account to day trade, you will be required to have 100% of the purchase price on hand if you are trading simply in a cash account.

Investing is something one does for the long term.
Day trading is buying/selling securities so as to take advantage of short term (minutes/hours/seconds) price differentials and not holding anything longer than a day hence, day trading.

Investing or day trading can be done through an eBroker (electronic brokerage or online broker) Some may be more adept at handling day trades than others,

Investing and day trading both require a knowledge of the underlying market and its dynamics.

Those three references should only be the beginning of a long term commitment to learning.

If you are going to do day-trading, you will need more resources than a free broker will provide. Things like streaming quotes are essential. Zecco will provide them for an additional fee. But why not go to a broker that includes everything you need up front?

Also, be aware that if you make 4 or more day trades within any 5 consecutive business days you will be labeled a pattern day trader. At that point you must maintain a margin account with a minimum balance of $25,000.00.

Pattern daytrade applies to all accounts. If you have under $25k in your account you are prohibited from doing more than 3 daytrades per 5 day trading rolling period. If you make 4 daytrades in this period you will be red flagged as a patern daytrader and must bring your account to $25k within 5 days. If you don't then you will be restricted from opening new positions for 90 days or until your account meets $25k minimum balance whichever comes first.

It applies to all accounts even if you have more than $25k.
If your labeled a patern daytrader and lets say you don't make any daytrades for 2 months and your account falls below $25k. You will still be restricted from opening new positions until you bring it back to $25k. In other words to clear yourself of a patern daytrader designation you must not make any daytrades what so ever for 90 straight days.

Zecco.com will let you trade for free–I'm not sure about 10 trades a day but enough to keep you busy.

Interactive Brokers has been around a lot longer and will let you make any number of small trades for $1 each.

There is an old adage that you shouldn't confuse genius with a bull market. Have you traded successfully through a downturn and learned when to go short or flat? If you have, and you don't choke with real money on the line, you are a rare breed.

If you have $5,000 you've got to limit your number of positions. If your goal is $50 per trade, you'd need 1% return on your whole $5,000 stake on every trade. That's pretty ambitious for true daytrading, and if you have a drawdown to $2,500, you have an impossible 2% goal.

Another issue is that if you make a few day trades in a small account, the broker will cut you off because the SEC requires a larger minimum balance for "pattern day-traders". The balance doesn't have to be cash, it can be other stocks that you aren't trading much.

Try through ADR GDR

or on rbi site

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