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.
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.
10/3: Bought GTEC, Sold GTEC
10/4: Bought LIPD, Sold LIPD
10/5: Buy 2 FXI, Sell 16 FXI
If I complete the trade listed above on Oct. 5, will I be flagged a PDT?
finance.yahoo.com is the website that i use the most during the day, i am a daytrader also.
If you need more advice just feel free to contact me.
I hope that you will chose my answer as the best one.
Thanks
Does anybody have any good experience with this software?
Your response will be much appreciated!
Thank you!
First, you're using Vantage Point to day trade, but they will tell you that Vantage Point is for position trading. Yes, they're predicted high/low is very accurate (granted, major moves can be outside the range, but how often do you have a huge 1 day move?), but it only tells you the possible high/low, now what the trading pattern for the day will be.
One thing I could suggest is this: Use the Short Term/Medium Term Predictive averages (the pink and light blue lines, I have mine set on the bottom part of the chart) to get an idea of when prices could be changing direction. Also, when you switch from the 10 day or 5 day average to the predicted high/low, you'll notice that the short/medium predictive lines will be different that from the 10/5 day chart. What I do is when the short predictive (light blue) line crosses the medium (pink) line on both the 5/10 day and predicted high/low chart, is when I get an indication markets will turn (and it's very accurate).
When that happens, since you day trade, use your technicals on whatever time frame chart you're using to take trade only in the direction of the crossover. For example, say you're watching the S&P 500, the market is trending up and you notice that on the 5 or 10 day chart that the short term predictive has crossed below the medium term, and when you switch to the predicted high/low chart that the short has not crossed below the medium predictive, but is about to, wait till the short crosses below the medium predictive on the predicted high/low chart (that is short has crossed below medium on both 5/10 and predicted high/low chart). When that happens, use your technicals to time short entries, don't go long. In other words, say you're using a 5 minute chart. If the market is trending up, and you're technicals give you a signal for a short, then take the short trade.
When the signals show the 5 minute chart starting to turn back up again, close your short, but do not go long, only enter again when you get a sell signal.
Trade in the direction of the larger trend. You should get less whipsaws and will be trading in the direction of the larger trend. When the short crosses above the medium predictive on both the 5/10 and predicted high/low chart, the only take long trades.
Hope that helps.
A pattern traders 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.
So you will not be nor can be considered a pattern trader based on the dollar amount in your account.