Day Trading

Day trading is definitely a great way to make huge profits but many people don't know the SEC rules on day trading. The SEC requires that you have a minium of $25,000 in your market account in order to day trade. I would recommend getting a scottrade account set up and using that as your broker to place orders. You can setup a joint account with another account holder and use the combined account balance to create your $25,000 minium balance. I personally bought 2 $10,000 CD's at a 6 month term to have a safe place for $20,000 and the other $5,000 was used for day trading. I've made lots and lost lots doing this so do your research when taking such risk. I've also made large profits in real estate but location and timing play a large part in that. Real estate is more of a long range investment tool and can eat you up if you don't run the numbers right! You have to keep in mind that you're paying interest on your loan, taxes always go up, home owners insurance, and the rent money isn't always on time. A great place to invest internationally is cancun! Great rentals and its always a hot spot!

The limit is 5 day trades per week, not 5 trades per week.

Although it may not be obvious, day-trading creates certain risks for brokerages and exchanges as well as the individuals doing the trading.

The higher account requiremens reduce the risks for brokerages and exchanges. For more information see

http://www.nasd.com/web/groups/rules_regs/documents/notice_to_members/nasdw_003881.pdf

Not only do they apply to etfs, they also apply to etf options.

You have to test different SMA/EMA strategies to see which one works best for you. Generally speaking, short term trading uses short term averages. Long term or position trade with longer averages (50 day SMA or greater).

If you're talking only a few a days, then use short term EMA. EMA is more sensitive to price changes.

I'm not sure if you can get "marked" in an IRA account. Because it's a "cash" account, not margin, it would be harder to do enough day trading to meet the requirements. In my IRA account, it seems that if I do a day trade (or even an overnight trade), I'm not able to reinvest the cash from the sale until the day that the purchase settles (i.e. the third business day after the purchase).

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/

Buying or selling any number of shares in a single transaction is a single trade.

There is really no such thing as a trading account. Maybe you are referring to a margin account?

If so, you can purchase up to the full cash balance in the account and sell the entire position(s) same day as long as you did not exceed the cash balance in your account.

You can do this every day without a margin account if you wanted to.

The trades will settle 3 business days one after the other. You don't have to wait until settlement to have funds to buy or sell again.

While your example does not meet the definition of "pattern day trader" you may run into a "free ride" problem depending upon how much settled cash or margin you have when the trades were made.

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.

Go try Forex, it's the biggest market in the world traded by about all countries. Search google for more information. It's also unknown to most because it started in the 1970s and gained public on 1990 or something like that. Most brokerages has demo accounts where you can actually practice. Anyway….follow these rules and you should be fine.

1. Have descent trading system…Simpler the better.
2. Risk 1-3% of your account for each trade..

3. Money management.
4. Money management.
5. Money management
6. Money management.
7. Money management.
8. Money management.
9. Money management.
10. Money management.

The reason people fail because they don't follow these simple rules and are toooo greedy. Like myself but I'll be sure to come back and follow.

There are clearly no legal issues for you. You can do whatever you'd like with your money. However, there may be some legal issues for him. "He takes a 25% commission" sounds like he takes 25% of the profits. In order for him to take an incentive fee like that, he would probably need to have a hedge fund structure. That is, he would have an investment vehicle that allows him to take your money.

If that's true, he would need to make sure that you are an accredited investor. That is, satisfying the following:

"a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase;

a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or

a trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes."

If you don't satisfy that he would need to jump through some real hoops to be able to collect that incentive fee and not run afoul of the rules. Given these issues, I recommend that you spend some time talking to him as well as talking to an investment pro before you invest.

Good luck.

There is enough risk inherent in forex trading without having to worry whether your broker is going to rip you off. The first step to take when choosing a broker is to check whether they are regulated. In the US this should be with both the NFA and CFTC. In the UK the FSA. Second is whether your money is protected. Fortunately, the regulations concerning this have recently changed. As from 21st December 2007 the NFA (National Futures Association) requirements concerning minimum capital came into effect and already four brokers have failed to meet the new criteria.

Briefly the new rules stipulate that brokers must have a minimum capitalization of $5m plus a percentage to cover client funds.

If your broker meets these two requirements the next question is whether your broker is an ECN or FCM dealing broker – ie will his dealing desk be playing against you? This will matter if you want to include scalping as part of your trading strategy.

This is just the beginning of your quest to find a broker which best suits you and the resource list below should help you find the answers you will need.

Good luck.