Day Trader doubt

[Yshrini]

Hi T2W members,
I have a doubt about day trader definition.
Assume, I bought 10 different shares today and sold all share tomorrow. If I am following this pattern. Am I under day trader definition?
-Yshrini

 

[hewhodareswins]

Hi T2W members,
I have a doubt about day trader definition.
Assume, I bought 10 different shares today and sold all share tomorrow. If I am following this pattern. Am I under day trader definition?
-Yshrini

Hi Yshrini, The definition of a Day Trader changes depending on whom you ask. My definition is someone who closes all trades at the end of the day, regardless of whether they are winning or losing, i.e. holds no trades overnight. The aim would be to end the day on a positive of course but not always as day traders will have winning days and losing days.

 

[ffsear]

Hi T2W members,
I have a doubt about day trader definition.
Assume, I bought 10 different shares today and sold all share tomorrow. If I am following this pattern. Am I under day trader definition?
-Yshrini

Does it matter? Trade the way you want to trade. Find what you are good at. Don't worry about fitting into a category.

 

[kalott]

in the land of opportunity :whistling

"Pattern Day Trading
The SEC defines a day trade as any trade that is opened and closed within the same trading day. They define pattern day trading as four or more day trades within five trading days, assuming that the number of day trades is more than 6% of the total trades taken in the five day period."

https://www.thebalance.com/day-trading-restrictions-on-us-stocks-1031352

 

[Aiman]

"A day trader engages in long and short trades in an attempt to profit by capitalizing on the intraday movements of a market’s price action resulting from temporary inefficiencies in the supply and demand of the moment. A day trader often closes out all trades before the market close and does not hold any open positions overnight" ... Basicaly!

 

[tomorton]

Regardless of SEC bureaucratspeak, a day trader closes all trades on the same day they're opened. If you hold overnight you're just a trader

 

[tar]

Hi T2W members,
I have a doubt about day trader definition.
Assume, I bought 10 different shares today and sold all share tomorrow. If I am following this pattern. Am I under day trader definition?
-Yshrini

No , but make sure to not use unsettled funds for your next trade if you working in a cash account .

 

[RISKonFX]

Interactive Brokers (IB) - Perhaps the largest options trading professional platform defines daytrading as opening more than 4 complete round trip transactions within a one week period. By exceeding this they claim to apply different criteria to ones trading account. An interesting assumption for them to make.

 

[RISKonFX]

Regardless of SEC bureaucratspeak, a day trader closes all trades on the same day they're opened. If you hold overnight you're just a trader

This may be true in terms of definition, however what is midnight for me could well be midday for a trader in Australia. In this case you would have to quantify a 'day-trade' as a round trip transaction within a 24 hour period at the time of execution.

In hindsight though, as i'm sure we are thinking, it really doesn't matter and will have no impact on how and what one decides to trade.

 

[tar]

This may be true in terms of definition, however what is midnight for me could well be midday for a trader in Australia. In this case you would have to quantify a 'day-trade' as a round trip transaction within a 24 hour period at the time of execution.

In hindsight though, as i'm sure we are thinking, it really doesn't matter and will have no impact on how and what one decides to trade.

"Holding overnight" is related to exchange closing time not the midnight , we are talking about US shares here .

 

[tar]

Interactive Brokers (IB) - Perhaps the largest options trading professional platform defines daytrading as opening more than 4 complete round trip transactions within a one week period. By exceeding this they claim to apply different criteria to ones trading account. An interesting assumption for them to make.

Its not their assumption its the sec pdt rule , this applies to US stocks and their options : 4 or more daytrades within 5 trading days is not allowed for accounts less than 25k dollars .

 

[RISKonFX]

"Holding overnight" is related to exchange closing time not the midnight , we are talking about US shares here .

That's great to know, although where did the OP state we are talking about US only markets... :clap:

 

[RISKonFX]

Its not their assumption its the sec pdt rule , this applies to US stocks and their options : 4 or more daytrades within 5 trading days is not allowed for accounts less than 25k dollars .

This is of course true and I thank you for the reminder. My point is that it's an interesting level of legislation to hold, myself as an FX daytrader, I find it pointless and the same as any level of trading frequency. No difference to a day trader and a swing trader IMO

 

[tomorton]

This may be true in terms of definition, however what is midnight for me could well be midday for a trader in Australia. In this case you would have to quantify a 'day-trade' as a round trip transaction within a 24 hour period at the time of execution.

In hindsight though, as i'm sure we are thinking, it really doesn't matter and will have no impact on how and what one decides to trade.

Yeah, I was thinking this as I wrote it, especially as forex is a 24hr market. For stock markets daytrades end by the close, for forex, I suppose most would probably count the NY stock market close as the end of the forex "day", after, that volume drops significantly.

But the point about daytrading is to a) avoid overnight costs, and b) avoid opening gaps.

 

[MarkSpark]

I always thought of day traders having their positions open for anything from 1 minute to about 3 days, so I guess it depends on who you ask!