DayTrading US stocks

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BeM

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Hi all,

I would like to start daytrading in the near future. As far as I have found out, daytrading UK stocks is too costly and not worth it. However daytrading US stocks also needs a minimum capital of at least $25,000 just to open an account? Is it right or there are brokerag companies that accept less, let's say $10,000?
I read the regulators' statement and the $25,000 was necessary only if trading on margin, isn't it right? Does IB require that amount?
One more thing I would like to know is how do the brokers and their customers transfer the money to each other? Is there one single big transfer at the beginning to the broker's account?
I think I can afford to start trading with $10,000 and it seems something quite fascinating and educative to me, however I won't suffer a heartattack if I lose that amount, but I simply don't have any more cash.
Please let me know as much as you can, I would be very grateful.

Thanks a lot,

BeM
 
If you want to day trade US you will need at least $25,000 (all brokers are the same and it does not matter about margin).

IB will let you open an account with $10,000 but you will be restricted to no more than 3 day trades in a 5 day period.

Hope this helps

Darren
 
BeM

Sorry to submit this so late but I have only recently joined and am just cruising through some old posts.

To open a margin account you need $2,000 and you will get $4,000 of buying power (subject to various conditions including the 3 day trades in any 5 day period).

To day trade you need $25,000 and you will get $100,000 buying power (with conditions).

Because of the increased gearing you need a larger capital base to cover a larger hit if it comes!

Farmer
 
With the help of day trading signals, day traders sell all long positions and cover all short positions at the end of a working, trading day. In day trading, you usually finish the day with cash in hand, to avoid holding any risks. One of the benefits of day trading is that since the positions are closed at the end of the trading day, any sudden news of events doesn't affect the opening prices of trading.
 
I might as well add to it then. :)

My question is about how much to transfer from a 5% fixed account to a trading account.

This could be up to 60k but I wonder if that is too much to begin with, and would a more reasonable amount be 25 to 35k.
 
johnlvs2run said:
I might as well add to it then. :)

My question is about how much to transfer from a 5% fixed account to a trading account.

This could be up to 60k but I wonder if that is too much to begin with, and would a more reasonable amount be 25 to 35k.
Click to expand...

Forget about fixed income trading long term in your case better , but anyway start gradually 25 k more than enough , becarefull though ....
 
If you want to daytrade without being restricted by the Pattern daytrading rules then you will need to keep your account above 25k at all times...you will need to have a cushion at first to accommodate losses...30K total is reasonable but expect to loose money without guidance. IB offers paper trading with it's software and you can also start slower using 10k minimum to open an account, but again you would be restricted by the pattern daytrading rules
 
I'm in just about the same boat as BeM was 6 years ago - torn between daytrading UK stocks without the $25000 minimum and with the added bonus that all of my research and backtesting has been done on uk stocks - .. and trading US stocks with cheaper commissions and without the stamp duty.

BeM said in his original post ,

"As far as I have found out, daytrading UK stocks is too costly and not worth it."

Here are my questions then, if a few people could only confirm these few points to me, I'd be well on my way to being ready to go live. Please! I fall asleep every night pondering over precisely these 3 or 4 issues!

- Am I correct in assuming that BeM was indeed referring to higher commissions and to stamp duty? Anything else?
- if so, would you agree that due to these 2 factors alone daytrading UK stocks is indeed "not worth it"? (ie any advantages of uk stocks , whatever they might be, are more than compensated for)?
- since I do not live in the UK, do not have a regular job, and I'm always on the move (a year here, a year there.. Africa.. Asia.. etc), do I still need to paid stamp duty?
- if I don't have to pay stamp duty (i heard somewhere it doesnt apply as I don't live in the UK - please confirm..), do you think that the remaining issue, i.e. higher commissions alone, can be put up with or that I'd still be better off switching to US stocks provided I can come up with the $25000?

Please please I'd really like to hear as many people's opinions as possible on these points; I do think it'd be useful to others too, as I'm surely not the only one in this position.

Thanks!

I wonder what path BeM took in the end..
 
Hey brynno, I didn't hear you list any advantages to UK stocks. If you want to get around the 25,ooo dollar day trading minimum you have a few options. You could trade index futures. An account at a good broker has a minimum of 2,600 dollars and the margin for a day trade is only 500 dollars. No day trading rules, easy and clear. Taxes are supposedly really clear cut too. I don't know I just paper trade them right now.

There are also brokers that pool clients money together to act as one account to get around the day trading rules with equities. I can't remember any names off hand but let me look through some old post and see if I can find one of those.

Are there no discount brokers for the UK market? Does IB charge more for FTSE trades than NYSE?
 
the "advantages" of uk stocks over us are purely personal to me, ie the fact that I've learned all about price and volume movement and formulated my strategy accordingly by studying them.

I don't want to trade index futures as I feel careful stockpicking can make it possible to play only very high-probability trades and hence minimise risk.. and in the last few months, even being strict I've still managed to pick at least 3 or 4 of those potential trades per day which is enough for me

i think IB is indeed the cheapest discount broker for the uk market, but yes it does nevertheless appear to charge more for FTSE than NYSE , although, as I think I implied in an earlier post, I don't think this is really significant unless you're making hundreds of small scalps a day
 
Hi, i may well be posting this in the wrong place. I am looking for a paper trading system to trade stocks. I have been trading futures for a while but want to start stocks.

Can anyone give me a good company/platform to day trade stocks with aper money?
 
Minimum is $25k to day trade US stocks. Though if your liquidated balance falls below that, you'll be restricted until your equity rises, or you deposit more money. Beware, it takes about a week for IB to deposit your funds. They hold it for a few days to avoid any risks on their end.

If I had up to $60k, I would probably take about 1/2 to start and then go from there, depending on my level of success. I started with about $28k, and that has given me cushion enough to endure the learning curve associated with day trading.
 
Yes you need 25k us$ to start day trading and gradually increase it coz stock markets are always volatile these days.
 
I know a Fund who will let you Day trade with an account opening size from $5,000. They pool customers money into a fund and you become a trader within that fund.

The good thing is that they make sure you have adequate training before they let you go live.

They also have a risk manager to watch how you are trading and make sure you keep doing things correctly, plus a live online trading room where you can talk to anyone at any time.

Start getting good and the fund will give you company money to trade with and you can start becoming a prop trader.

I've taught some of their Day traders on their trading floor in New York.

PM me for privately for any details.
 
Last edited:
Hi Naz. Presumably they only let you trade your $5000 (or whatever element remains of it any given time) until you've shown your skills and built it into something more substantial? I can't imagine any fund letting tyros loose with client money, even with training.

If they're trading remotely (which as you mention on on-line trading room, I presume they are), how do they get the training? Is that also on-line or is that handled on site?
 
I think training is remote as you say unless someone can visit their office. Of course anyone will only be able to trade their own money first of all.

My point is that it is possible to Pattern Day trade under $25K.
 
Well, that will appeal to many Naz as I'm sure you're aware.

Whether they should be PDT with $5K is an altogether different story.

But at least with a solid training system and someone limiting and watching their risk and mony management, they'll stand a better chance than many.
 
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