LongTime Paper Trader, Need Daytrade info

[mikestewart395]

I have been a Paper Trader for many years. I jumped on Robin Hood yesterday and did very well. Here is where I am getting confused. My style of trading is Daytrading. No way am I going to be able to buy and hold, it doesn't work for my style and/or system. After 3 trades of course I was locked out from doing another sell that day. A friend who pointed me to RH said you could do 3 trades a day, but in my google search I am reading 3 in a 5 trade day period. As it is 4 am and the market isn't open, I do not know if I am allowed 3 more buy/sells today. Without having the 25k, what exactly are my options. I want to trade everyday, not 3 times a week. The market is in my blood, I thrive on it. At 9:30 opening it's like a horse race to me....AND WE'RE OFF!!!!!! But having to skip days? I have my system I have been using on paper for years, I do not want to start looking into something else.

Another question was if I signed up with someone like Scottrade am I still limited to 3 in a 5 trade day period?

 

[Quantt]

This is a US thing, for example , we don’t have it in Canada, so my advice would be to check your UK brokers and see if you have it in the UK... Another option would be an offshore broker, but there you are risking 100% loss in case of bankruptcy unless it is regulated/ insured in the UK in your case

 

[timsk]

. . . Without having the 25k, what exactly are my options. I want to trade everyday, not 3 times a week. The market is in my blood, I thrive on it. At 9:30 opening it's like a horse race to me....AND WE'RE OFF!!!!!! But having to skip days? I have my system I have been using on paper for years, I do not want to start looking into something else.

Another question was if I signed up with someone like Scottrade am I still limited to 3 in a 5 trade day period?

Hi Mike,
Welcome to T2W.

Presumably, you're wanting to day trade U.S. equities? What you're coming up against is regulation designed to limit the activities of traders who don't have $25k or more in their account. You can read the U.S. Securities & Exchange Commission (SEC) definition here: Pattern Day Trader (PDT). The SEC ruling will apply to all U.S. based brokers. They introduced it to help prevent tragedies occuring like this one: Mark Barton. If you don't have the necessary $25k, then your options are twofold . . .

1. Trade with an offshore broker who doesn't come under the jurisdiction of the U.S. regulators. This is very risky as they won't offer the kinds of protection that you do want - i.e. segregated client accounts and a water tight guarantee that you'll get your money back if they go belly up etc. So tread carefully if you go down this path.
2. The second option is to trade a derivative product such as spread betting or CFDs. The latter is probably your better bet as the spreads are more likely to mirror those of the underlying instrument that you would get if you were buying actual shares using a direct market access broker. If you're based in the U.K. there are any number of CFD providers out there to choose from.

HTH,
Tim.

 

[Traderjohnsblog]

Ypu can trade stock index futures like the DOW in the futures markets without having to comply with the pattern day trading rule. Hope that helps.

 

[mikestewart395]

I'm in the US. Thanks for the replies, I see I have more studying to do. But thank you all for the help.

 

[NVP]

only risk no more than 2% of your capital on any trade or it feels like you might be losing a lot in the real world

N

 

[gerryg]

only risk no more than 2% of your capital on any trade or it feels like you might be losing a lot in the real world

N

Yes two percent from your equity can save you from troubles in trading. Though after reaching 5K in my account I decreased acceptable risk to 1% due to trading on highly volatile instruments. Anyway it should be adjusted depends on market parameters because too rigid R/R rules may adversely affect results too:smart:

 

[Penny Picks]

I have been a Paper Trader for many years. I jumped on Robin Hood yesterday and did very well. Here is where I am getting confused. My style of trading is Daytrading. No way am I going to be able to buy and hold, it doesn't work for my style and/or system. After 3 trades of course I was locked out from doing another sell that day. A friend who pointed me to RH said you could do 3 trades a day, but in my google search I am reading 3 in a 5 trade day period. As it is 4 am and the market isn't open, I do not know if I am allowed 3 more buy/sells today. Without having the 25k, what exactly are my options. I want to trade everyday, not 3 times a week. The market is in my blood, I thrive on it. At 9:30 opening it's like a horse race to me....AND WE'RE OFF!!!!!! But having to skip days? I have my system I have been using on paper for years, I do not want to start looking into something else.

Another question was if I signed up with someone like Scotttrade am I still limited to 3 in a 5 trade day period?

I looked at 'Robin Hood' awhile back. It may be good but IMOP is that it's more of a crap shoot than a way to trade.

I can recommend TD Ameritrade. They have a good trading platform and a very good "FREE" demo account. I used Scott Trade a few years ago and they clipped me for $150 for inactivity; so I can't recommend them.