Daytrading

[BaboonGuy]

please don't reply if you're gonna flame...

I just heard that there is an SEC rule that makes it so you can only make 3 buy and sell orders in the same day (on the same stock of course) per week. If you go over they shut down your account for 3 months or something. Anybody know anything about this?

 

[richardycc]

even with $25k in the account? where is the link?

 

[Mani]

Need a link ...first I've heard of this.

 

[Vic]

Sounds like BS to me...

 

[PushHands]

Sounds like "Pattern Daytrader" rule. A little fuzzy on the specifics here but it doesn't apply if you're trading w/ $20k or $25k in your account. Do a search on google and you'll find the details.

 

[BaboonGuy]

i found this about pattern daytrading:

http://www.traders.com/Documentation/FEEDbk_docs/Archive/072002/Abstracts_new/Carlson/carlson.html

but i'm still confused about all of this

 

[PushHands]

Quote from the link you just gave:

"your brokers described the definition of a pattern daytrader as someone who made four day trades in five days. "

My guesstimate is just don't make four or more day trades in five days and you should be ok. That or move to futures, which doesn't have these limitations but can carry more risk.

One of the greatest factors of failing new traders is insufficient capital. That said, I still believe the rule is a dumb one

 

[BaboonGuy]

hmm anybody know anything else about this?