What Is the Pattern Day Trader Rule? (PDT) For Stock Traders:
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Most people that want to learn how to day trade should learn a bit more about the Pattern Day Trading Rule that is a federal regulation for all stock traders. To simplify, anyone with less than $25,000 is not able to place more than 4 positions (enter and exit) within 5 business days on a margin account.
This means that any trader that wants to day trade stocks needs to have $25,000 in order to enter and exit more than 4 positions within 5 business days. Otherwise the account will be limited and you won't be able to continue trading.
The Pattern Day Trading Rule (PDT) is obviously something that we should consider when learning how to day trade. These can be a limitation in not only profits but also on the number of positions that we can trade. Outside of the markets being more leveraged and easier to learn, this is another reason why we have all of our traders trade in the Futures Markets. There is not Pattern Day Trading Rule (PDT) in the futures markets and the minimum amount of capital required in order to trade is only $1,000.
The Pattern Day Trading Rule (PDT) isn't the only thing that one must consider when day trading as well. Stocks are not leveraged which means that for every dollar that the stock rises we only make $1 in profit for every share of stock that we own. With futures the leverage is at $50 to $5,000 per dollar that the position movers. This means that for every $1 dollar that a future position rises we make anywhere between $50 to $5,000 in profit!
Let us know if you have any questions.
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Also learn how we day trading and traveling around the world for the last six years at http://wanderingtrader.com. Our WanderingTrader sister site.
What Is the Pattern Day Trader Rule? (PDT) For Stock Traders
What is the Pattern Day Trade Rule (PDT) for Stock Traders how to trade in roblox | |
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