What is The Pattern Day Trader (PDT) Rule in Stock Market Trading?

Published on July 14, 2020

What Is Day Trading Rules, What is The Pattern Day Trader (PDT) Rule in Stock Market Trading? – Forex Day Trading For Beginners.

Everything you need to know about the PDT rule. Subscribe: https://goo.gl/poGZTm to get INSTANT alerts when I post a new video outlining my penny stock trading techniques

0:05 Tim Sykes, millionaire mentor and trader here explaining what is such a touchy topic, the Pattern Day Trader rule, otherwise known as the PDT rule.

0:15 If you have a US account, and you have under $25,000, you can only make three-day trades per week, per five rolling day period. A day trade is in and out of a stock the same day. You can have unlimited trades overnight. You can hold the stock long or short, overnight, every single night, like it buy it one day, sell it the next. There are no limits on that.

0:40 This is just a rule designed by the SEC to protect newbies and beginners and people with small accounts, frankly, from themselves. I used to dislike the PDT rule. I was like, screw this! I want to be able to trade as much as I can.

1:05 I respect the PDT rule because I think it’s essential for newbies to trade less. This is why brokers don’t necessarily love me, but it’s the truth. This is how I create millionaires from scratch, by teaching you patience.

1:20 You do not need to make more than three-day trades per week. Again, you can hold the stock overnight, so you can make three-day trades per week and then also hold the stock overnight. So you make four trades or five trades or seven trades a week.

2:20 I think too many newbies get too excited to trade a lot, and they want to learn. They want to tinker and trade. I would encourage you to use stockstotrade.com software.

2:30 They have paper money where you’re not risking any money, and you’re trading like a fantasy account. That way, you can test with no risk. You don’t have to breach any PDT rule. You don’t have to over-trade yourself into oblivion and have a lot of commissions or, again, if you use a commission-free broker, trade yourself into frustration because you’re just over-trading.

3:30 A lot of you guys have to pay attention and listen to the things that I had to learn the hard way. I never had a teacher. So I wish I had someone telling me this stuff when I was first beginning. The PDT rule is not something to be scared of. It’s not something to be upset about. It’s not something to be avoided. I know there are brokers out there, they’re like, “Oh, escape the PDT rule.” I wouldn’t use any of them.

4:00 I think the PDT rule is reasonable. It keeps you in check. And it forces you, primarily to get above $25,000. You know, I go back to $12,000 every year in one of my Etrade accounts to try to grow it. And usually every year I double it or triple it or quadruple it, in front of my students, to show how you can do it. And it forces you to be much more meticulous. It forces you to trade like a pro.

4:20 I highly encourage you to start to love the PDT rule. Do not try to avoid it. Do not use leverage. Do not try to put in more than $25,000 in your account at first. I would encourage you to start small.

4:45 The lessons that you learn growing your account when it’s small, I know it’s not a lot of money, but you’re not going to make a lot of money in your first few weeks or months anyway. So get that out of your head. It’s much more important to develop a proper trading process and be disciplined in the beginning.

5:00 I think the PDT rule is reasonable. Don’t get upset about it. This has been another video of Tim’s Tips.

Thank you for watching my videos. I hope that they help you. I want to share everything that I’ve learned over the years. You can check out more videos right over there. And also click Subscribe so that you can watch all of these videos, get that knowledge, and become my next millionaire student.

* Results may not be typical and may vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here: https://www.timothysykes.com/terms-of-service/

What is The Pattern Day Trader (PDT) Rule in Stock Market Trading?, What Is Day Trading Rules

Forex Day Trading For Beginners What is The Pattern Day Trader (PDT) Rule in Stock Market Trading?.

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Basics of a Day Trader

There is no special credentials needed to become a day trader. Instead day investors are classified based on the frequency of their trading. FINRA and also NYSE classify day investors based on whether he or she trades 4 or more times during a five-day period, supplied the variety of day professions is greater than 6% of the consumer’s overall trading task during that duration or the brokerage/investment firm where he or she has opened an account considers him a day trader. Day investors go through capital and also margin upkeep needs.

A day trader typically closes all professions prior to the end of the trading day, so as not to hold open positions over night. A day investors’ performance may be limited by the bid-ask spread, trading compensations, in addition to expenditures for real-time news feeds and also analytics software application. Effective day trading calls for substantial understanding and also experience. Day investors utilize a variety of approaches to make trading decisions. Some investors utilize computer trading designs that make use of technical evaluation to calculate favorable chances, while some profession on their impulse.

A day trader is largely worried about rate activity characteristics of a stock. This differs from capitalists that make use of essential data to examine the lasting growth potential of a firm to decide whether to get, sell or hold its stock.

Rate volatility and also average day variety are important to a day trader. A safety and security has to have enough rate movement for a day trader to achieve an earnings. Volume and also liquidity are additionally vital since getting in and also leaving professions quickly are vital to capturing little revenues per profession.

Securities with a little everyday variety or light everyday quantity would certainly not be of passion to a day trader.

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