Coughing up the $25k requirement for Pattern Day Trading
- Thread starter AeroKen83
- Start date
When daytraders were making fortunes in 1999 there was a lot of resent amongst people that don't like people to make money for "nothin' ". The PDT rule might have been grandstanding to keep the complainers happy.
Lots of people lose their life savings in Casinos but I don't see any minimum funding requirements for that activity
Lots of people lose their life savings in Casinos but I don't see any minimum funding requirements for that activity
A casino does not have the risk if you put $1,000 on Roulette or Blackjack since as soon as you lose your last dolloar you are out. They already got your cash when you bought your chips.
Sell a stock short or go long and have it halt or gap on sudden news will eat up your $1,000 and the broker's capital. WHy should a broker put his money on the line if you only got $1,000....
Sell a stock short or go long and have it halt or gap on sudden news will eat up your $1,000 and the broker's capital. WHy should a broker put his money on the line if you only got $1,000....
Quote from maxpi:
When daytraders were making fortunes in 1999 there was a lot of resent amongst people that don't like people to make money for "nothin' ". The PDT rule might have been grandstanding to keep the complainers happy.
Lots of people lose their life savings in Casinos but I don't see any minimum funding requirements for that activity
this is not necessarily true as there are a lot of inexperienced people with more than 25thousand dollars.
I know of several situations where people have lost 50 plus having no knowledge or the discernment of the knowledge in options and lost all within months. They allowed their emotions to dictate the trade, doubled down with no risk management in place etc. My friends tried to help this one individual to no avail as his friend keep chasing his loss.
the rule does not keep out individuals with no experience but only those who have less than 25thousand dollars.
I am guessing they? believe if you were able to save 25thousand dollars prehaps you will be cautious in loosing it in doing some dd.
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wether or not the rule is right or wrong...it would be a good practice in discipline to take your account to $25k+ without day trading.
I at one time was in the same situation...I was around $15k...didnt want to go to other instruments, so i found a different strategy.
As it turns out, I make much more $$ swing trading than i ever did day trading.
this year so far (3.5 months) i am up over 12%...so on track for around 40% this year. not way out there but respectable. all swing trading
day trading magnifies emotions and costs. if you are good, it is a good place to end up. if you dont have the $$, it is NOT a good place to start out.
I at one time was in the same situation...I was around $15k...didnt want to go to other instruments, so i found a different strategy.
As it turns out, I make much more $$ swing trading than i ever did day trading.
this year so far (3.5 months) i am up over 12%...so on track for around 40% this year. not way out there but respectable. all swing trading
day trading magnifies emotions and costs. if you are good, it is a good place to end up. if you dont have the $$, it is NOT a good place to start out.