floating a trial balloon concerning pdtr regulation

Quote from Phantom Trader:
"I think Nitro feels that these issues aren't relevant to the group that the Elite Trader Forum is intended to serve. To the extent that they don't affect the "professional trader", he may be right.
To the extent that they may affect even some professional traders, these issues do become relevant to Elite Trader's target audience.
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Emergency exits, doctors' entrances, strict nurses on duty, keep costs down, stays both long and short - BUT ABOVE ALL, YOU GOTTA HAVE INSURANCE"

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I agree and that's what I was trying to get at too along with my points that they affect other nonprofessionals too. And they shouldn't. Plus the $25,000 figure seems so arbitrary. How would some of the PDT rule proponents at ET feel if this figure was changed to $250,000-$500,000? What if they decided you needed $250,000-$500,000 in your account to effectively trade professionally? Would those of you supporting this rule then feel differently if it effected YOU? Think about it.
Also the 3 day trades a week part of the rule is totally ridiculous and arbitrary.

PS. Didn't see your post gaj before I wrote this. We're obviously on the same page.
 
Quote from Phantom Trader:
"It would become a game of Musical Chairs. Those with less than $250,000 would start to sense the unfairness, those with more than $250,000 would continue with smug attitudes of condescension toward anyone complaining. The smaller and smaller group remaining seated would claim "caveat emptor".
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We shall not cease from oil exploration
And the end of all our exploring
Will be to arrive where we started
And pollute the place for the first time
- G.W. Idiot - "

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Good points. That's it exactly. :D
 
Quote from BCE:


nitro,
Who said anything about professional trading and earning a living from trading? I know some people in the thread brought that up but that's not the issue here in my opinion. The thread is about the PDT rule not how much capital one needs to realistically earn a living from trading. And of course having more capital guarantees nothing really. Success in the markets comes from being skillful mainly with a little luck thrown in for good measure. More capital can help but less capital should not be a regulated restriction to trading. If someone wants to trade once or twice a day with say $5,000 (which becomes $10,000 on margin) and try and make let's say $100 extra a week to supplement their income then why shouldn't they be allowed to do this? It's their money. It's their time and effort, etc. They're the ones taking the risk. What's the problem? If some grandma or grandpa or some student or housewife watching her kids or whoever wants to do this what's the problem? But of course they can't do this under these rules. Or they are forced to swing trade which to my mind, in this market, with all that's going on in the world and with individual companies can be even more risky. Or at least they shouldn't be forced to swing trade. How many people here at ET feel they could make $100 a week or more trading daily with $10,000 in a margin account with unrestricted trading? So what's wrong with that?
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I agree with much of what you are saying, I just don't see how it affects what I belive are those that aspire to make trading their life. My initial response was:

Quote from nitro:

How does this affect the professional trader either way?

nitro
More...

BTW, to me, there is no difference between "... the PDT rule not how much capital one needs to realistically earn a living from trading."

nitro
 
Quote from gaj:

i think the bigger fear, rather than a "you must have 25k to daytrade", is that the rule that dictates a *certain* amount of money you must have to trade in a *certain* fashion.

after all, the 25k rule is in. what's to say, in a year or 2, the amount to trade (if you're not 'professional', or a member of a firm) isn't upped to 50k? or 100k? or 200k?

there should be no rule, of course. caveat emptor, and all that stuff.
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50K or 100K would not affect me, and in fact I think they may be good numbers to trade (your own money) with to have any kind of chance. Acess to 200K would affect me. In that case, I would think that this profession may be over for me. I would then either:

1) Join a firm that did not require 200k outlay
2) Go and get another job (and possibly save up to get back in the profession as I work at it now)
3) Trade SSF's or the ES or NQ (assuming they did not also get the PDT rule, otherwise, go to step 1 or 2)

nitro
 
i started trading with 2000.00. it was not enough to buy 100 shares of stock, so i traded small. i also traded options, i could purchase 10 options and control 1000 shares of MSFT or whatever. one can start with a tiny bit of money and develop as a trader.

best,

surf:)
 
Quote from nitro:

I would then either:

1) Join a firm that did not require 200k outlay
2) Go and get another job (and possibly save up to get back in the profession as I work at it now)
3) Trade SSF's or the ES or NQ
More...

And while you were joining a firm, getting another job trying to save up $200,000, and trading futures, you might notice a message on a trading forum from someone else who had been affected by these rules, suggesting that the rule might be amended so you could return to the trading you are enjoying doing now.
And if someone else on that forum replied that less than $200,000 is not enough to make a living, and therefore the PDT does not affect any truly "professional trader", you might reply that you were doing alright making a living for yourself with less than $200,000, before this PDT rule came along to define for you what does or doesn't constitute "making a living".

You might state to that person that as you had previously been a professional trader according to your own standards, that in causing you to join a prop firm, get another job, or move to futures trading, the PDT rule had indeed affected a "professional trader".
 
Quote from nitro:


50K or 100K would not affect me, and in fact I think they may be good numbers to trade (your own money) with to have any kind of chance. Acess to 200K would affect me. In that case, I would think that this profession may be over for me. I would then either:

1) Join a firm that did not require 200k outlay
2) Go and get another job (and possibly save up to get back in the profession as I work at it now)
3) Trade SSF's or the ES or NQ (assuming they did not also get the PDT rule, otherwise, go to step 1 or 2)

nitro
More...


for a guy that's "gotta do size" you don't have any money:eek:
 
Quote from LongShot:




for a guy that's "gotta do size" you don't have any money:eek:
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:confused:

100K * 4 = $400K of stock.

FWIW, most of the stocks that I trade(d) are/were in the $20 to $75 range, all on the NYSE, all on the SP500. C, which is a favorite of mine, closed at $36.11 on Friday. So, hmmmm, I can trade approximately 3,000 shares of Citi ON CASH, and 4 times that or approximately TWELVE THOUSAND SHARES on margin.

The "sweet spot" for most professional equity traders is 2000 shares.

nitro :confused: :confused:
 
Quote from hii a_ooiioo_a:



And while you were joining a firm, getting another job trying to save up $200,000, and trading futures, you might notice a message on a trading forum from someone else who had been affected by these rules, suggesting that the rule might be amended so you could return to the trading you are enjoying doing now.
And if someone else on that forum replied that less than $200,000 is not enough to make a living, and therefore the PDT does not affect any truly "professional trader", you might reply that you were doing alright making a living for yourself with less than $200,000, before this PDT rule came along to define for you what does or doesn't constitute "making a living".

You might state to that person that as you had previously been a professional trader according to your own standards, that in causing you to join a prop firm, get another job, or move to futures trading, the PDT rule had indeed affected a "professional trader".
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Huh?

I would reply that I was making 100K a year, which was 100% return on my equity, which happened to be enough for me to stay in the game as a professional without having other jobs before the "PDT" rule. The poster would probably tell me that if he were in my shoes, he would go the alternative routes where undercapitilization was not an issue.

However, if the year was 2150, and inflation had made so that 100K a year was the equivalent of 25K now, and I turned my "100K" into "200K" without ever going below "100k," I would agree with the poster that I might as well be flipping hamburgers for "100K a year" at McBurgerKing (they had since merged.)

Note that the key element is not that I was able to make money trading (stated as doing "fine" by you above, whatever that means,) but that MY ACCOUNT SIZE ALLOWED ME TO LIVE SOLELY BY TRADING, AND COULD STAND A BAD STREAK THAT INEVITABLY COMES TO ALL TRADERS.

nitro
 
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