Need Broker Advice

[OBXtrader]

Hi, all!

My first post - Just want to say "Great community you have here". I've read a lot of your posts and see that there are some brilliant minds here.

I need a little help finding a broker/trading platform with the following in mind...

-I only have about $10000 of risk capital.

-I've been long-term investing for about 5 years, mainly in buy-and-hold fashion, but I've been studying active trading strategies for about 2 months - paper trading and simulators.

-I really wanted to go with Tradestation, but disappointed to find that I don't meet their rigid financial requirement - minimum initial investment for day-pattern trading (what good is a non-day trading account on a tradestation - geez!).

-I still have a day job and would like an automated means so I won't have to stare at screens 8 hours.

-Looking to use a strategy which yields small, but consistent, growth, for the next few years.

What's the best broker and/or platform would you recommend for someone with the requirements/restrictions listed above? Can I run an automated platform on Scottrade?

Again, thanks for your help and thanks for all the information I've been able to obtain from you folks on the forum, as well as the tutorials on the site.


Thad

 

[j_medved]

No, you cannot run an automated system on Scottrade.

As for PDT requirement ($25,000) that is an SEC requirement so if you plan to really daytrade, you will have to get 25K first. Otherwise, you will have to limit your daytrading so you will not be labeled a pattern day trader.

 

[Truff]

if your going to day trade, not only do you need at least 25K, like MEDVED said, but you need to maintain a 25K balance at all times. So in reality you need more than 25K otherwise you have no downside risk. If you have only 10K to trade with and you want to day trade, it is still possible. All you need to do is seek funding. For instance, i could get you 10-1 during the day and 4-1 overnight on your money, but it would cost a small monthly fee, something like $500 or 1%. Funding is a must at your level cause 10K wont get you far. If you want more info you can email me personally at elitetrader . GOOD LUCK !!

 

[OBXtrader]

Quote from Truff:

if your going to day trade, not only do you need at least 25K, like MEDVED said, but you need to maintain a 25K balance at all times. So in reality you need more than 25K otherwise you have no downside risk. If you have only 10K to trade with and you want to day trade, it is still possible. All you need to do is seek funding. For instance, i could get you 10-1 during the day and 4-1 overnight on your money, but it would cost a small monthly fee, something like $500 or 1%. Funding is a must at your level cause 10K wont get you far. If you want more info you can email me personally at elitetrader . GOOD LUCK !!

$25k would be tough to obtain anytime soon. Once I saw the restriction on tradestation, I figured I'd be able to conservatively trade for roughly 4% weekly gains, compounding over 7 to 8 months on Scottrade, or maybe even IB. With some strong discipline, I should have at least $25K in the account (or $50k if I maintain that track record for 52 weeks). To make my weekly goals, I'm likely going to be making 10 to 15 trades a week at most - most of which might be on the same day.

Tradestation says that if I make more than 3 trades in one day, I'd be considered a pattern-trader? So if I buy CSCO on Monday, MMM on Tuesday, QQQ on Weds, SIRI on Thursday, and then sell off all 4 positions on Friday, I'd be considered a pattern-trader by SEC definition? Is this correct? I suppose I could pattern trade 1 equity to limit the amount of trades I do in a day, but that seems a bit risky to throw all my eggs in one basket (a cliche, just in time for Easter ). If I start an account with Scottrade, will they limit me to 3 transactions a day if I have less that $25k in the account? That would suck if your 3rd for the day was a long position, going in the wrong direction.
Please help me understand the SEC pattern-trade definition and whether or not there's a way around the limitation. I'm a burnt out buy-and-holder who's been watching his investments inch too slowly over the last few years. I can't take another 10 years in the corporate jungle.

Thanks, again.