Pattern Day Trading Rule, how to avoid
- Thread starter Diego443
- Start date
1. some leveraged ETFs can be hedged pretty easily to hold overnight without much risk and without day trading to get out, for instance, say you buy $3000 worth of DWTI and it starts to go against you near the close and you want to liquidate but cannot make a day trade, just buy $3000 worth of USO (or UWTI as a second choice), and your account will be pretty close to hedged regardless of gaps the next morning; there are lots of leveraged ETFs that can be hedged like this; unleveraged ones too: just buy the inverse etf to offset the long etf and vice versa; of course, don't buy too much of something or you won't have enough cash left to hedge (and the next day you have to decide to liquidate one or both of the etfs)
2. maybe hedging can be done with options too, but I think the spread will cost too much to make it viable; ETFs with really low volume will probably hurt too
3. if you are near 3 day trades in one week, then only open positions within ten minutes of the close so you are forced to hold them until the next day
4. if your risk is going to get hit that day, then you need to take smaller positions and let it stand until the next day; then, if your trade is still viable, ie, your trend is intact, you might average down a little more, that is, buy some more at a lower price, BUT ONLY IF YOUR TRADE STILL MAKES SENSE (but then you're stuck with the same problem if the market goes hard against you!--so better still to take positions at the end of the day near the close); otherwise, take the loss the next day
5. you could also combine 3 and 4 above and take a small position earlier in the day, and then add more shares right before the close if the trade still looks good
Good luck!
2. maybe hedging can be done with options too, but I think the spread will cost too much to make it viable; ETFs with really low volume will probably hurt too
3. if you are near 3 day trades in one week, then only open positions within ten minutes of the close so you are forced to hold them until the next day
4. if your risk is going to get hit that day, then you need to take smaller positions and let it stand until the next day; then, if your trade is still viable, ie, your trend is intact, you might average down a little more, that is, buy some more at a lower price, BUT ONLY IF YOUR TRADE STILL MAKES SENSE (but then you're stuck with the same problem if the market goes hard against you!--so better still to take positions at the end of the day near the close); otherwise, take the loss the next day
5. you could also combine 3 and 4 above and take a small position earlier in the day, and then add more shares right before the close if the trade still looks good
Good luck!
Last edited:
Sadly, the main issue is the market gap, being out most of the time by the close, was pretty standard and required a fair few times.
Gap Downs and Reverse in the first 2 hours likely made most of my profits.
Index's / whatever via Futures, becomes very day tradey and well took my years to adapt, pretty much cracked stocks from the start, guess 2:1 Leverage not 200:1 being the main issue, happier to hold and average down for the longer trend, where as futures the amounts are just too much to risk.
But it's the only real way, so needs must!
DAX until US Pre Open, then DAX and US30 till Europes Close, then just US30 here ( YM )
With Stocks guess I used to take advantage of the gaps, Bullish Stock, Market gaps down on bad news drags it down, stocks still bullish so odds are it'll continue up, and vice versa ofcourse.
I was on about 10K area and making 1K per week most weeks, which for me back then like 14years ago, was a lot of money, hadn't spent as much as I did having fun, could of cleared the 25K+ and likely be RICH these days.
Not dedicated a lot of time to markets after that, kinda of a start doing well and they'll find a way to knobble Retail again
thankfully UK, so not effected by FIFO hatefulness they subjected yanks to.
We where on mass over all, taking money and making it hard for them, so they stopped us
cy group proprietary trading