I have been a student of the stock market since November 2016. As most here, I am under the PDT rule restriction. As Tim says he hated it at first, but then realized when beginning that you only need 3 day trades a week and should embrace it.
This is not just a disciplinary essential, but also a strategical essential. First and foremost you don't need to be trading that much at first because you are inexperienced, and have only seen a small piece of the market. This will give you time to find your small section of the pond to swim in, which is all you should be doing at this point. What I mean by this is that you should be trading very specific set ups, sectors, patterns, etc.
This may look like contract winners, earnings, patent, FDA approval winners first big moves, sniper plays. If you try and chase every alert, and top gainer you will lose because you are too unfamiliar with the many way different stocks can go. This begins to cover the disciplinary aspect here.
With that said, on to the strategical part of trading under the PDT rule.
You can only afford to play the BEST of the BEST set ups in which you are very familiar with. Why? Because you only have three day trades, and possible overnight potential (risky). You simply can't afford to take advantage of small price moves like those with unlimited trading because you have a small position (under $25,000) and hopefully only a small percentage of that. You will not make enough money from them, and commissions will eat your account.
In conclusion, no matter how good you think that you are when you begin trading you are learning and will continue to be learning until you can grow your account past the PDT rule, and beyond!
I hope this helps some of you.
this is so true - ive been overtrading ALOT my first two months in the challenge - definitly should have went with a broker with PDT rule - that would have cut my losses dramaticly
NO - open up a cash account with one broker so you can take unlimited long trades then use your margin account to short since you need one to go short.
unlimited long trades? Just this little thing called t + 3 that gets in the way of that.@IceMan14
@InvestorCenter I've never had any problems with that using TD
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