Understanding the Pattern Day Trader Rule (PDT) for Day Traders

[@GibsonKnows]

"Being successful is not about having money, it's about the training." Love that!

[@DaytradeWarrior]

You know it!

[@thatstrami]

For a person that knows nothing about the stock market yet and is trying to understand day trading with no previous experience this video is excellent. Extremely simple to understand and extremely informative I really do appreciate this thank you very much

[@DaytradeWarrior]

Thank you very much!!

[@defiverr4697]

"The amount of money you have does not equal education." THE BEST QUOTE FROM RC. Learn it, live it, respect this statement.

[@DaytradeWarrior]

Thank you!

[@bennettt4404]

New small time trader here. ($2000 account). Love the videos. This is week three for me of playing the market, and after watching some of your videos my last 5 trades have been highly successful. Establishing rules, a strategy and goal is key. I very quickly learned vengeance trading and emotions will land me in the 90% group (losers). After some regrouping, I'm back up well over my starting portfolio value. NVCN, IDXG, AKAO, VCEL, DRYS have been my last 5 trades. (all green) Perhaps someday I will join your group once I build up some funds to to do so!

[@bennettt4404]

And yes, settlement times are frustrating. Cash account here

[@barryroberts9086]

Finally an indepth answer to why the PDT rule exists. I asked about the rule on a video comparing forex with stocks on the UKspreadbetting channel. They told me there was no such rule, glad I found this channel instead.

[@DaytradeWarrior]

Hey Barry, I can assure you the PDT rule is live and well lol

[@raistocktradingltd.2175]

You’re the best among all KZbin stock trading educators.

[@DaytradeWarrior]

Thank you Rai!

[@KeithLburns]

this sounds like a market exclusion. A safety net made to keep out the low ball players. makes it harder to have the little guy climb into the nouveau riche

[@Pedroct91]

Finally found a good video about the PDT rule, what is a day trade etc. Thanks a lot for the knowledge!! You got a new subscriber and a like to go with it. :)

[@DaytradeWarrior]

Thank you & welcome Pedro! :)

[@Ophiuchus1]

Ugfhgdugd

[@Ophiuchus1]

Pedro Tagliani my iPad was bugging out and I have no idea what the comment was. lol.

[@nhabuoncophieu5886]

I will learn all the videos of Warrior Trading. If I can't earn money, at least I can fluent English. From Vietnam with respect!

[@DaytradeWarrior]

👍🤓

[@lakatosstefan6926]

I have to say, that this guy knows how to explain things,easy to understand even for a beginner like me, currently trying to watch all his videos,good content!

[@DaytradeWarrior]

Thanks a lot Lakatos!

[@HL1891]

This is the most informative video on KZbin. I am very new to trading and the explanation is extremely helpful. Thank you so much!

[@DaytradeWarrior]

You're welcome!

[@insidedianeslife2456]

Thank you. This was more thorough than other videos I have watched. Thanks for the great information.

[@marco2250]

In my opinion this should be the first thing an aspiring day trader should be presented to.

[@DaytradeWarrior]

I appreciate that, thank you Marco!

[@soloalex9147]

AWESOME content for beginner trader's ! Absolutely love what you do man ! God Bless you and keep up the good work !

[@DaytradeWarrior]

Thank you!

[@Fuaaaark]

I LOVE YOUR VIDEOS MAN! So informing compared to Sykes videos!

[@edwiniglesias3534]

Thank you, for such excellent information. very simple and easy to understand and your calm voice is pleasant to listen.

[@DaytradeWarrior]

Edwin Iglesias thanks Ed!!

[@shamisti]

really great efforts, Thank you for your time and sharing your knowledge and experience. you shorten the distance for many people.

[@DaytradeWarrior]

Thanks for watching!

[@tenseipr203]

Haven't taken single trade yet but these vids are very informational

[@DaytradeWarrior]

Appreciate the thoughts!

[@ken-km7kk]

Excellent video. Thanks Ross

[@DaytradeWarrior]

Thanks for watching!

[@arksonephimmasane5134]

Great training Ross and I appreciate you!

[@WSmart1]

And don't forget to give it a thumbs up. Thanks Ross.

[@DaytradeWarrior]

You're welcome!

[@jefftarver4777]

Great video thank you !

[@DaytradeWarrior]

You're welcome Jeff!

[@manch0vy543]

Great video. Very detailed.

[@tenehab6658]

Great video!!!

[@DaytradeWarrior]

Thanks a lot Teneha!

[@Vamonosnow1]

Hi Ross where I can find a short trade account ?? For I can start trading without worried of the pdt rule

[@DaytradeWarrior]

Hey Pedro, I'd check out either Suretrader if you're trading in the United States, or Tradezero if you're trading outside of the United States. warriortrading.com/my-thoughts-on-suretrader/ www.warriortrading.com/trade-zero-broker-review-how-it-matches-up/

[@Vamonosnow1]

Warrior Trading thanks Ross I’m following you n learning a lot ,when I understand more all the words,the meanings and how to interact the meanings with the graphics I will contact you ,this is freedom !!

[@Vamonosnow1]

Thanks Ross I appreciated

[@waynepatrick1]

Hey Ross, I'm Canadian, just getting started, do you have a good Canadian broker to avoid PDT rule?

[@DaytradeWarrior]

Hey Wayne, Yes I do! Tradezero is perfect for all non-US residents that don't have the minimum $25K account balance. You can read my review on Tradezero here: www.warriortrading.com/trade-zero-broker-review-how-it-matches-up/

[@DavidHt1]

go with Interactive brokers, they are not in the Bahamas....

[@christianperspective9527]

For Canadians there is also Questrade. better platform but higher rates than IBKR. Canadians are exempt from PDT rule.

[@jonny3801]

David Huot Does interactive brokers enforce the PDT rule for US residents?

[@christianperspective9527]

@@jonny3801 yes its the law they have to. Canada has a lot more integration with the USA than the Bahamas or other countries.

[@eydk556]

What is the reason for waiting 2 days cash resettlement with stocks when playing our own money? Is that all apart of PDT, or is it something else?

[@DaytradeWarrior]

For cash accounts, you have to wait 2 days for your funds to settle. This doesn't apply to margin accounts, however.

[@fractalforest]

great video Ross!...2 questions....1. are Canadian residents also subject to PDT rule, specifically with Questrade accounts?...2. just curious if someone was to open say 3 accts with 3 different brokers, can you make 9 trades in the 5 day period(3 at each broker) to skirt the rule, or is that asking for trouble? ...keep up the awesome work, the world needs more people like you!

[@bobmindyou]

Hi Ross, if you are a pattern day trader, do you have to worry about the wash sale rule? Since you trade same stock multiple times, how do you get around the wash sale rule?

[@DaytradeWarrior]

www.warriortrading.com/wash-sale-rule-definition-day-trading-terminology/

[@bobmindyou]

So does that mean if you take a loss on a certain stock, even as a day trader you can’t enter that same trade for another 30 days? Aren’t there any exemption for daytraders to bypass the wash sale rule so they can trade the same stock multiple times even after a loss? Thank you!

[@defiverr4697]

"trade safe and trade smart" 21:08

[@DaytradeWarrior]

👍🤓

[@js2729]

would a cash account get margin call while in a short position?

[@tonyadamo8773]

so if i trade intraday in and out before NY closes,,,,i dont have to worry about the PDT rule? i can trade more than 3/4 times per week??

[@DaytradeWarrior]

Tony, no, that opposite of that. You can learn more here: www.warriortrading.com/pattern-day-trader-definition/

[@clairdesignable]

Ross, this is a great video. I think I have to listen at least 10 times same video but it is great start. Thanks again!!

[@DaytradeWarrior]

That's great! Thanks!

[@matthewpierce3870]

Hello! What simulator do you recommend I use to start trying the market?

[@DaytradeWarrior]

Thanks for watching! We provide a simulator add-on for our Pro and Starter students. The Warrior Pro course provides you access to: - Warrior Pro Classes. A class syllabus is available here: support.warriortrading.com/solution/articles/19000071156-class-syllabus - Live Trading Rooms - Stock Scanners (Gappers, High of Day Momentumn, and more) - Mentor sessions (6x weekly, with recordings available) - Real-Time Trading Simulator Read more here: www.warriortrading.com/warrior-pro-info/

[@kalaifung4716]

Hi Ross. I am curious about which type of account you used with 585 usd? So you could only do a very limited number of trades in the beginning?

[@overplayed3553]

Do you have to pay any fee when day trading margin account trading 8k if I have only 2k?

[@DaytradeWarrior]

Yes, you'll always have to pay commissions and fees when day trading.

[@overplayed3553]

@@DaytradeWarrior Thanks you

[@xraytheory812]

Great video Ross. Thanks for posting. How does a suretrader account affect you relating to filing income taxes? Are you more likely to get flagged/audited since it's off shore??

[@celishastroud9190]

Hello Ross. So if you are using an international account, would you still be trading in USD? Thanks. =)

[@DaytradeWarrior]

If you're trading the US Stock Market, yes.

[@celishastroud9190]

Thank you Ross. I have been watching all of your videos and love them. I have been saving for the Warrior Trader Pro Course. It will be a few months, at least, before I can afford it. In the meantime these videos have been helpful. I love how interactive you are with everyone. Your teaching style is pleasant and easy to understand. I cant wait. =)

[@getenetdebebe9229]

So does that mean the PDT rule doesn't apply if you have a cash account?

[@magician2242]

correct, even though im a year late

[@TheyCallMeVins]

hey ross, buying a 1000 shares and selling three times 10 shares in the same day, does this equal 3 daytrades or just 1 ?

[@DaytradeWarrior]

Hey 2 vinny, that would be 1 day trade.

[@TheyCallMeVins]

ah thx a lot

[@fpvpastor7988]

I've been looking EVERYWHERE for the answer to that exact question! Thank you "2 vinny" and Warrior Trading!

[@pastortrader72]

Been looking for this info, thank you both! As a follow up question, does this also apply to adding to your position - as in, if you initially buy a 1000 shares and want to add to it as things go your way - can you do that numerous times as well... and it still only count as one trade?

[@johnp8487]

This was great, thanks, I been tryin to find out about "day trading rules options" for a while now, and I think this has helped. Ever heard of - Anokeen Trading Tetaniformula - (should be on google have a look ) ? Ive heard some great things about it and my mate got amazing results with it.

[@malickm6285]

Can I close more than 3 (option) positions in a day without breaking the pdt rule. Thanks

[@DaytradeWarrior]

Hey Malick, Options are cash only which means they are not bound by the pdt rule.

[@malickm6285]

What about in a margin account? I guessed closing is selling, in a margin I cannot close more than 3 position a day with less than 25,000$ in my account. Thank you very much

[@DaytradeWarrior]

www.warriortrading.com/margin-account-definition-day-trading-terminology/

[@jarekmatthew8039]

This is a frustrating video, but only because you did such a darned good job of explaining it. SureTrader's fee change has me concerned, so I have a question on margin trading. If I have a 2k account and a x4 margin (8K in usable funds for trading), how does the margin work when I get paid/end a trade up? Example: If I buy 2k shares of XXXX for $3 a share and sell it for $3.50, how much is mine minus fees? Did I make $1000 - fees/slippage/etc, or is there some ratio included in trading on margin? Only 1/3 of the money used for the trade was mine, so is only 1/3 of the profits mine as well?

[@DaytradeWarrior]

The profit is still yours, the fee's is where they get you. That's why you have to be extremely picky on the trades, so you make sure you cover the fees as well and still come out ahead.

[@jarekmatthew8039]

Excellent. Thanks again!

[@CptCraiggers]

I'm still a bit confused. Say I have just 25K and put that in a cash account. Then I use 5K to buy shares. While I have those shares, or after when I am waiting for funds to settle, is my account considered under 25K and subject to the PDT rule?

[@DaytradeWarrior]

Hey, PDT is only applicable to margin accounts. Cash account you have to wait for funds to settle or you can get in trouble with freeriding.

[@CptCraiggers]

Thank you for your response. So, if I have a cash account less than 25K, or more, I can make more than 3 day trades a week without being flagged PDT and everything is fine as long as I don't use funds that haven't settled yet? Are all margin accounts limited to the PDT rule, no more than 3 day trades a week?

[@ehudkrispil]

Thank you for sharing

[@ameagher6402]

Question about the three trade rule. Does it count towards your limit if you buy one stock and sell a different stock? Or does the trade have to be from the same stock? I've heard both and I'm a little confused.

[@funtime-gq8ju]

Q.If you enter 3 times in the same stock and sale once would that be considered 3 trades

[@angierandomstuff]

U answered allot of the questions I had. Thank u😘

[@judejtk3057]

Thank you, warrior trading. can I hire multiple brokers and be able to trade multiple times. at least 3 times with each broker in 5 days? For example, I get sure trader, speed trader and may be e-trade? Will I be considered breaking the rule if I use multiple traders?

[@brianreckart5992]

Great video and detailed explanation.

[@waynepatrick1]

Hey Ross, as mentioned, I'm new here just learning trying see which branch of teaching is best for a neophyte like myself.. I appreciate your honest.. Do you have answer for Canadian brokerages that would be good to avoid PDT?

[@waynepatrick1]

Sorry my apologies I see where you've responded.. Thanks again

[@internetzee9407]

Really helped a lot.

[@NickCarrel]

Alternatively: you can be specific about your 3 trades per week. Or, you could put $25k in to account, and trade as-if you only had $1,000 (if you're just starting out and building your strategy / account)...right?

[@DaytradeWarrior]

yes that's true, those are the two ways you can do it!

[@jboyh23]

Is Sure Trade the best option right now for small accounts

[@DaytradeWarrior]

Here are the top 3 overall brokers we recommend: www.warriortrading.com/the-3-best-online-trading-brokers/ Our preferred broker for accounts over $25,000 is Lightspeed (for US and all international residents except Canada): www.warriortrading.com/lightspeed-trading-review/ Warrior Trading member discounts for Lightspeed: www.warriortrading.com/lightspeed-trading-group-rate/ Our Rebate Program with Lightspeed: www.warriortrading.com/lightspeed-broker-rebate-program/ Here are the top 4 brokers with the cheapest commissions: www.warriortrading.com/the-top-4-brokers-with-the-cheapest-commissions/ For accounts under $25,000 inside of the USA, an option is: warriortrading.com/my-thoughts-on-suretrader/

[@RobertMarinescu]

@@DaytradeWarrior Hei Ross. What is the best option right now for small accounts < $25k who are not inside of the USA.

[@dannythomas4250]

Great knowledge, thank you

[@Drme2]

Hi Mr. Ross, I am a non-US citizen, I live in Dubai and would like to start as a stock day trader with opening small margin account under $25K, therefore, to clarify sir am I going to be excluded from PDT rules? thank you in advance

[@DaytradeWarrior]

You can open a brokerage with as little as $500 at some places. For the rebate program, TradeZero (Non-U.S. students only) requires a minimum of $1000 to qualify for rebate and Lightspeed required 25,000. But there are brokers that require only $500 to open an account. You can learn more here: www.warriortrading.com/tradezero-broker-rebate-program/ I hope that makes more sense

[@literaryartist1]

so if I place 4 different buys (not buy and sell, just buys) is that still subjective to the PDT? Im still unsure if its only subjective to buy and sell.

[@oluwajayjay]

Quick question sir.....If i buy 100 shares of a stock, then another 100, then another 100......the sell 300. Would that be considered one round trip or 3? I am currently trying to scale my position when buying and trying to be careful to avoid PDT. Thanks for all the material

[@DaytradeWarrior]

Yes

[@oluwajayjay]

@@DaytradeWarrior one or three sir? thanks for responding

[@fishywtf]

If you buy 100 shares of a stock Monday, then another 100, and another 100, then proceed to sell all 300 the same day; that is 1 round trip. Vice versa, if you buy 300 shares of a stock Monday, and then sell 100, another 100, and another 100; that is 1 round trip. If you have 1 buy and 1 sell of 1 stock in the same day, that is 1 round trip.

[@makanathegreat3234]

Does the PDT rule apply to online exchanges such as Bittrex or Poloniex?

[@JavierGonzalez-pj2gg]

PDT rule does not pay for crypto transactions since that market is not as regulated in the US

[@KaraLegal]

Ross, do you have to have excellent credit for a margin acct? When I first signed up I had $1k and checked the box for margin and was denied. I've had the account now for about a year and have $18k in it.

[@DaytradeWarrior]

Carol Antantis that's a good question I'm not sure. I think they would have to notify you if they are doing a credit check and I don't remember seeing that; but it doesn't mean they didn't do one.

[@KaraLegal]

They did do a credit check without notification (unless it was in the fine print somewhere - you'd think being a law school student, I would have noticed that), because I have a credit monitoring system and it showed up that day.. Mine was average at the time. Maybe they are just picky because it was a small amount I deposited, or new with them. In fact, I'll chat them tomorrow and ask their criteria, and let you know in case you get asked again.

[@Anthus.]

Carol Antantis Did you turn your $1K into $18K in one year making only three trades every five days? I was curious whether or not one could make money while subjected to the PDT rule of which I assume you are since you had less than a $25K balance. That is pretty good I think.

[@KaraLegal]

Frank Anthus Davis III . I made a few trades (swing) here and there. I had absolutely no skills and got extremely lucky because I was making risky trades that I knew nothing about. I was merely making trades following NASDAQ Twitter feed from what others were doing. If the stock dropped, I'd hold it until it went up. Super scary, now that I have a tiny bit of knowledge. And, not all the money in the account is from trading. I put in $100 a week.

[@KaraLegal]

Ross, my broker req'd a minimum $2k deposit for a margin acct, so therein was the problem. And yes, there is a credit check involved.

[@travisr70]

So if you have a cash account the pdt rule doesn’t apply?

[@DaytradeWarrior]

Hey Travis, That is correct.

[@bvbbibi]

Is this rule on Robin Hood?

[@DaytradeWarrior]

yes it is. www.warriortrading.com/robinhood-app-review-real-cost-free-trades/

[@jailanrayvon434]

bibi ornelas I got 90 day banned from day trading

[@Denos2020]

If I am under 1k and buy say 100 shares of a stock then sell 50 once then sell 25 twice all in the same day, will that count as my 3 trades for the 5 days?

[@pappaflammyboi5799]

Denos2020 Depends on the broker. They can use slightly different interpretations of the rule or just label you a day trader if they're suspicious of your intentions.

[@Pazkizzle]

Great teacher

[@lt_trades2829]

Can you go long/short multiples stocks and hold them overnight to get away with PDT rule? Thanks Ross.

[@porterwallace9541]

I'm not making this up I swear I gave suretrader my information and somebody down there used my credit card information because two days later in Florida somebody use my credit card on Delray Beach pretty sure is one of the workers suretrader

[@bennettt4404]

So say I open a $2,000 cash account at Suretrade, I can continue to trade with unsettled funds after liquidating a stock?

[@Mbstocks2020]

Damn, this happened to me and now just got Suretrader with 3k

[@jctrade2044]

Good info...

[@DaytradeWarrior]

Thanks JC

[@scudrunner5]

Just to make sure I understand, a day trade is buying and selling a stock the same date?

[@DaytradeWarrior]

Yes correct!

[@scudrunner5]

Warrior Trading if you short a stock can you stop the losses if the stock do not go down?

[@outsider2265]

So if i have margin account and deposit 12.500 dollars, which will make 25000 with 2:1 leverage, PDT rule wont apply to me ?

[@DaytradeWarrior]

PDT will apply to you in that case. www.warriortrading.com/pattern-day-trader-definition/

[@devinpable]

I actually watch drys.it was down to 97 or somthing after all the reverse splits.next day was at 3 somting but in the chart showed it was below.WHAT?

[@Ngryn]

Hello, watching this video 6 years later - are the numbers still the same...?

[@DaytradeWarrior]

Yes!

[@matthewbrown2310]

Would you ever do a PDT challenge?

[@DaytradeWarrior]

Matthew, Ross has done a couple in the past, you can check out the latest one here: kzbin.info/www/bejne/bajIppmon8Rmn9k&ab_channel=WarriorTrading

[@matthewbrown2310]

I will check it out as soon as I can. P.s. this is my new favorite channel!

[@itsomar855]

wait so the PDT rule doesnt apply to swing trading

[@DaytradeWarrior]

It does, but if you go with an offshore broker like Suretrader(US residents) or Tradezero(Non-US residnets) you only need a minimum account balance of $500. warriortrading.com/my-thoughts-on-suretrader/ www.warriortrading.com/trade-zero-broker-review-how-it-matches-up/

[@itsomar855]

Thank you. Love your video you make things simple

[@DaytradeWarrior]

I'm happy to hear that! You're welcome and thanks for watching!

[@EpicBaldGuy]

This was informative. However, if brokers have the ability to automatically detect if you have done 3 or more trades within 5 business days, wouldn't they also have a means of finding out how much your balance is and therefore allowing for more trades or denying? This is a simple programmatic conditional statement. If $TRADESINLAST5DAYS == 3 and $ACCOUNTBAL < 25000; then $MARGINTRADING = False; else $MARGINTRADING = True. Am I missing something here?

[@calvarado5988]

Thank you

[@DaytradeWarrior]

You're welcome!

[@shayantaheri2463]

hey ross. can you tel me som information about (unique finance) please? is this company true? please help me i need your help

[@DaytradeWarrior]

Hey Shayan, I don't know enough about them to comment. I'd suggest checking out Warrior Trading's courses if you're thinking about learning how to day trade: www.warriortrading.com/trading-courses/

[@flerfsmash]

this sucks...what kind of account did you open with your 500$? thats all i got man

[@DaytradeWarrior]

As a U.S. resident, you can use a broker like Suretrader. They have higher commissions/fees and do not offer a broker rebate program, but are an option for accounts under 25,000k in the USA. You can learn more here: warriortrading.com/my-thoughts-on-suretrader/ Or you can check out Tradezero - www.warriortrading.com/trade-zero-broker-review-how-it-matches-up/

[@deogeneslascojr.7256]

Cheers for this, I've been looking for "trading systems and methods pdf" for a while now, and I think this has helped. Have you ever come across - Anokeen Trading Tetaniformula - (just google it ) ? Ive heard some decent things about it and my buddy got cool results with it.