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Day trading with less than $25,000 in equity?

post #1 of 21
Thread Starter 
Is this possible?

I don't have $25,000 floating around at the moment, and swing trading doesn't seem as productive to me.

Are there any brokers I can use to bypass the SEC's minimum $25k equity rule for daytrading?

Thanks!
-Derrick-
post #2 of 21
If you have say $10k, put $2500 in four different broker accounts. That would give you up to 12 flips a week.
post #3 of 21
Quote:
Originally Posted by derrickwalker View Post
Is this possible?

I don't have $25,000 floating around at the moment, and swing trading doesn't seem as productive to me.

Are there any brokers I can use to bypass the SEC's minimum $25k equity rule for daytrading?

Thanks!
-Derrick-
Derrick,

Not that I know of.

Guapo
post #4 of 21
Quote:
Originally Posted by Blooey View Post
If you have say $10k, put $2500 in four different broker accounts. That would give you up to 12 flips a week.
true, but i dont know of many daytrading oppurtunties that can be capitilized on with 2500 dollars,

To the OP, why dont you find swing trading productive?
post #5 of 21
Quote:
Originally Posted by Blooey View Post
If you have say $10k, put $2500 in four different broker accounts. That would give you up to 12 flips a week.
Blooey,

True but that only gives you three round-trip trades per 5-day trading period on each account, and it would have to be separate blocks of stocks for each account. I wouldn't call that day-trading, not in the traditional sense of the term anyway.

And trying to keep track of your day-trades for four accounts to avoid violating the pattern day-trader rule could be a real headache too.

Guapo
post #6 of 21
There are places that exist that allow you to daytrade with <$25k and HSM even advertises for one of them.

http://www.worldwidetradingcapital.c...c-leverage.asp

Minimum is $5k but I don't have any experience with them. You would have to be approved to open an account as trading with that kind of leverage can be very dangerous if you don't know what you're doing.
post #7 of 21
yes you can, just trade futures instead of stocks, futures allow you to trade as much as you want with alot of leverage. They are plenty of futures brokers that allow you to open an account with 3k-10k. its a double edge sword tho, $ can move very fast.
post #8 of 21
Simonyadig,

Thanks for that info. That's probably not widely known. From just a cursory look at that site, it's loaded with fees.

There is a $99 dollar one-time set-up administrative fee. There are monthly subscription fees for the various platforms they have, starting at $99. If you meet certain trading requirements, the monthly subscription fees are refunded.

Lastly they have monthly leverage fees. For account balances between $5000-$1000, it's $150-$225. The higher the account balance, the higher the leverage fee.

This site is definitely not for a beginner, plus anyone wanting to day-trade should be in a position where he can trade full-time. A part-timer, someone who can't trade every day or someone trying to day-trade from the office would be eaten alive with the fees.

That's also not considering that most day-traders go broke. I recommend anybody wanting to day-trade get a couple of year's experience with regular trading in the markets before they try it.

I'm talking about real day-traders, the guys that make dozens of trades a day on small changes in the price of the stocks, not folks who just want to flip stocks a few more times a week than what the pattern-day trader rule allows.

Anyway, that site is for the real day-traders. It's too expensive IMO for folks that are just trying to circumvent the pattern-day trader rule.

Guapo

Quote:
Originally Posted by simonyadig View Post
There are places that exist that allow you to daytrade with <$25k and HSM even advertises for one of them.

http://www.worldwidetradingcapital.c...c-leverage.asp

Minimum is $5k but I don't have any experience with them. You would have to be approved to open an account as trading with that kind of leverage can be very dangerous if you don't know what you're doing.
post #9 of 21
Forex - though u need to Demo for atleast 3 months to figure it out. If you know how to read a chart(if you have half a clue as in my case) and have patience you should do ok. Just takes hours sitting in front of the computer watching the price action to the hang of the swings.
post #10 of 21
you can also go to a prop firm. Bight trading, Accent and VCM are a couple popular firms. You take their boot camp on trading, you give your 5-10k as backing and they let you trade with the firms capital and commish is usually cheaper than most online brokers.
post #11 of 21
You can daytrade with less than 25k, use a cash account without margin, all the settled cashh u can trade all you want
post #12 of 21
Quote:
Originally Posted by timmyb199 View Post
You can daytrade with less than 25k, use a cash account without margin, all the settled cashh u can trade all you want
prop firms will take 5-10k and you can trade with a bunch of the firms $ without needing to let it settle.
post #13 of 21
Questions... What's a prop firm? Are they safe to put your money with them? Are they expensive to use?
post #14 of 21
I have a question that is somewhat related to daytrading...
I currently use Ameritrade, and what really prevents me being able to day trade is the fact that if you buy stock ABC and sell it in the same day, they won't let you use that money to buy another stock for 3 days, even though it is actual money I have in my account (I don't trade on margin). Does anyone know if there is a brokerage that doesn't have this rule or a way to bypass it without funding my account with 25k?
post #15 of 21
i also had this problem too. i use e-trade so i called them up asking if there was anyway i could do this. They told me as long as i have a $2000 minimum balance in my account and activated the margin trading option i would be able to trade with the money i didn't recieve back from selling atm. To my knowledge of researching this topic i don't think u can trade like that without using margin. i have a friend that use's margin on ameritrade and another that does so as well with scottrade.
post #16 of 21
hey guys just wanted to share my experience with the day trading margin call (PDT rule) and how i overcame it

firstly i was with scotttrade thinking i could scalp but WRONG you cant i had about 5k in there and they wouldnt let me buy and sell the same day unless i had 25k, so i did some searching

prop firms let you bypass this rule by trading their capital i was with vcm for a while but their support wasnt so great and charged high fees, so i checked a few other firms and found www.cygrouponline.com -- they are good so far, good platform, good support, and they have a chatroom for good stock picks

how it works is this, you pay a 5000 membership fee and they allow you to trade 100k intraday

when you profit withrdawls are pretty easy just use the withdraw form

when you want to close your account, you submit your request and they refund the membership fee

if you take a loss they subtract it from the refund they give you on the membership fee

once i found out about them, ive been trading ever since and didnt have to bother with the PDT rule, its awesome, alot of people dont know about these types of firms, i guess its a word of mouth kinda thing

but for anyone looking to figure out a way past ameritrade, etrades, scotttrades pdt rule, check out prop firms, they are all different i just decided to go with www.cygrouponline.com because the setup was easy and they responded to my questions fast, ive never found a reason to leave.

hope that helped
post #17 of 21
Quote:
Originally Posted by Blooey View Post
If you have say $10k, put $2500 in four different broker accounts. That would give you up to 12 flips a week.
This is the most intelligent strategy I've ever heard
post #18 of 21
I have used that strategy before, only bad thing is that you can only have 1 margin account with each broker.

I user interactivebrokers and I made a margin account, and a cash account. They allow instant money swapping between accounts, so when I use all my trades up with margin, I just send the money over to my cash one.
Gives me 6 roundtrips every 5 days, which is good enough. I trade options so the cash account will clear overnight
post #19 of 21
Quote:
Originally Posted by Blooey View Post
If you have say $10k, put $2500 in four different broker accounts. That would give you up to 12 flips a week.
is that LEGAL???????????????????????????????????
post #20 of 21
p.s there are a million DT thread asking every question you can think of.
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