If you are a US resident who has a small trading account, under $25,000, and want to trade stocks you must comply with the PDT Rule. You must comply because all US brokers are mandated to comply. There is no way around it.
The PDT Rule, Pattern Day Trader Rule, was put in place to regulate the activity of small account stock traders. It mandates that you can only make 3 day trades in a rolling 5 day period. A day trade is when you open and close a trade on the very same day. As day traders we can make 3 day trades in one day. That means if you make 3 day trades on Monday you will not be able to trade again until the next Monday.
There are ways to getting around the PDT Rule. And I’ve tried them all. I’ve opened different LLCs so that I could have 3 more day trades in my arsenal. I’ve opened up an off shore brokerage account. They do not have to adhere to the PDT Rule. But their fees are mad high. But the best method to avoid the PDT, in my opinion, is to give up trading stocks. Not give up trading. But give up trading stocks and start trading Futures.
Futures are not bound by the PDT Rule. And they have more advantages to trading stocks in the US. You do not have to have $25,000 in your brokerage account to be free to trade as you like. The barrier to enter is much less. If you have an account with Charles Schwab and are approved to trade Futures all you need to have is a minimum of $1,500 in your account. And there are many options for trading. You can trade Micro Copper Futures at $600 per contract and margin is built in.
So, if you are tired of the restrictions that you have to put up with in the US trading stocks with a small account start trading Futures. You can thank me later.
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