Do i need to maintain 25 k on my balance always other than the money I use to day trade, or only to have 25k you can day trade ??

 

what if it looses value less than 25k ??

 

 

Yes, once your account is flagged as a Day Trading account, you need to maintain at least 25K balance at the beginning and ending of each day.   If you fail to maintain the 25K balance, your account will be restricted to closing your open postions (you can sell your current stocks and cover your short, but you are not allowed to buy or short new ones). 

does this mean totaly equity? for example if i had $10k in stocks and $20k in cash balance, with a $30k total, can i day trade?

Yes, you can day trade.  Just as long as your equity (cash+stocks) is at least 25K, you are allowed to day trade.    Here is an example of what you can do and can't do.

For example:  if you have 25K in cash, you are allow to buy upto 50K of stocks and hold them overnight (note: assuming that the stock in question doesn't have 100% margin maintenance requirement).   However, you are not allowed to hold 100K of stocks overnight.  If you hold more than 50K of stocks overnight, they will automatically sell your stocks (at random) and at whatever the current market price (even if your stock is valued at $100 a share, they can legally sell your stock 1 penny a share).

My advice to you is:  Do not use your Day-Trade-Buying-Power and only trade with the money you can aford to lose.   Just becuase you have 4 times the buying power, that doesn't mean you have to use it.  

so stardust

Basically I want to day trade, so since i  exceed 3 trades in 5 business days am flagged as a patern day trader (always)?              so from this moment on I need to have 25k, or is it after 5 days cancelled the flag ?

 

and so even if i didnt close the positions, but the amount of my investment is below 25k, am going to be freezed ?

 

then for how long am going to be freezed ?

yes, it does.  As long as you maintain 25K in total equity each day you are good.

thanks man

I need to know if I lost value below 25k, when am i able to buy again ?

albaraa:

I need to know if I lost value below 25k, when am i able to buy again ?

You have two options:

1.  Wait and hope that your stocks will gain back their values so that your balance will be back at 25K or higher.

2.  Deposit more money into your day trading account to bring its balance back up to 25K.

Btw, once your account is flagged as a Day Trader, there are 2 ways to unflag it:

1.  Call your brokerage and beg for forgivenness.  Just tell them that you don't know what your are doing.  You are allowed to make 1 mistake.

2.  If you stop making 4 day trade roundtrip within 5 business days for  90 days (sorry, I don't remember the correct number of days, but I can tell you that it won't be less than 60 days), your account will be unflagged automatically. 

Good luck!   You are definitely going to need it.  Historically, most day traders won't last a month.  If you decide to become a Day Trader, make sure that you don't keep any guns or dangerous weapon near by.   If  you are married, make sure that you discuss it with your spouse first.    I used to be a Day Trader myself.   I had traded between $25 to $30 millions of assets per year.   In the end, I was no richer than what I started out with.   Of course, I don't day trade any more (well, may be a couple day a month just for fun).   If you value your life and your way of life, you should think carefully before doing it because this could be the beginning of your downfall.   You can trust me on this!!!  There are many days that I thought of ending my life because the pains of losing was unbarable.   I consider myself very lucky to have live through it.   My final advice to you:  DON'T DO IT!!!    At least, not now.  I can see that you are not ready to be a day trader.   Because if you are ready, you wouldn't be here asking questions about it.   If you still want to day trade, I recommend that you read "Day Trading Online" by Toni Turner.  

 

Thanks StarDust,

 

You have made alot of effort to write this reply. And I really thank you for the advice, as I give it personally to everyone. Well its too late for me, I have been a day trader since 21 yrs old, I was asking because I didn't day trade in the US market before, and so I have been reading first the regulations after I have studied the US market now for 1 quarter. The points you mentioned I have passed around them before in my reading, but I wanted to know If the value of my account is below 25K, am I able to trade at all, even if not daytrading, or is it done and I cant trade anything anymore, which is really unlogical? and so if am below 25k, can I take out my money after selling and transfer it out ?

 

Best Regards,

The Engineer

Yes, you can sell, and remove the money. Also, slight clarification, you can up to 3 trades in a rolling 5 day period. It's the fourth day trade that flags you.

I'm just making sure.  When they say 3 trades in 5 consecutive business days that means you can place 3 day trades monday through friday and it resets on monday correct?  Or if I place 2 day trades on friday, I cant place 2 day trades on monday.  Also, I the positions are closed out before the end of the day, no margin intrest is accrued correct?  Thanks.

The five day period does not "reset".  Five consecutive business days is pretty self explanatory.  Margin interest will not accrue on a day trade.  While I realize that unsolicited advice is seldom followed, if you are asking questions like this daytrading should be the furthest thought from your mind.  jmho/ymmv

wewantutopia:

I'm just making sure.  When they say 3 trades in 5 consecutive business days that means you can place 3 day trades monday through friday and it resets on monday correct?

Incorrect!   If you have made more than 3 roundtrips within 5 business days, your account will be flagged as a Day Trader.  There is no reset whatsoever.   The time frame is any 5 business days; the days are consecutive but the trade doesn't have to be consecutive.

Or if I place 2 day trades on friday, I cant place 2 day trades on monday.

Keep in mind that it has nothing to do with the number of trades that you make.   It's the complete roundtrip that count.  If you don't understand the "roundtrip" concept, do a GOOGLE search on "day trading pattern".

Also, I the positions are closed out before the end of the day, no margin intrest is accrued correct?  Thanks.

Correct!   If you are not on margin at the end of the day, there will be no margin interest.