This rule doesn't make sense. Isn't it better for a new trader to risk less money when starting out rather than have him get more money by borrowing and other means etc. and end up losing 25k+ when he could've gotten his feet wet for a measly 5k?
Summarizing some points against the PDT rule here: Not adjusting to volatily. The average daily range is 1/3 of what it was when the rule was enforced, yet the limit is still 25K. The rule applies even if you are not daytrading Example using a strategy with holding time from 1-15 days, sample 10 trading days: Day1 : Long 3 stocks , stopped out on 2 the same day. Day2: New entry Long 1 and short 1. Stopped out on short. Day3: Get 2 new signals, but ooops, PDT rule kicks in now if stopped, so no entry Day4: No entries due to PDT Day5: No entries due to PDT Day6: Get signals on 3 stocks , but can only enter in 2 due to PDT, Not stopped out. Day7: Enter 2 stock , stopped out 2. Day8: Get signal on 3 stock but can only enter 1 due to PDT. Day8: Get signal on 2 but make an error so selling instead of buying , correct this immediatly with minimum loss , cannot execute the next one due to PDT. Day 9 : No entries due to PDT Day10: No entries due to PDT. 10 trading days, 7 of them affected by the PDT rule , no daytrading, 5 stops and 1 error. Nothing unusual with the example. So the the PDT rule will punish position traders using stops and correcting errors. Not possible to start small A trader that is learning cannot start small using 100 share sizes and building as he/she learns. But are forced to start with high leverage futures or forex. Probably a good idea to create some kind of list with as much facts and clear examples as possible and ...ahem...stay out of the general political issues.
I agree thanks PDT is a classsic example of (potentially) good intent in enacting a law/rule that in practice does not achieve its purpose - and in fact can "do more harm than good"!
someone needs to make software that combines our accounts and separates the p&l, the margin,and just basically breaks it down into how many ever different accounts???? what do ya THINK?????????????
uh???? what has all of this got to do with pdt rule overthrowing efforts... what do ya THINK??????????????
if there are 5 traders with less than 25 k in their accounts, when combined they have 50,000 then the rule would not bother them. just in case u want to trade before this campaign comes to fruition....lol
Sorry, that's not the way it works. You can not combine accounts; not even personal accounts. If it is being done at a brokerage, it is not keeping within the existing PDT rule.
This thread is a good thought, but it is beating a dead horse. I took to arms back when this whole thing got started. They pulled it over everyone without making it public-- although they said it was. Nobody really knew about it until it was passed. Anyway, I took to arms, started calling, e-mailing, and voicing my opinion. After being talked to very rudely by a rep. at the SEC, they finally hung the phone up on me. Believe me, the powers that put the PDT rule in place is far bigger than anyone would think. I finally just walked away added more cash to my account and forgot about it. End of story.