I was just wondering what is the difference between a direct access broker and a prop firm? If an individual wants to day trade stocks with cash around 5000 and below what will be the best bet to avoid pdt rule? Any advice will be great!
TD Am will give you 500 free trades in 60 days with a 5 grand account which is more than enough time and trades to lose 5K day trading. 5K will buy about 9 shares of Priceline which doesn't give you much to work with day trading. Try options.
You can tell how naive the poster is regarding trading when he things 5K is enough to actually make profits when trying to day trade and compete against professionals with millions in capital and million in infrastructure equipment plugged in directly into the exchanges. There are plenty of ways of making a living trading. But trying to day trade 5K is definitely not the way. For the OP, what you are asking is. "Is it possible to take my Toyota Corolla into the Indy 500 races and win first place, with no race driving training or staff/equipment to back it up?"
with 5k your best bet is to open with Oanda and trade forex very small. All the trading principles in forex are the same as with anything else, but you have the safety of controlling size, which is not available to you if you are limited to minimum futures contracts or even 100 share round lots in stocks, plus you will need 40 to 1 margin to get anywhere. Don't listen to the idiots who only know how to survive unless they start with enough to die slowly. Although, to save you some time, the best systems if tested to infinity will always blow up. It doesn't matter if you know nothing about forex. Knowledge, especially in the early stages is probably the most destructive force you will first have to overcome. You are going to be paper trading only on a simulated account for at least 6 months. And during that time you will be scrimping and saving money from your real job to add to your real money account. I'll bet you a dime to a donut after the first 6 months of paper trading and saving you will have beaten at least 50% of all traders, beginning and seasoned professionals combined. Less than 50% of all money managers managing mutual funds professionally beat the market in any given year. And less than 15% have ever beat the market in three consecutive years. There is no point risking real money until you have proven to yourself you can consistently make play money. Now all you have to do is ignore all the other losers who will try to convince you real money is totally different than play money.
otherwise, 5k is just simply not enough to trade stocks with either retail or prop. If you're dead set on stocks, your only option is to pick one buy it and hold it and hope for the best until you have saved up another 5k to buy another one. That's how Warren Buffet ended up with a billion dollars.
5k is 5k, and no matter how wonderful the prop firm is, once you are down 5k you are out the door. If you have devoloped a winning strategy and your only obstacle to making a full time living from it is capital, then that would be a time to consider sharing with a prop firm in exchange for capital.
if you can't distinguish help from a shill for a prop firm you will probably have a difficult time hanging on to your five grand anyway.
That is a really rude question! If you don't have anything good to say than don't say anything at all.