Day Trading with less than 25k

Discussion in 'Retail Brokers' started by BenChi, Nov 15, 2005.

  1. BenChi



    Just wondering if anyone has any suggestions as to how to go about day trading securities with less than 25k in ones account.

    (The NYSE regulations state that if an account with less than 25,000 USD is flagged as a day trading account, the account must be frozen to prevent additional trades for a period of 90 days.)


  2. Trade futures or options at Interactive Brokers. Stocks is a dying game, all the action is in derivatives these days.
  3. BenChi


    hi chewbacca,

    yes, that would be one way of solving the problem. what is the justification for your belief?
  4. Anybody who thinks about daytrading with <$25K is an idiot, especially in this era where a bank CD almost has more volatility than the crappy market!
  5. Well ben chi
    why dont u join a prop firm and put down $10000 and get 1:10 margin 100K DTBP
    especially if your are day trading
    there are so many firm out there imo
  6. coolgatch


    :cool: Your account doesn't have to be inactive for 90 days. You can trade everyday. Here's how:
    1. Request that your broker disables your margin and reverts your account to strictly "Cash". Not having access to Margin, you will be allowed to trade, because now it's only your money you're putting up to market risk.
    2. Your trades will have a "settling" requirement imposed on them, i.e. every BUY in a round-trip trade will have to settle, which normally takes 3 business (trading) days. E.g. you BUY and SELL stock XYZ the same day, say - Monday, but you won't be able to use the proceeds from the SALE side to trade the same day, or Tuesday, because the purchase has to settle (almost like a written check that has to clear your bank). Usually, to continue this example, by Thursday morning your funds will became available again for trading.
    3. Split your portfolio into three equal parts. E.g. if you have, say $21K in your account, designate $7K to your daily trade Buying Power. Use the first $7K to do a round-trip trade Monday, the second $7K to do the same on Tuesday, likewise the third $7K on Wedn. Thursaday morning your Monday trade will have settled, so you will have your first $7K available again for trading. On Friday the second $7K from your Tuesday trade will settle --- you get the idea...

    To those who think trading with less than $25K is impossible/not feasible, I have only one thing to say: I manage to make betw. $250 - 300/day trading this way, which is a daily gain level where it's duplicating my daily wages from my regular job. I'm fairly confident that as long as you don't have to draw on your account for living expenses (as in: paying yourself a salary as a full-time daytrader), its compound growth should get you fairly quickly over the $25K line, at which point you will be able to use leverage (margin) again, with no restrictions on frequency of trading. Good Luck!!!
  7. why day trade?

    what makes you think you need $25,000?

    what do you intend to gain by day trading in contrast to investing, even for 3 days (i.e. swing trading, which is significantly less volitile)

    if you can honestly answer these questions to yourself, not this thread or these boards,

    then you have a better than average chance of keeping your money and making something on it....

    Day trading is as enticing as the date you could never get. That whore alures everyone and wisphers sweet nothings into everyone's ear.

    Only a few survive...
  8. fatrat


    I make my entire living trading nothing but a $5000 account. I use quite a bit of margin -- far more than 4x that an IB will give you.

    The best way to go is to be serious about this, find a trading group that does quite a bit of volume, and tag along with them. Or, join a prop shop like Assent and go remote.

    When you start though, don't trade more than 100 shares at a time and don't let your losers be larger than $3-4 at a time. This will allow you to make the most of your cash until you know how to cut losses properly and make money.

    I was fortunate in that I was friends with a very nice fellow who had been professionally trading profitably for over 2 years. He let me join his group.

  9. From your previous posts, I suspect your entire living must be in your parents' basement. (Very low overhead!)

  10. fatrat


    Yep. Very low. I'm not going to pretend I'm a hotshot. I make $100-$250 a day. I'm scaling it up slowly.

    #10     Nov 20, 2005