Hi all, I am new to day trading world of stocks. I need your suggestions in this regard. 1. Whats is the best day trading brokerage? 2. I have 40k to start with, I heard that it takes 3 days for settlement of orders if I buy some stocks with my whole money so do I need a margin account? 3. What are the rules for margin account. Pls suggest some web sites for more info. Also, pls share some strategies for newbie day trader. Much appreciated.
Hey there. I am new too. I am using thinkorswim cause I was recommended them as good with people starting up. They seem pretty cool actually, they give really fast live customer support via the platform and its totally papertrading - You can use all the facilities just as if you had a live account, and they even gave me live data (off the record) when I asked, but I did promise to get a live account funded with them (which I think I will). Its quite easy to use and when i get a question they answer me within minutes via built in chat. Everything seems good. I dont know anything about the settlement taking that long, but for sure just ask them at thinkorswim in the live chat, and they´ll tel you straight away. I will be funding just enough to get over PDT and they have not outlined any problems for me. Didnt even know theere was this PDT, was going to put 5k in, but gonna have to go probably 30k now. I´d be interested in any Newbie strategies too... If anyone can help that part. Thanks.
I'm in the same boat right now and here's what I've learned: 1. It's a federal regulation that you must wait 3 days for your money to "settle" before you can trade with it. During those 3 days, if you trade with "unsettled" money it is considered a "free ride" which is discouraged by brokers (I don't know why). I use Scottrade and I imagine most other brokers have similiar rules, but if I continue to do "free ride" trades after they warn me to stop, they will penalize me via account suspension or closure. 2. A margin account will allow you to trade with your broker's money and thus enable you to continue trading even though your funds are "unsettled". A margin account is also the only way you can short sell. I don't know about other brokers, but Scottrade charges interest based on how much of their money you are trading with, but it's not a huge amount. They also require me to have 50% of account equity of the amount of their money I'm trading with, which I assume can be unsettled funds. 3. To open a margin account, all you really need to do is fill out a form and sign it. At least thats all Scottrade is making me do. 4. What do I think about Scottrade as a broker? Well, since my bankroll is only 10k, I don't get to use their quality platform which requires a minimum account balance of 25k to download. That kind of pisses me off, but w/e. Otherwise I have no complaints. They have a lot of offices.
One of the most important aspect in the success of day trading is money management. I mean it is less of the actual trading strategy(technicals or fundamentals) but it is more of how you manage your money in trading and calculating the risks. I suggest you will read this free <a href="http://www.stock-trading.me/">online stock trading tips</a>. It contains a lot of advices in entering and exiting a trade with emphasis on money management.