Im considering moving from a paper trading account to live but, Im getting different answers to a very basic question. I am aware of the pattern day trade rule... which states that if a stock trading customer makes four or more day trades (opening and closing a stock position within the same day) in a five-day period the customer is considered a day trader and must maintain a minimum $25,000 account balance. Does that mean that as a swing trader if I hold multiple positions overnight this doesn't count as day trades and really there is no limitation on swing trades since the majority of the time, most positions will be held more than one day?
I found confirmation. I was correct. according to this. https://www.thebalance.com/how-to-day-trade-stocks-with-less-than-25-000-1031365 If anyone other noobs were wondering. Do swing trading and enter trades that you hold for longer than one day. Swing traders capture trends that play out over days or weeks, rather than attempting to time a one-day trend that might last for 20 minutes. While this is less a loophole and more of a change in strategy, it works for traders who want to stay actively involved but don't yet have enough equity to meet the $25,000 requirement for day trading.
This means a Swing trader is not limited to one day. He can take enough time to ensure he makes profit. Source: https://www.forexchief.com/library/forex-strategy/swing-forex-strategy/ You should read the entire strategy if you can.
The only problem I could see is hitting stops too soon. Pretty sure PDT is based off settlement dates so your still looking at holding for 3 days. Don’t quote me on this. As a Canadian we don’t have this rule. We don’t even adhere to the free riding rules on U.S markets for some reason
The PDT settlement was changed last year, now down to 2 days. https://www.sec.gov/news/press-release/2017-68-0