But the same thing can be done with a $30K account just as easily. So I don't know if the conspiracy theory holds up all that much. More than likely it was congress's reactionary response to the frenzied losses sustained by stock daytraders who made easy money during a bull market but never learned to trade a bear market and got killed. And the rule is effectively is a stop loss. For those with account greater than $25K, they would want to manage their trading such that they don't fall below and enter into the PDT category. And those with less than the $25k required would want to adjust their trading strategy (ie swing trade) to avoid the trading ban that most brokers place on you if you're flagged as a PDT.
But that's not effectively a stop loss. If anything, it's the opposite. One of my worst trading losses came when I bought a position near the close, intending to hold overnight. Then I saw the position move against me dramatically after-hours. I couldn't get out because of the PDT. I ended up taking a much larger loss than I would've ever allowed myself if I had been able to exit freely.
pdt rule should be eliminated. just because you can afford to have 25k in an account, does not mean u have any clue how to trade and manage risk.
But that's, no offense, your own fault since you failed to monitor and properly anticipate what would trigger the PDT flag. Had you had done your due diligence, you wouldn't have entered the trade to begin with.
You can't come 5 hours late to a party and not expect to look like an idiot. There's no exception with your post either
It's not about that really. It's partly about disposable income and the lack thereof. Ask yourself this question. Why does the PDT only apply to stocks and stock options? Do you remember the media induced public outcry back then in 2000 about daytraders and their effect on the stock market which lead to the rule enactment in 2001?
Why do you need to insult everyone who doesn't agree with you? You look kind of silly arguing about the lack of merit of PDT rule when there are alternatives. And if you are as savvy as you portend, you'd move into those markets and never look back. Real professionals adapt.
Ummm, no, the entire reason I entered the trade right before the close was because I was planning on holding overnight. I had a rule to never enter trades in the middle of the day when I was out of day trades. So, yes, I had done my "due diligence".
Then how did you trigger the PDT? Surely you must have known that in the event that you needed to get out of the trade sooner rather than later (reg-t settlement) you would stand to trigger the PDT. It appears that you had already done 2 round trip trades in less than 5 days. Putting on one more trade without factoring in the need to possibly exit immediately would trigger the PDT, is not what I would call due diligence. Unless there is something missing in your example.
I didn't trigger the PDT. My point was I couldn't exit without triggering it. The stock had showed a trend of closing strongly and gapping up the next day. It was closing strongly so I bought it right before the close. The entire intent was a swing trade. However, there was unanticipated news after hours, and the stock ended up gapping down rather than up the next day. I couldn't get out the same day upon the news and had to eat a bigger loss the next morning. My whole point is to show that swing trades don't act as stop losses. Because stocks can gap up or down significantly on unexpected news, a swing trade is, in some ways, inherently more risky than a day trade.