Yuck - Pattern Day Trader? Your Account has qualified as a Pattern Day Trader Etrade has just added this restriction to my account. I'm just playing around with a $10,000 account and the Hershey method. I don't have $25k to keep in an account. Is there any way around this. With the Hershey method of selling at end of day if not reaching FRV, it seems this would happen quite often.
I would stay away from Etrade all together. I am not sure if their is any way around the restriction of daytrading. I have both an mbtrading and IB account. Here is a link regarding mine and others experiences with etrade. Be wary of your security. http://www.elitetrader.com/vb/showthread.php?s=&threadid=50700&highlight=etrade+fruad
PDT applies to everyone and all brokerages you are allowed 3 intra-day TURN trades PER 5 day period if you have less than 25k in your account obviously what this means is that you will probably hold some trades overnight that didn't make it to FRV by EOD. i don't think it's a SERIOUS problem.
As others have noted, you should place 'finding an alternative broker' as your top priority. The commission savings alone should improve your profitability. Many traders (documented on this web site) have had 'less than favorable' experiences with ETrade within the last year. Moving your account to a more reputable Brokerage Firm makes very good sense. With respect to reducing the number of trades enabling you to steer clear of the PDT Rules, I suggest using Average Dry Up Volume as your entry trigger, rather than, low Band Dry Up Volume. Using Average Dry Up Volume creates fewer trade signals overall, but still provides you the opportunity to enter into a trade early enough into a price run to extract profit. Also, you could trade using channels in an effort to avoid the FRV hold rule. In other words, hold at EOD if price maintains its position within the price channel and volume increases above a 10% gain. Hope that helps. - Spydertrader
When I first started to learn these methods, I cannot count the number of times I thought, "How the hell does Jack do that!" I soon realized how Jack could do the things he does, without knowing how he did them. Jack trades equities at a much higher skill level than what Journal One describes. Jack's "second derivative" of volume tells him when to enter into a trade, and he uses price as the confirming indicator. Scoring tells him where in the stocks natural cycle he finds himself, and where he can anticipate price moving next. At "the beginner level" of The Hershey Methodology, using the tools, indicators and methods (outlined in Journal One) provides a trader learning these methods with a skill set in an effort to create positive reinforcement and build equity. With the use of channel trend lines, additional 'rate of change' monitoring and the tools Jack outlines in his recent posts, a beginning trader hopes to transition through the intermediate and expert levels. The journey itself provides most of the answers we seek. Until a trader can know for themselves (through observation and experience) that which Jack finds intuitive, questions will outnumber answers. As experience and screen time increases (as we continue this journey) the disparity between questions and answers transitions. What once made no sense, now appears with perfect clarity. I recommend reviewing your Final Universe Stocks each night to see what patterns (if any) exist. Begin with a daily chart for each. What clues exist suggesting a run up in price might occur the following day. Notice the patterns price and volume make prior to a significant price increase. Determine where a good entry might reside, and anticipate where price might head from there. Do this in addition to the "Beginner Method" Dry Up --> FRV --> Peak paradigm. Such is the way we begin to transition from beginner and improve, not only our trading, but also, our profits. Hope that helped. - Spydertrader
This Journal, and its predecessor, are very interesting threads. On the surface it seems like a rare example of a profitable method fully disclosed on a public form. However, the usual key questions arise: is the success repeatable... is the method transferable to other traders? Besides Spydertrader (who we see is successful with it) what sort of profitability are the rest of you experiencing. Are you on track, pro rata, to achieve 100% ROI per year, as described last year? Are you roughly breakeven so far...are you losing money with it... Interested in your thoughts. Feel free to send me a PM if you would prefer. I suspect the group of people actually putting this method to work would benefit from knowing how their fellow practitioners are doing.
If I close out my positions right now, I will be up about 20% for the month. Spyders stuff works. I also think HANS is setting up to be a possible buy as Spyder has said. I got into GIVN this morning after selling SIRF. lets see what happens. Volume may be on the lower side.
Thanks everyone for the daytrader info. I've looked at getting away from Etrade before but could never find anything else I liked (as far as a trading platform).
You might look into integrating a charting platform directly with a brokerage firm. For example, I have QCharts integrated with my broker's order entry. Basically, I have 8 or 10 charts up with several Level II screens (in addition to a quote sheet and 'positions' window). At the bottom of each Level II window, I have order entry attached. You can achieve the same functionality using Medved's Quotetracker Software. Integrating charting with order entry might permit you to use a discount broker (like MBTrading) and enjoy the significant commission savings resulting from transferring your account while maintaining the 'positives' you experienced with E*Trade. - Spydertrader Full Disclosure: I currently hold a Trading Account through MBTrading and have remained a QCharts Client since last year. I have used Medved's Quotetracker Software in the past and found it useful.