Best way to day trade with under $25,000

External question — Personal Finance Stack Exchange Author: Frobot Original post: https://money.stackexchange.com/questions/64128 License: CC BY-SA 3.0 — https://creativecommons.org/licenses/by-sa/3.0/ Adaptation: HTML converted to plain text; contact email addresses removed. I recently learned that the pattern day trader rule will keep me from day trading stocks because I have less than $25,000. I found out it only applies to margin accounts so I figured I'd be fine just using a cash account. Then I find out the T+3 rule for cash accounts which seems to imply that I still can't day trade the way I want (roughly 10 trades 5 days a week). Then I read that a buying order also takes 3 days to settle, so you can buy stock using unsettled cash because by the time the buy has been settled the money from the last sell will be settled. I'm not sure I really understand this though. I also looked at forex trading, but it seems way too unpredictable and I read too much about corruption in it. It also sounded like a great way to lose all my money. Another option is trading in a prop firm, but I have little understanding of how this works and there seems to be so many options. I really want to stay as independent as I can though, unless this is the best option I have. To sum up, if I have $10k and strictly want to day trade (I am good at seeing small scale patterns but not very good at figuring out long term trends) what would be the best way to go about it? And if anyone could explain if this T+3 rule would actually affect me or not that would be great.

External answer — Personal Finance Stack Exchange Author: not-nick Original post: https://money.stackexchange.com/a/64130 License: CC BY-SA 3.0 — https://creativecommons.org/licenses/by-sa/3.0/ Adaptation: HTML converted to plain text; contact email addresses removed. The T+3 "rule" relates only to accounting and not to trading. It does not prevent you from day trading. It simply means that the postings in you cash account will not appear until three business days after you have executed a trade. When you execute a trade and the order has been filled, you have all of the information you need to know the cash amounts that will hit your account three business days later. In a cash account, cash postings that arise from trading are treated as unsettled (for three days), but this does not mean that these funds are available for further trading. If you have $25,000 in your account on day 1, this does not mean that you will be able to trade more than $25,000 because your cash account has not yet been debited. Most cash accounts will include an item detailing "Cash available for trading". This will net out any unsettled business transacted. For example, if you have a cash account balance of $25,000 on day one, and on the same day you purchase $10,000 worth of shares, then pending settlement in your cash account you will only have $15,000 "Cash available for trading". Similarly, if you have a cash balance of $25,000 on day one, and on the same day you "day trade", purchasing $15,000 and selling $10,000 worth of shares, then you will have the net of $20,000 "Cash available for trading" ($20,000 = $25,000 - $15,000 + $10,000). If by "prop account" you mean an account where you give discretion to a broker to trade on your behalf, then I think the issues of accounting will be the least of your worries. You will need to be worried about not being fleeced out of your hard earned savings by someone far more interested in lining their own pockets than making money for you.

External answer — Personal Finance Stack Exchange Author: sharpshorts Original post: https://money.stackexchange.com/a/78057 License: CC BY-SA 3.0 — https://creativecommons.org/licenses/by-sa/3.0/ Adaptation: HTML converted to plain text; contact email addresses removed. You avoid pattern day trader status by trading e-mini futures through a futures broker. The PDT rules do not apply in the futures markets. Some of the markets that are available include representatives covering the major indices i.e the YM (DJIA), ES (S&P 500) and NQ (Nasdaq 100) and many more markets. You can take as many round-turn trades as you care to...as many or as few times a day as you like. E-mini futures contracts trade in sessions with "transition" times between sessions. -- Sessions begin Sunday evenings at 6 PM EST and are open through Monday evening at 5 PM EST...The next session begins at 6 pm Monday night running through Tuesday at 5 PM EST...etc...until Friday's session close at 5 PM EST. Just as with stocks, you can either buy first then sell (open and close a position) or short-sell (sell first then cover by buying). You profit (or lose) on a round turn trade in the same manor as you would if trading stocks, options, ETFs etc. The e-mini futures are different than the main futures markets that you may have seen traders working in the "pits" in Chicago...E-mini futures are totally electronic (no floor traders) and do not involve any potential delivery of the 'product'...They just require the closing of positions to end a transaction. A main difference is you need to maintain very little cash in your account in order to trade...$1000 or less per trade, per e-mini contract ...You can trade just 1 contract at a time or as many contracts as you have the cash in your account to cover. "Settlement" is immediate upon closing out any position that you may have put on...No waiting for clearing before your next trade. If you want to hold an e-mini contract position over 2 or more sessions, you need to have about $5000 per contract in your account to cover the minimum margin requirement that comes into play during the transition between sessions... With the e-minis you are speculating on gaining from the difference between when you 'put-on' and "close-out" a position in order to profit. For example, if you think the DJIA is about to rise 20 points, you can buy 1 contract. If you were correct in your assessment and sold your contract after the e-mini rose 20 points, you profited $100. (For the DJIA e-mini, each 1 point 'tick' is valued at $5.00)

External answer — Personal Finance Stack Exchange Author: NuWin Original post: https://money.stackexchange.com/a/78130 License: CC BY-SA 3.0 — https://creativecommons.org/licenses/by-sa/3.0/ Adaptation: HTML converted to plain text; contact email addresses removed. One way a lot of people bypass the pattern trading equity requirement is to open multiple brokerage accounts. You have $10k, put $5k in one and $5k in another. Although I don't recommend it!