Hi! I am somewhat new to trading. I have casually invested before but recently (with more time now) I have made it a priority to learn as much as I can. I read, watch, listen, ect but the best way I have found to learn is by doing and making a few mistakes. I am primarily swing trading (I believe). Here is my question, most of the trades I sell, I sell after holding them for a week or two. From time to time I sell them the next day because either it didn't move at all, ig jumped up and I want out and to put the money elsewhere, or a trial stop limit sale executed. As I start reading, I see things that say I have to hold the security for two days or its a violation, is this true? There are times where I dip into the margin but it settles back. Sorry for the what I am sure is an amateur question/concern.
If you buy and sell a security on the same day more than 4 times (other stocks included) in a 5 day period, american brokerage firms will consider you a pattern day trader and may suspend your account for 90 days unless you have more than $25,000 in equity. Selling on the next day does not count against this limit. Also no margin is needed as any cash trades will count against this limit if bought and sold on a single day. I believe there are non US accounts that don't have this restriction, such as a Canadian or offshore accounts, but I would be concerned about the safety of these companies. I think this rule is ridiculous. I don't see any reason how liquidating a position on the same day would be financially unsound to your account and I think making you hold it overnight, especially if it is moving against you, provides any type of protection for the smaller traders. Of course the large accounts have been exempted from this restriction.
