What are the requirements to be a day trader?

Question

I read that you have to have a margin account with $25,000 in order to buy and sell multiple times per day (more than 4 buy/sells per 5 day period). Does a margin account mean you have to have a loan from a bank, and do you have to have good credit? Or can you do it all with your own cash?

What other restrictions are there for trading an average of more than once per day?

I know there are lots of rules and regs. Just a short concise list of the basic reqs is all I'm looking for.

Answer 1

There is no outright requirement to be a day trader.

Generally, you need to trade on margin. it is not really the same as margin generally.

Margin is taking a loan from a stock broker to buy more securities.

With day trading, you are borrowing money from your broker because the cash you receive from a trade takes a few days to clear.

The current market exists on a T+3 system it can take up to 3 days fro money and shares to actually change hands.

So to continue to trade on money you do not yet have, youborrow it. Unlike regular margin, there is not the same degree of risk invivled with normal margin purchases.

Some brokers let you do this without a margin accont because their getting the money is a sure thing and they still profit off of you from the commissions.

Answer 2

In stock trading (specifically day trading) you do usually trade on a margin account. there are some brokers that will let you have up to 2:1 Margin and some that will even let you day trade with less than 25k but 25k seems to be the magic number for most of them.

Have you considered trading in FOREX (international currency exchange)?

With Stock trading with $25000 to start with, you can trade on one stock out of 10,000 possible choices and if it goes up by pennies you make a little money but you pay trade commissions.

In forex, with only $250.00 you trade $25,000 worth of currency and only 5 major currency pairs to choose from and no trading commissions. I would recommend a minimum of about $1k-$5K to start with though realistically. I would also spend the first 4 months "demo" trading. IE not using real money. there are several forex brokers that will let you open a demo account for 30 days at a time to try out their platforms and "learn" how to trade.

I am making about 20% per month trading forex. There is even software available that handles all the trades for you and allows you to profit even when you are not there. Best part is you can try it free for a month without risking a cent of your own money.

For more information go to www.huttoinvestmentgroup.com and check it out.

Answer 3

Margin means you're borrowing the money against the stock value you have in your account and using it as collateral. Meaning, if your account falls below the required margin percentage, you'll get a call from the broker to deposit more money or they'll sell your positions to meet the margin maintenance requirement. Remember, you also need to pay interest on the margin (borrowed money). Check out http://ibooyah.com for your investment matters.

Answer 4

You don't need good credit. They don't even check your credit.

If you open a brokerage account with at least $25,000.00 USD then you are smarter than the rest and you get a $100,000.00 USD credit line automatically.

Most people earn less than $25,000.00 in a year.

It's not illegal to get a $25,000.00 USD loan from a bank and then use that money to become a daytrader.

However, if you don't even have at least a $25,000.00 USD car (Paid in full) and a $75,000.00 USD house (Paid in full) then you should not daytrade.

You are supposed to risk and maybe lose your own money.

90% of new daytraders lose all their money in less than a year.

If you have at least a decade of experience in the Stock Market then you will be fine but if you are just getting started daytrading is not for you.

You can trade 1000 times per day if you want. (If you have at least $25,000.00 USD)

Answer 5

when i was 18 i started trading penny stocks, like 4 buys/sells per day. and I used all my own cash to do it. I didn't have to have a certain amount in the bank or anything like that.
good luck but if i were you, i'd stay away from penny stocks

Answer 6

To start, get educated and then start with a few pretend trades.
Start with $5000 in a trading account and then play the game.

Answer 7

Hi,

Open oline account and trade as much as you like.

I could introduce you to one brokerage company in Austria that allows to trade online from same account currency (forex), commodities, metals and cfd on shares. Total 500 instruments available; spread for currency pairs from 1 pip for shares from 5 pip. Commission for cfd from 0.15%; rollover – 0 USD. Very small initial deposit required – just from $150. Terminal: MetaTrader 4 with free charts and many technical indicators.
If you open trading account under my referral I provide you for free with trading techniques that I successfully use for several years.

If you are interesting and/or have any question please pm or e-mail me (press on my name) and I provide you with further information.

Good luck!