What is pattern day trading? Why might you be blocked from it? 🤔
Before we dive into these questions, we must understand what day trading is
Day trading is when you buy and sell, or sell and buy the same stock on the same day ⚡
So if you buy Apple stock and sell it on the same day, that’s one day trade 🗓️
Now that you know what a day trade is, we can learn what pattern day trading (PDT) is 🧠
PDT is when you perform more than 4 day trades in 5 business days 😡
In the US, you cannot perform Pattern Day Trading unless you have an account with more than $25K in balance 🔐
This is the law set by regulators
Generally, we advise you to avoid hitting the pattern day trading limits 😇
If you are day trading, you are engaging in risky behavior instead of investing based on a long term view and value 👿
Choose an option
A long-term investing strategy
A risky and often illegal trading strategy
A safe way to increase profits
Trading strategy that requires patience and discipline
To protect investors
To increase profits
To encourage long-term investing
To prevent traders from getting banned
It is illegal in most cases
It is very risky and often leads to losses
It is not profitable, as many day traders lose money each quarter
All of the above