Securities and Exchange Commission, is a trader who executes at least
four day trades within five business days. These day trades should be
more than six percent of the client's total trading activity for the
same five-day period for the trader to be called a pattern day stock
trader.
Because of the numerous activities, pattern day traders are relatively
more exposed to intraday and day trading risks. Consequently, these
traders are made subject to specific rules and restrictions. One of
these rules is maintaining a minimum of $25,000 equity balance in a
margin account. If the day trader's account falls below the required
minimum, he or she needs to restore the required amount through cash
deposits or marginable equities within five days of going below the
requirement.
Pattern day trading is considered a very risky style of market
trading. Because of this, the Securities and Exchange Commission has
established numerous rules to address intraday risks. One of these
rules requires that a trader's maintenance margin be deposited in
customer accounts in amounts enough to support the risks associated
with day trading. Moreover, if the minimum amount required is not met,
the day trading power of the trader will be frozen for 90 days or
until the minimum equity required is re-established.
There have been arguments from various sectors of the market that the
establishment of these rules hinders the basic philosophy of a free
market. Some have also asserted that the rules actually enhance the
risks faced by a day trader, particularly in situations when the
unexpected decrease in equity price occurs.
Despite the risks and stringent rules to day trading, a lot of traders
are drawn into the profession because of the alleged potential profit
that can be made from it. A lot of people, particularly those who are
not so adept in stock trading, have the impression that day trading is
a quick way to make a lot of money. However, market analysts have
warned that this isn't so, and some of them even argued that the risks
do not justify whatever potential benefit can be gained from day
trading.
Being a pattern day trader has its advantages and disadvantages. The
debate on whether this is a profitable endeavor is still on-going. One
thing is for sure, though, day trading should not be chosen as a
profession unless a trader has thoroughly studied the market and
weighed the pros and cons of this practice.
The Big 3 Of Profitable Trading And Simply No Way To Fail: http://eminits.key.to/
--~--~---------~--~----~------------~-------~--~----~
You received this message because you are subscribed to the Google Groups "Forex Lane: Learn, News Charts Calendars" group.
To post to this group, send email to forex-lane-learn-news-charts-calendars@googlegroups.com
To unsubscribe from this group, send email to forex-lane-learn-news-charts-calendars+unsubscribe@googlegroups.com
For more options, visit this group at http://groups.google.co.za/group/forex-lane-learn-news-charts-calendars?hl=en
-~----------~----~----~----~------~----~------~--~---
ليست هناك تعليقات:
إرسال تعليق
كن إيجابيا وشارك برأيك لا تقرأ وترحل
تقييمك للمواضيع يساعدنا على معرفة مدى توفقنا فى اختيار المحتوى المناسب لك وتعليقاتك تطلعنا على رأيك وانطباعك واحتياجاتك مما يساعدنا على تلبيتها.
شرف لنا أن تحمل صفحاتنا كلماتك.
تفضل بالتعليق: