Sbk General Trading
Marieta Reeks
If you are designated as a pattern day trader, a $25,000 minimum equity requirement must be deposited in the account prior to any day-trading activities and maintained in your account at all times. If the account falls below the $25,000 requirement, you will not be permitted to day trade until you deposit cash in the account to restore the account to the $25,000 minimum equity level.
Currently (May 2020), all Alpaca Accounts are Margin accounts and that we currently do not support cash accounts. Further, if trading were to be done in a cash account, the rules require that s/he trade on settled cash only (effectively meaning that if s/he purchased a stock and sold it today, s/he could only use the cash from the sale after the original purchase had settled at T+2).
Although it would be great to turn on the computer and leave for the day / week, automated trading systems do require monitoring or an alerting system. This is due to the potential for mechanical failures, such as connectivity issues, power losses or computer crashes, and to system quirks as mentioned above. It is also possible for an automated trading system to experience anomalies that could result in errant orders, missing orders, or duplicate orders. If the system is monitored and/or has an alerting system, these events can be identified and resolved quickly.
Your level of trading experience with automated trading systems is important in deciding how you should choose your overall trading strategy. Highly complex strategies with many variables make it more difficult to determine whether the trades that will execute are designed to be profitable. Starting with simple automation strategies will allow you to develop experience and learn methods of trading that work best for you.
Conditional orders may have increased risk as a result of their reliance on trigger processing, market data, and other internal and external systems. Such orders are not sent to the market until specified conditions are met. During that time, issues such as system outages with downstream technologies or third parties may occur. Conditional orders triggering near the market close may fail to execute that day. Furthermore, our executing partner may impose controls on conditional orders to limit erroneous trades triggering downstream orders.
Given the increased potential risk of using conditional orders, the client agrees that Alpaca Securities cannot be held responsible for losses, damages, or missed opportunity costs associated with market data problems, systems issues, and user error, among other factors. By using conditional orders, the client understands and accepts the risks outlined above. Alpaca Securities encourages leveraging the use of Paper accounts to become more comfortable with the intricacies associated with these orders.
Yes, the scenario you described would count as a pattern day trade. Pattern day trading (PDT) is a designation used by the U.S. Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) to define traders who execute four or more day trades within a rolling five-business-day period in a margin account.
Since you bought and sold the same asset on the same trading day (Tuesday), it would count as a day trade. As a result, if you repeated this pattern three more times within the same five-business-day period, you would be classified as a pattern day trader, subject to specific regulations.
1. Forget 95% of youtube, it's full of turds just trying to market courses, **** out their channel. Same with forums, no matter what topic it is (fitness, languages), a lot of people lie their asses off and pretend they are experts but in fact know jackshit about it. Even the supposedly guru's are full of sh@t. For example the guy who wrote that best seller "Trading for a living", Dr Elder. He came up with his own "impulse system" and brags about it. It just MACD and Moving average, nothing more . Aslo on their own private forum (which I was on for $60 a month) the group consistently underperform the S&P and even their best Gold start traders barely out perform it. Everytime you asked a question you got told, "buy this extra course for $100's Its the same with Anton Kreil, $15k for a course? I have no idea if he is good or not but its seems to me that it's the easiest thing in the world to prove your validity. Publish your trading accounts, get them audited by an auditor, show tax statements, do live streaming etc If I was building a business as a trainer that's what I would do.
2. Having said that there is a lot of useful information that if you look at it objectively it can be great advice. Keep a word document and write down your own points. Ignore every cherry picked chart they show you (apart from the educational content), use your own, scroll back a 500/1000 bars and then start looking at the extreme right hand bar, moving forwards bar by bar and ask yourself "ok what will I do here", you will soon find out that even if you got the direction right, spreads, commissions, trend reversed too quickly, stops etc killed it . It will paint a very different picture than what youtube baseball-wearing-cap-on-backwards hipster is telling you.
6. Risk Management is the most important concept by far in my view. The generally advice is never risk more that 1 - 2% on a trade. I personally think that is too much . I would keep it at 0.5% max until you work what you are doing. 8 losing trades in a row at 1-2% and it starts to hurt and self doubt really creeps in.
7. Demo always seems like a good idea but in reality it never worked for me. I put on trades forget about them, have no psychological connection to wins / losses. You need to use real money, even if it's just the bare minimum to see those losing . I have put on 4 trades over last few days.All 4 were up 2 x Risk but because I am a total **** I didn't cash out and all hit stops resulting in 4 losses. It was only 80 between all 4 but the fact I got greedy (yet again!) annoys me
9. The reality is that its a heck of a difficult job to make money day trading., Brokers like IG, and all the others make money by continual flow of clients coming in losing cash and eventually leave, hence the large marketing. I don't blame them, it's a business model, not a hippy self help group, but just be realistic.
11. Don't jump around from stock to stock, to FX, to crypto. I believe if you are not making money in two or three the problem is you, not the asset. They all have their own personalities, e.g. Coca cola barely moves, Tech stocks jittery as hell, respond to news, others hardly at all, so you need to spend sufficient time on see what influences what.
seems like a winner on paper but I still kept getting stopped out. Then afterwards write down what happened, e.g. after the trade exit I put screen shots of 3 time frames (daily hourly / 15min) into a PowerPoint and detailed where I went wrong. Several things became clear such as
- 2min charts was pointless, you would never make the spread back
- The risk / reward (1:2) was to high, a 1:1.2 would have paid off > 50% of the time .
- I was fannying around with stops, for no reason. etc
- I'm putting on trades because I'm retarded, e.g. long trade, on a bearish trend in larger time frame
Heck it's boring but I am starting to see patterns about the way I trade (= c@ck up). The best traders I saw in banks were the OCD ones. The wannabe Burberry wearing chavs all got pushed out or sent to Starbucks to pick up the coffee
This is an amazing post and perfect for me as I am just starting my journey - also from a banking and finance background. I posted something here earlier, but do you use a news feed? if so, which one? if not, why not and what are your thoughts?
Actually I was a quant for a long time, have a Maths PhD but my mistake before was ignoring markets and focusing purely on the numbers and theories. We strongly believed in efficient market hypothesis., the rational investor and random walk theory but in recent years I realized that people do not act rationally at all and there are opportunities to be had.
This is an amazing post and perfect for me as I am just starting my journey - also from a banking and finance background. I posted something here earlier, but do you use a news feed? if so, which one? if not, why not and what are your thoughts?
For actual day / swing trading I don't read news. I did at the start but I found the problem was that there was just so many moving parts that its was a mess, I was **** about face, jumping back and forth 2nd guessing myself all the time I majorly cocked up twice, once with Hertz and then again with wirecard. I got caught out as although there was a massive sell off and a bounce back, I bought at the wrong time and got hammered, I sold out at a 70% loss whereas if I held a few days it would have made a50% profit. I am staying out of that game for good now.
I am trying to take it from the group up, understand price action, strategies, entry exits , limits stops order types etc, Then I will take it up more by adding news feeds, deeper analysis, market sentiment and so on.
As for news specifically I think it's worth having twitter or any decent news feed, for major or catastrophic events like bankruptcy, political, company news. One must remember that every indicator we look at has some form of averaging and smoothing going in. A sudden news release and it completely trumps anything in the charts. An indicator can't react fast . In this way I prefer IB platforms TWS rather than IG (I use ProRealTime) as the software has decent news feed. IG's PRT doesn't but the problem is you can't spread bet on IB.
Here are two examples of what I do every morning, After the trade closes, the next day I take screenshots. Its quite easy once you have a Template set up in Pro real time (10min job) . The text boxes, time frames are all saved so it's just a matter of updating the text. I also make notes (a line or two) on each trade, the minute I place it and again after it closes , as I know I'll forgot quickly when I took the trade
c80f0f1006