Rules for new traders
The first steps to take when decided to day trade is understanding the most important rules to protect yourself. Please read through the OCC rules and descriptions of risks associated with trading options. https://www.theocc.com/getmedia/a151a9ae-d784-4a15-bdeb-23a029f50b70/riskstoc.pdf; https://www.theocc.com/Company-Information/Documents-and-Archives/Options-Disclosure-Document Please reach out to a professionally licensed investment advisor or broker for more clarity. Our Personal Golden Rules to Protect Ourselves on Our Trades: 1. For our stock market brokerage accounts under $25,000, we cannot day trade more than 3 times in a 5 day rolling period. This means if we make 3 day trades on Friday, we will have to wait until next Friday to make another day trade. After our 3rd day trade in a 5 day rolling period, our account will be flagged as a pattern day trader, and our account may be locked out of day trading for 90 days. 2. When entering into a trade, placing limit orders are the best way to have a trade executed at the trade price we prefer. Although the trade may not get executed as a limit order, it is a way to protect ourself from receiving a different price that may occur when placing a market order. 3. When entering a trade, placing a stop loss is always a smart move. If a day trade does not go in the direction we planned, it is a smart rule of thumb to exit the position to avoid losing more money. Placing a stop loss order helps avoid potentially more loss on a trade that moves in the opposite direction our projected trend.