Glossary / Risk
Pattern day trader rule
Definition
A US rule requiring $25,000 equity for accounts making four or more day trades in five business days.
Why it matters
It applies to margin accounts at US brokers. Cash accounts, futures and offshore brokers fall outside it, with their own trade-offs.
Example
Four day trades in five business days on a $12,000 cash-margin account freezes day trading for 90 days - which is why many US traders move to futures.
How to track it in a journal
TradeStack calculates the core performance numbers — win rate, average win and loss, profit factor, expectancy, drawdown and consistency — automatically from imported trades, so pattern day trader rule stops being something you estimate and becomes something you read.
Related terms
R multiple
A trade result expressed as a multiple of the amount you risked.
Risk-reward ratio
The size of your planned target compared with the size of your stop.
Position sizing
Choosing how many shares, contracts or lots to trade based on your stop distance and risk budget.
Drawdown
The decline from a peak in your equity curve to the following trough.
Questions that use this term
Keep reading
Trading journal guides
Expectancy, profit factor, drawdown, backtesting and the PDT rule.
Free trading calculators
Position size, risk-reward, expectancy and options profit.
Expectancy calculator
Expected profit per trade from your own numbers.
Broker CSV export guides
Step-by-step exports for Tradovate, NinjaTrader, IBKR and more.
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