The PDT rule explained
In a US margin account, four or more day trades inside five business days makes you a pattern day trader, and you must keep $25,000 in equity. Cash accounts, futures and most non-US brokers are not covered by the rule.
What counts as a day trade
Opening and closing the same security on the same trading day in the same account. Scaling out counts as one day trade if the open and close both happen that day.
The threshold
Four or more day trades within any five business days, in a margin account, and those trades make up more than 6% of your total trading activity in that window. Cross it and your broker flags the account as a pattern day trader.
What happens if you are flagged
You must maintain $25,000 in account equity. Drop below it and the broker restricts you to closing trades until you deposit or the flag is lifted, which many brokers allow once per account as a one-time reset.
Legal ways around it
Trade a cash account and accept T+1 settlement, trade futures or forex where the rule does not apply, use a prop firm evaluation account, or hold positions overnight so they are not day trades.
Why journaling matters more under PDT
With three trades per week you cannot learn by volume. Every trade has to be reviewed. Log each one with a setup tag and check expectancy per setup so a small sample still teaches you something.
Frequently asked
Does the PDT rule apply to futures?
No. The rule applies to margin accounts trading stocks and options with US brokers. Futures accounts are governed by margin requirements instead.
Does the PDT rule apply to cash accounts?
No, but settlement does. In a cash account you can only trade with settled funds, which limits how often you can recycle the same money.
Can the PDT flag be removed?
Most US brokers grant a one-time reset per account. After that you need $25,000 in equity to keep day trading in a margin account.
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