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Penny Stock Basics

What is Pattern Day Trader Rule + Tips for Traders

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Written by Timothy Sykes
Updated 5/14/2020 20 min read

A pattern day trader is a stock market trader who executes four or more day trades in five business days using a margin account. That last part is key: in a margin account. Under the FINRA rules, pattern day traders must maintain at least $25,000 in their trading accounts.

The pattern day trader (PDT) rule is extremely misunderstood. I get questions about it a lot. Do you really need $25,000 to day trade?

That’s a ton of money, right? I didn’t start my trading journey with that much … I had about half that.

So, what’s a day trader to do?

First, don’t make assumptions. Yes, the pattern day trader rule is real, but I think it’s actually a good thing.

New to penny stocks? You can start by studying my free penny stock guide.

Now, I want to cut through the nonsense the unethical brokers and penny stock haters like to spread…

First, there’s the claim that you can’t short sell penny stocks (yes, you can — you just need the right broker to buy stocks). Then there’s the myth that you need to trade all day every day to get rich (nope, that’s how you make your broker rich). Or there’s that PDT rumor … this one says you need $25,000 to trade stocks.

None of these claims are true. So, from now on, I’ll forward this post to anyone who spreads those lies. And everyone (from Shaquille O’Neal to Justin Bieber) knows I’ll do it.

Let’s get into the pattern day trader rule (PDT) and what it means for your trading.

What Is a Pattern Day Trader?

tim sykes and kyle williams on laptops
© Millionaire Media, LLC

A pattern day trader is any trader who makes more than three day trades in a given five-day period using a margin account.

Pattern day traders must follow a specific rule (PDT Rule) — they must maintain at least $25,000 in their trading accounts.

If you make more than three day trades and end up with less than $25K, there are consequences. More on that in a bit.

What Is the PDT Pattern Day Trader Rule?

Under the FINRA rules, a trader must maintain a minimum account balance of $25,000 on any day that the customer day trades. The required minimum must be in the trader’s account by the closing bell (4 p.m. Eastern) the day the trader makes fourth day trade.

So, yes, you need $25,000 for “day trading activities.But that’s only if you fit the definition of a pattern day trader.

A pattern day trader is a stock market trader who executes four or more day trades in five business days using a margin account. That last part is key: in a margin account.

As for the $25K, the confusion comes from the U.S. regulators who instituted the much-maligned rule.

First, understand that brokers want you to trade all the time. That’s how they make money — when you trade. And to ‘freely’ trade all the time, you need $25,000.

But I don’t think you should listen to what your broker says. You can start with a small account. My top student Tim Grittani started with just $1,500 in his trading account. Now he’s up well over $11 million in trading profits — and still going.**

(**These results are NOT typical. Roughly 90% of traders lose. Always remember trading is risky, and never risk more than you can afford.)

Margin Account vs. Cash Account

Before I go further, you need to understand what a margin account is.

In a margin account, all your cash is available to trade without delay. That means if you exit a position at 10:30 a.m., that money is available to enter a new position at 10:31 a.m.

Margin accounts offer leverage. That’s basically a loan to increase your buying power — which can be very dangerous. I don’t recommend anyone trade with leverage.

Now, if you want to short sell, you’ll need a margin account. Personally, I think it’s better for new traders to go long first. Shorting is risky. Gain some serious market experience before you try it. Otherwise, you can get stuck in a short squeeze. You can blow up your account and even up owing money.

Back to margin accounts … They’re subject to the PDT rule.

With a cash account, it takes your cash two days to settle after trading. If you exit a trade at 10:30 a.m. on Monday, that cash will be available for trading first thing Wednesday morning.

With cash accounts, there’s no leverage, no short selling, and, most notably, no PDT rule.

Day Trading Requirements

To place a day trade, the only real requirement is that you have a brokerage account with some money in it.

A day trade means you buy and sell (or short and cover) a position on the same calendar day.

Anyone can make a day trade. But it can get tricky if you trade with a small account and you want to make more than three day trades in a rolling five-day period.

Pattern Day Trade Rule

Again, I think the PDT rule is a good thing. The PDT rule is designed to help new traders. Over time I’ve come to embrace it. Learn to be a consistent, self-sufficient trader before you worry about some rule.

What Happens If You Break the PDT Pattern Day Trader Rule?

The rule includes a lot of limitations…

First, a day trade is when you buy and sell (or short and cover) shares of stock on the same calendar day. That includes trading premarket and after-hours.

But if you hold your position overnight, the transaction is no longer considered a day trade.

The PDT rule does NOT limit you from making more than three trades per week. You can hold a stock overnight every night. Margin accounts are limited on intraday trading.

Second, four trades per week can be a LOT. I encourage my students to focus on the best setups. Those don’t always come around a lot unless we’re in a volatile market like now. Even then, if you’re a newbie, more than three trades per week can be a lot.

So what happens if you break the PDT rule? Your account is subject to a margin call.

You’ll need to deposit enough cash to get your account over the $25K limit. If you don’t, your account will be restricted for 90 days. Some brokers may allow you to hold overnight positions, while others won’t allow you to trade at all.

Remember, the rule only applies if you’re using a margin account. If you’re using a cash account, you don’t need to worry about the rule.

Day Trade Limit: Minimum Equity of $25,000

Let’s say you open a margin account and intend to make four or more intraday trades in a week. I caution you against it, but many traders ignore me.

In this case, you’ll need to maintain a minimum balance of $25,000 in your account to stay compliant with the PDT rule.

Warning: most brokerages will push you toward a margin account when you make your initial deposit. I highly recommend you start with a cash account. New traders should avoid shorting and leverage. Keep it simple in the beginning — there’s so much to learn.

Get a solid start on your trading education before you make a single trade — read “The Complete Penny Stock Course” by my student Jamil. (I wrote the forward.)

Day Trading Rules Under $25K

If you have an account with less than $25,000 in it, you can still day trade…

Yep, using a cash account. You’re not using leverage and your activity doesn’t fall under the rule. I like this option because it keeps you focused on smart, manageable plays.

I’ve got more ways to trade with a small account at the end of this post.

Example of Pattern Day Trading

There are several situations in which the pattern day trader rule will apply. Let’s explore one…

Let’s say you open a margin account with a broker and deposit $10,000.

  • On the first day, a Monday, you buy and sell shares of AAPL. This is a one-day trade.
  • On Tuesday, you buy and sell AAPL. And on Wednesday, you short TSLA. These count as your second and third day trades.
  • Thursday comes around, and you buy and sell shares of AAPL again. This is your fourth day trade.

That’s four day trades in four days — you meet the criteria of a pattern day trader.

In this scenario, you need to get your account up to $25K to abide by the FINRA guidelines. Otherwise, your margin account will be suspended.

My Tips for Following the Pattern Day Trader Rule

Not gonna lie … I used to hate this rule. Over time, though, I’ve embraced it.

I get it. It’s tough to watch the market sometimes and not trade. If that’s you, I encourage you to study. Practice restraint … You won’t last long in the market without self-control.

I trade like a retired trader, and I only come out of retirement for the very best plays. You should do the same. Wait for the perfect setup and then strike.

Got it?

Let’s look at some of my best tips for new traders:

1. Don’t Use Leverage

Using leverage can be a quick way to lose all your money.

If you don’t open a margin account at all, you don’t have to worry about the PDT rule. Instead, use a cash account and focus on only the best setups.

2. Don’t Make More Than Three Day Trades a Week (Especially If You’re a Newbie)

This is a smart rule period. It’s easy to overtrade. I know because I tend to overtrade.

Don’t force trades. Don’t chase. And don’t ‘revenge’ trade. Wait for the right setups and trade like a sniper. And if a trade goes against you, get out. Cut your losses quicklythat’s rule #1.

3. Focus on the 80/20 Rule

In the stock market, this rule means that about 80% of your profits ideally come from 20% of your trades.

Does that scare you? It should. Again, learn to trade only the best setups for your strategy.

4. Set Strict Goals

If you don’t have goals, you won’t have anything to work toward. Think about what you want to accomplish through day trading.

Before you pull the trigger on any trade, ask yourself if you’re willing to put your goal on the line for this trade. If the answer’s no, stop and reassess. It’s OK to not trade. Another setup will always come along.

5. Be Prepared for the Stock Market

Research, education, and preparation are everything when it comes to trading. If you’re unfamiliar with the stock market, start by building your knowledge account.

I provide a lot of info on penny stocks right here on this blog. I release new YouTube videos nearly every day. You have tons of opportunities to learn. No excuses.

6. Only Trade One Timeframe

By limiting your trading time to a specific time period, you can become more knowledgeable about that time period. Learn more about the top times to trade here.

I think it’s smart for new traders to focus on the open. Then spend midday studying if you have the time. And at the close, you can look for overnight plays since they don’t count as day trades.

If you’re trading a margin account with less than $25,000, focus on either the open or the close until you grow your account.

7. Journal Your Trades

Throughout your trading career, it’s important to note what works and what doesn’t. Use Profit.ly to journal your trades. It’s how you can track your progress over time.

Use this data to focus on the trades that work.

8. Don’t Follow Trade Alerts

Never follow trade alerts from anyone, not even me. I send out watchlists and alerts to help my students learn my process.

But ultimately, you need to develop your own trading plan. You need to know when you will enter a trade and where to set profit goals or cut losses. Remember small losses are fine and small gains add up.

My trade alerts are designed for you to see my trades in real time. I’m teaching the process.

9. Prepare a Watchlist

Start by signing up for my free weekly watchlist. Every week, I’ll tell you what I’m watching in the market.

A watchlist helps you find and track a few stocks that meet your basic criteria. It helps you limit chaos throughout the trading day by allowing you to focus on a few promising stocks.

Is Day Trading Illegal?

There’s nothing illegal about day trading. Day trading simply refers to the practice of opening and closing a trade on the same day. That’s it.

Day Trading Laws

Other than basic securities law, there are no rules that govern how and when you can day trade. If you’re using a cash account, you can execute 20 trades per day. I don’t recommend it, but you have that right.

Is It Bad to Be a Pattern Day Trader?

By definition I’m a pattern day trader. I typically have five to ten day trades each week. It’s my preferred trading style.

So no, being a pattern day trader is not bad. I actually think it’s good. And trading penny stocks has allowed me to start with a small account and earn over $5 million in trading profits.**

You can read about my trading journey in “An American Hedge Fund” — it’s my free autobiography. Get your copy here.

(Please note: my results are not typical. I’ve spent years developing exceptional skills and knowledge. Always remember trading is risky. Never risk more than you can afford.)

Frequently Asked Questions About the PDT Rule

I get a lot of questions about the pattern day trader rule. I’ll answer them here so you can refer back as often as you need.

Does the Pattern Day Trader Rule Affect Short Sales?

Yep, the PDT rule applies to short selling, too. Going long or short a trade on the same day counts as a day trade.

Does the PDT Rule Apply to Day Trading Options?

Yes. If you open and close your position on the same day, it counts as a day trade.

Does The PDT Rule Apply Only If I Use Leverage?

No, you don’t need to use leverage to be subject to the PDT rule. If you have a margin account — regardless of whether you use leverage — you’re subject to the PDT rule.

What Happens If you Break the Pattern Day Trader Rule on Robinhood?

I don’t do customer support, so you’d need to contact Robinhood for that information. Every broker is different. Some may give you a warning the first time you break the rule. But if you break the PDT rule a second time, you can probably expect your broker to freeze your account. Again, check with your broker. And always know how many day trades you have left. Know and understand the rules of the game. Don’t let a small mistake blow up your entire account.

Is There a Workaround for the Pattern Day Trade Rule?

There are several workarounds for the PDT rule. Let’s take a look…

Cash Account

Should seem pretty obvious by now … but I recommend using a cash account. Stay away from using leverage.

Use Multiple Brokerages

The PDT rule is enforced by brokers, not regulators. If you trade with multiple brokers, each will allow you three day trades. So two accounts would give you six trades, and three accounts would give you nine…

But this spreads your funds thinner. Focus on proper money management. You can get around the PDT rule, but you’re missing the big picture. Your education and the process come first.

Trade Like a Sniper

Don’t chase every single pattern out there. Choose your trades wisely and wait for the perfect setup. If there’s a hot sector, like with coronavirus stocks, you can see a lot of opportunities. But usually, the best trades only come along a few times a week.

Offshore Brokerages

I don’t recommend anyone use offshore brokers. Period.

Bonus Tip: The Trading Challenge

I promised 10 tips. So here’s the last and best tip I can ever offer: get a trading mentor.

Apply for my Trading Challenge. I only want dedicated and committed students. It’s your opportunity to learn from me and my top students.

You can see the trades I make every day and learn why. Plus, you’ll have access to thousands of premium resources, from daily watchlists to live trading webinars.

My goal is to be the teacher to you that I didn’t have when I was learning. I can help you shorten your learning curve — if you’re willing to put in the hard work and study.

The Bottom Line About the PDT Rule

Day trading is one of the most exciting ways to make money in the world, and it comes with few restrictions. The pattern day trader (PDT) rule is the only regulation you need to worry about — and only if you’re using a margin account.

To learn the best day trading strategies and build your skills using proven methods, join my Trading Challenge. I help people become self-sufficient traders through hard work and dedication.

Like it or not the PDT rule is here to stay. The next choice is yours to make. Be defeated by this obstacle because this rule is unfair or overcome it and trade smarter.

I want to hear what you think … What do you think of the PDT rule? Leave a comment below!

How much has this post helped you?

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Comments (99)
WenJul. 20, 2021 at 12:17 am

Tim, always concerned about cash accounts because ofthe reg T and good faith violation rules. What should we do and how should we approach these?

Timothy SykesJul. 28, 2021 at 5:49 am

Don’t trade with margin unless you are an experienced trader and/or have no choice. Only trade money you actually have to trade. Keep it simple. Seriously.

David TupuaFeb. 23, 2021 at 4:20 pm

Thanks for the information. That was tons of good things to think about and to learn. When should I open a trading account with a brokerage firm? Now or when I feel comfort enough to trade. Thanks

Timothy SykesMar. 30, 2021 at 2:31 pm

Well, if you’re not ready to trade, you don’t need an account … EXCEPT if your broker allows paper trading. In that case, open an account and practice paper trading. Or use StocksToTrade to practice. (Note: I helped develop StocksToTrade and I’m a proud investor in it.)

Noah NacillaJan. 30, 2021 at 11:05 am

I start with your 30 day bootcamp and on my 4 day learning and reading your posts and whichever links in the post lead me. There are a lot information and are very helpful to me as a beginner. Thanks for all of these.

The_BluesterJan. 22, 2021 at 2:52 pm

Ive never traded a stock on my own in my life. Im learning now but a margin account for a newby could be a financial disaster. I get it. Learn, start with a small account and do the work to give yourself a chance to be in the 10% and not the 90%.

Timothy SykesJan. 26, 2021 at 9:50 am

YES! Glad you get it.

KURT P ELDRIDGEJan. 11, 2021 at 8:06 pm

I feel like I understand the rule,and I feel that I can work within that criteria. The hard part is my current job 8:30am-6:00pm Eastern time. How to work in trades to grow a small account?

Timothy SykesJun. 28, 2021 at 11:46 am

It’s pretty tough if you can’t ever be there when the market is open. You could try to learn swing trading strategies.

Matthew46Dec. 23, 2020 at 11:33 am

Thank you Tim!! STUDY STUDY STUDY!!! learn the process refine the process!!!

TascoDec. 13, 2020 at 4:12 pm

Been trading, on and off for the past 20yrs. I broke my strategy of putting a goal on my buys and was happy to see you recommend setting a goal, a target to get out. I let a group I was involved in, convince me to hold a stock that i was up 80k grand on. By the time I found it was tanking, I also found, when a symbol is tanking, you got no buyers Without buyers, your shares are worth nothing. Thanks for your advice.

Timothy SykesDec. 15, 2020 at 2:55 am

Good lesson – thanks for sharing.

John CombsNov. 10, 2020 at 1:32 pm

If I buy 5 tesla stocks, 5 tmobile, and 5 microsoft on Monday. Let’s say I have 6 other stocks. If I set a limit sell for all 9 individual stocks and 6 of them sell on Friday. Would/could this be considered day trading?

Timothy SykesNov. 12, 2020 at 3:25 am

Any trade where you buy and sell the same day is a day trade. Overnight holds are not day trades.

Greg BirdJun. 28, 2020 at 3:35 pm

Very helpful, thank you.

Timothy SykesJun. 29, 2020 at 4:37 am


ZackMay. 21, 2020 at 11:47 pm

The PDT was only enacted to keep the poor from being able to get rich quicker by allowing them to the freedom to exit trades at any given time. Its funny how you suddenly don’t need to be protected from yourself when you have $25k even if you’re a new trader.

Timothy SykesJun. 02, 2020 at 5:25 am

WRONG! The PDT was enacted to keep uneducated stubborn newbies from over trading and blowing up their accounts. I used to hate the PDT but over a decade of teaching has taught me newbies NEED the PDT.

RaduApr. 24, 2020 at 3:07 am

Everybody is talking how to avoid the PDT rule and use cash account, but nobody is saying that the cash account also have rules, like T +2, good faith violation. How about avoiding that?

Timothy SykesApr. 28, 2020 at 3:29 am

Yep. How about just taking fewer trades and working on the process? The rules are there to protect you.

HenryMar. 28, 2020 at 8:37 am

Knowledge facilitates growth & development.

HarshDec. 20, 2019 at 7:58 am

Is there any drawback to PDT account other than maintaining minimum of 25K?

Timothy SykesDec. 21, 2019 at 7:27 am

Yes, if your account is under the PDT level you’re number of trades is limited. But for newbies that’s GOOD! It keeps you from over trading.

Jesse BissonetteSep. 17, 2019 at 8:53 am

Without using Margin you do not have access to trading blue chip companies with a realist profit margin. Why bother, “Gambling” on penny stocks when you can trade quality company’s for small gains: 2% = 8% gain on your money. Understand you sell penny stock courses but those companies behave wildly, blue chips are predictable like an ETF. I will bet with you, I will drink 3 beers & trade every morning against the average of you top 10 students, using margin on blue chips & beat them.

Timothy SykesMay. 20, 2020 at 4:25 am

I don’t gamble, I trade predictable patterns and don’t need to use margin to make 5-20% on a trade. Too many newbie traders blow up accounts using margin when they have no idea what they’re doing. My strategy lets someone with a small account build over time. I’ve been trading the same predictable patterns for 20 years and teaching them for a decade.

Mr SimmonsJun. 02, 2019 at 1:57 am

I’ve been studying alot, many bulkshit gurus all say the same thing. However, I notice what your company has put into your advertising, a lot of work. As a 40 year old construction worker, I appreciate hard work. I am serious about trading, and I would like to learn more about your program.

Timothy SykesJun. 17, 2019 at 8:43 pm

its good to be real 🙂

Fuck offMay. 24, 2019 at 10:06 pm

PDT rule is absolute bs. It shouldn’t be a thing. It actually ends up losing a lot of amateur traders money. They cant exit their positions!!!!!!

sbobetApr. 11, 2019 at 2:12 am

Enjoyed every bit of your website post.Much thanks again. Awesome.Im happy for the content post. Awesome.Really liked this blog article.Much thanks again. Much obliged.Awesome post.

Timothy SykesMay. 01, 2019 at 3:16 am


indobola303Apr. 08, 2019 at 11:22 pm

Thanks For sharing this Superb article.I use this Article to show my assignment in college.it is useful For me Great Work.

Timothy SykesMay. 01, 2019 at 3:17 am


MarcMar. 23, 2019 at 4:20 am

Great info in this post. This answers all the. Questions If you still dont understand after reading this then you dont need to trade.

Ronnie CarterMar. 05, 2019 at 12:41 pm

Steve, great website — just wanted to point out a minor little bitty error. The PDT rule does NOT apply to futures trading. Otherwise, awesome article.

SamJan. 25, 2019 at 3:47 pm

Timothy, I am a pattern day trader and still trying to figure out what the problem is as long as I’m easily maintaining the required balance and only use margin in order to be relieved of the annoying SEC T+3 settlement rule, which in my opinion is the biggest reason one would WANT to have a margin account with a large balance. This way, I can trade without having to worry about how many “trips” I made in a week or a day. What am I missing? Honestly looking for an answer as I keep reading about how you don’t want to be flagged a pattern day trader…but I can’t find out why, other than having to maintain the minimal 25,000 balance. Am I missing something here?

surfDec. 28, 2018 at 2:30 pm

If I buy 300 shares of ABC stock and 2 hours later sell 100 shares and 2 hours after that I sell the remaining 200 shares, is that one day trade or two for PDT purposes?

NAOct. 26, 2018 at 3:11 am

Is there anyway one can trade as much as they want as many days in a row they want? Ive only been back to trading since they created these stupid rules following the 2002 debacle, and I have already ended up in Broker Jail for 90 days. I didnt realize each trade (buy) equaled 1 and each trade (sell) equaled 1. Or maybe it doesnt and I still dont get it. Maybe if I present my scenario someone can tell me how I violated it three times in 9 days. On the 11th I bought and sold 2 securities twice. On the 12th I bought and sold 1 security. On the 15th I bought and sold 3 securities. On the 16th I bought and sold 1 security twice. On the 18th I bought and sold 3 securities. On the 19th I bought and sold 1 security. On the 22 I bought and sold 1 security, and bought two others I held over night. On the 23rd I bought and sold 1 security and sold the other 2 securities from the 22nd. On the 24th I bought and sold 2 securities and I hit my 3rd good faith violation. Then I was charged a mailgram free of 5 dollars. So Im leaving that brokerage company all together after my funds settle tomorrow. Im pretty sure Im not “working around it” However, I tried using 2 sub accounts on a cash account and alternate the days to limit the activity to 3 days one week for one account and 2 days the next week and vice versa. That didnt work. However Im doing something right. Over 9 actual days of trading I made 18 trades with only 2 losses and I have 16% gains. Now I just need to figure out how to stay within the scope of these rules so I dont get restricted. Which is weird anyway. If they dont want you “freeriding” which is stupid since your funds selling the stock are already validated and my funds buying it are already validated. Why does it take 2 days to settle these funds? It should be automatic. Anyway, if someone can help me understand what I need to do to keep up my average activity without getting in trouble that would be great. Also, can the SEC or the FED actually come after you for violating their Brokerage rules?

Trevor BothwellOct. 12, 2018 at 11:09 am


I know you probably won’t see this, but I want to thank you for the invaluable education you’ve given me. I purchased Weekend Profits over the summer and have been studying ever since.

On 9/14/18 I bought 1000 shares of my first stock, MYSZ, off your tip. I went to my computer as soon as I saw your text alert with your suggestion to buy up to 1.25. By the time I logged on it was already up to 1.35. I contemplated what to do and ultimately bought at 1.35, knowing it could backfire. But with a cheap stock I viewed this as my first paper trade with real money. I knew I had to feel the real emotion at some point. The stock immediately fell a couple cents (of course) but moved to 1.42, at which point I sold and cashed out with a whopping 68 bucks.

On 10/11/18 I bought 2000 shares of PLUG for 1.80. It had support at 1.75 for over six months so I wanted to play the bounce. My strategy here was to assume it would move at some point back up around 1.90-2.00 so I prepared to hold it up to a week. It did 1/3 of its volume in the final half hour of the trading day, seemingly indicating that it was gaining momentum amongst investors interested in buying low. The next morning I was expecting it to start strong and it did, so in true Tim fashion I decided to cash out for 100 bucks instead of waiting and hoping I could make another couple hundred the following week.

I’ve only made two trades so far but they have been winners, which in my mind speaks volumes about how much I’ve learned from you. I trade scared and I trade smart, trying to find all the patterns I can while attempting to predict when price movement will be initiated by buyers or sellers. Slowly but surely I’m formulating my own strategies, so hopefully these tiny victories will eventually turn into larger gains. All the best.


Gerald BohamOct. 03, 2018 at 10:48 pm

Very informative ,Tim.
Thanks for sharing these must know secrets which traps newbies like me.

Pavel SvecAug. 12, 2018 at 3:40 am

The problem trade without leverage is probably short-sale of stock, you cannot use your cash /money/ to do that allways only with margin.

AmeliaApr. 18, 2018 at 12:01 am

Still learning and studying. Thank you for mentoring us!

victory77Apr. 12, 2018 at 2:58 am

Thank you Tim. Appreciate clarification on Trading Rules. Great videos & info for success!

LarryApr. 11, 2018 at 9:54 pm

like Anonymous and Anthony 20 June 2017 I am broke, broke, less than 500$ to my name but one day the hours and hours and hours of your teaching will pay off for me .in a big way and I will never look back. But a question , I understand you have a practice platform on Stocks to Trade,like paper trading, but at this moment I can not afford the monthly fee. Is there anywhere else on the net that someone can paper trade? I know it will require a lot of extra work , maybe more than I am capable of ,not having all the info that is available on Stocks to Trade,I certainly do not have the knowledge Tim has ,but I do have two notebooks full of notes and now over 200 hours of training, no money but i want to practice on paper so I will Know I am ready when the time comes.

Benny CooperApr. 11, 2018 at 4:40 pm

I’m studying every day and night. …I’m on my way to being one of your newest millionaire students,I just have to get some time to actually trade…lol.

Mark GarmanJan. 31, 2018 at 12:12 pm

Great article Tim! Everytime I read one it gets me more and more excited to start and achieve my goals/dreams. See you at the top

AnonymousJan. 30, 2018 at 10:34 pm

Nice NO IB Agreements !

Kristi SavageJan. 08, 2018 at 5:32 pm

My husband bought me your How to Make Millions DVD and I am so addicted! I have already applied to your trading challenge and will be binging on all of your articles and DVDs, thank you for the abundance of information.

AnonymousJan. 02, 2018 at 10:22 pm

great info and so true, paper trading helps when out of day trades … getting in practice of different strategies .

JJ MalvarezJan. 02, 2018 at 4:14 pm

Finally pull the trigger today and funded my Ameritrade account with $2500.
I will cut the BS and take the PDT rule as a teaching rule that will make me more discipline and wiser on how to wait for the right play.
Thank you Master Sykes for all you wisdom. I feel confident that if I follow your teachings I will also achieve my dreams.
To become the best you must learn from the “Bestest”…

yanOct. 17, 2017 at 6:52 pm

This is a great read. I have been making mistakes and going around the PDT rule and loosing out month after month. Hands down sounds like this is a turn in the right direction. As always, studying is the key to success.

LRJCAug. 16, 2017 at 11:32 am

PDT keeps us age from over-trading! Work within confines and use them to your advantage. NOOB question, but does it count as a trade when opened, closed, or both? I’m confused about the hold overnight part. If you buy during market open, hold, sell the next day, is that one trade or two? What if you buy after-hours?

RicardoAug. 15, 2017 at 1:00 am

Awesome! Thanks for clarifying about the 3 trades per week! I would love to be part of the challenge

Eric jimenezJul. 10, 2017 at 6:18 pm

Hey I only have 1000 dollars, does this mean I can trade 4 to 5 times a week too or does it mean I have to wait 3 days till the funds from the sale settles

RickJun. 29, 2017 at 12:48 am

Great article and to the point!

Muhammad KhanJun. 27, 2017 at 10:53 pm

Very informative article specially for newbies like me. I’ll keep it in my mind as will start off my trading journey soon.

NicolasJun. 27, 2017 at 5:11 am

I’m not concerned by the PDT rule but i better enjoy be prepared like a sniper for my trades than a scalper.
Thanks Tim for the tips!

GrihAm3nt4LJun. 27, 2017 at 4:42 am

YES!! I’ve read it before, i’ve read it now, i will read it again and again as these articles are the goldmine of penny stock knowledge !!!

Lucas JacksonJun. 27, 2017 at 1:08 am

I don’t bitch. I don’t whine. Let’s fuckin’ do this.

Vandel ChinenJun. 26, 2017 at 11:50 pm

I thank God for this rule!!! Mahalo Tim!

AnonymousJun. 26, 2017 at 11:15 pm

Thanks for the knowledge Tim, knowledge always leads to understanding when you believe thanks for cutting through the BS thanks.

Chris HallJun. 26, 2017 at 10:42 pm

Thanks. Makes sense!

Greg HalliwillJun. 26, 2017 at 10:34 pm

The PDT rule is great! It helps me be more thorough with my research and diligent when looking at the market so I don’t screw up.

RichardJun. 26, 2017 at 9:32 pm

Awesome… looking forward to making some money safely

Art HirschJun. 26, 2017 at 9:29 pm

Very clear!

AnonymousJun. 26, 2017 at 9:10 pm

Thanks Tim

KevinJun. 26, 2017 at 9:09 pm

Great Info, Thanks Tim

William BledsoeJun. 26, 2017 at 9:02 pm

Done. Time to get going.

ALISONJun. 26, 2017 at 8:55 pm

Thanks Tim! I joined the challenge earlier this month and ff I’m soaking in as many patterns and videos as I possibly can every day. I joined because I trust your strategies, they makes sense! *Cheers to profits!!

NatalieJun. 26, 2017 at 8:48 pm

This makes sense! Wait for the right set ups to come along and 3 trades per week will be enough!

TannieJun. 26, 2017 at 8:23 pm

Thanks for the info, luckily not under PDT rules.

AnonymousJun. 22, 2017 at 8:57 am

makes sense tim!

Idn pokerJun. 21, 2017 at 3:30 am

Hi, ᥱvery time i used to check webpage posts һere earⅼy in the break οf ԁay, аs i like to learn morе and moгe.

AnthonyJun. 20, 2017 at 2:15 am

Tim,I’m a poor broke ass slave to the grind but thanks to you I’m starting to get rich in knowledge and when I’m wealthy enough in my studies only then will I apply what you have taught me and one day I will have absolute freedom that’s my destiny just want to Thank You for sharing

AnonymousJun. 20, 2017 at 2:04 am

I’m a broke ass poor boy just getting by, but I’m starting to get rich in knowledge and after I’m totally wealthy with my knowledge will I put it to use just want toThank you Tim for sharing your knowledge

DNNJun. 17, 2017 at 12:25 pm

Thank God for bringing us this far today.

Growing up in Flatbush Brooklyn back in the 80’s and 1990’s, I didn’t have luxuries either. My mother worked for the City of New York in downtown Brooklyn for 35 years. She worked paycheck to paycheck. And on most occasions, she was snubbed from getting a raise. But she kept on working and successfully retired in 1994.

tomfinn92Jun. 17, 2017 at 8:48 am

No whining about the PDT rule. Thanks, Tim!

NancasoneJun. 16, 2017 at 8:02 am

STUDY and trade FAR later. Agreed!

ShilungisiJun. 14, 2017 at 7:43 pm

But what’s the difference between scalper and sniper?? No offense

ScottJun. 14, 2017 at 3:48 pm

Hi Tim it’s all starting to make so much sense to me know as for not being able to over trade and needing thousands to start.I have been wanting to start on stocks for a while now and am willing to put everything in to it as in effort and revision I have an eToro demo account as don’t have the money at moment to open real account so I need as much practice and help from an awsome knowledgeable bloke like urself kind regards Scott from the uk

MarkJun. 14, 2017 at 2:17 pm


WereWrathJun. 14, 2017 at 10:44 am

It Definitely Makes Sense Big Companies Take Advantage Of People And Makes Them Think Trading Is Like A Machine Gun Trading Any Chance You Get, When Its Really Like A Sniper Gun Waiting For The Right Opportunities To Strike. Conserve Your Bullets So You Have Enough To Strike The Right Targets “Patience Is Key” Like Mr. Sykes Explains And Teaches Time And Time Again! Thank You For The Years Of Great Advice!.

Dominique NataleJun. 14, 2017 at 8:00 am

Thank you !!!!

Martha JuarezJun. 14, 2017 at 1:41 am

Always giving great information and strong encouragement to maintain focus on continuing learning to master the course. I truly appreciate it all. Will stay strong .

Peter FisherJun. 13, 2017 at 1:50 pm

I’m going to study hard and crack on even with a small account and grow it

Darren HendersonJun. 13, 2017 at 1:27 pm

Hope I get to work with Tim and the rest of the team!! I’m ready to change the way I think to better myself and be able to help myself and my family.

Robert PriestJun. 13, 2017 at 12:53 pm

Cut through the BS. Don’t whine about the PDT rule.
Thanks Tim.

Tao_penny_ (Dušan)Jun. 13, 2017 at 8:46 am

It makes sense to me and I’m going to cut the BS about whining about the PDT Rule. 🙂

PatrickJun. 13, 2017 at 4:27 am

I’m only 15, so I have to juggle school + Stock Market Work, Therefore I have intensively scheduled my time so I still get down 25+ hours of Stock Market Study a week. I used to be addicted to video games… I worked myself out of it and now I’m addicted to self-improvement and working hard!

The PDT rule is awesome! USE IT!

Author card Timothy Sykes picture

Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity. Read More

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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (205) 851-0506 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”