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I am working on an algorithm for swing trading where I buy at the close today and sell at the close tomorrow. It worked well in the simulations that I ran but I would like to test it in the real world. I'm trying to use as little money as possible since this is beta testing. To start a day trading account, sites like Lightspeed ask for a minimum of 25,000$. Is a day trading account really necessary for this type of trade? If not what account should I choose?

P.S. I'm a non-US resident so the sites that I can use are brokers like Interactive Brokers and Lightspeed.

closed as off-topic by Pete B., Dheer, Nathan L, JoeTaxpayer Sep 19 '18 at 2:21

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    Have you considered using a virtual trading account? If you want to use as little money as possible for testing, you can't beat $0. – Justin Sep 18 '18 at 12:25
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Not to nitpick but there is no such thing as a day trading account. It's either a Cash Account or a Margin Account. If you choose to day trade, each type of account has its own requirements/limitations for such trading.

In the US, a Pattern Day Trader (PDT) is someone who executes more than 3 day trades (options and equities) in a rolling 5 business day period in a margin account, provided the number of day trades is more than six percent of the total trading activity for that same five day period.

A PDT must maintain a minimum equity of $25k in a margin account on any day that trades are made and must be in the account prior to the day trading. If the account drops below $25k, no day trades will be allowed until the account is restored to the $25k minimum equity level.

Day trading is defined as the buying and selling of a security within a single trading day. If you are buying at close today and selling at the close tomorrow then you are NOT day trading.

Practically speaking, a minimum of $25k is needed to open an account but you need a bit more because A PDT must maintain a minimum equity of $25k on any day that trades are made. It must be in the account prior to the day trading. If the account falls below $25,000, the PDT will not be permitted to day trade until the account is restored to the $25,000 minimum equity level.

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Very simply, without a margin account, you cannot sell tomorrow what you bought today, because it hasn't settled yet.

So unless your pattern works with three days delay, you will need a margin account (which comes with the minimum cash requirements)

  • Very simply, (in the US) you can sell anything you have purchased any time that you want, even one second after you bought it. What you cannot do in a Cash Account is use the proceeds from that sale for another purchase until the funds have settled which in the US is now T+2 – Bob Baerker Sep 18 '18 at 15:58
  • Thank you for your response, does that mean I use the funds of the sale I did today, to buy another set of stocks instantly? – Rishi Swethan Sep 22 '18 at 11:25

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