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I am trying to avoid the pattern day trader rule. I have $20,000 in a cash account, and the money is settled funds. To follow the T+3 rule, I plan to trade only $4,000 a day in order to have enough settled funds to trade for 5 days. During the day, I trade multiple times with only settled funds, which means I will make over three-day trades in a five-day period. I wonder if I am allowed to trade as I plan. Also, Am I considered to be a day trader? Will my plan violate any regulation?

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Settlement for equities is T+2 not T+3. Because of that, you can turn your money over faster than every 5 days because cash from closed trades will be available for use in two days.

You can make as many day trades as you want in a cash account as long as you use settled cash. Yes, you will be a day trader but you will not be subject to the Pattern Day Trader rule.

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