Bye, bye, PDT!!!!!

If you have read my blog for a while, you know that I have not hidden my disdain for the pattern day trader rule. In fact, I have made past blog posts specifically about the rule, such as here and here.  The rule made trading an uphill battle.  First, if I made a mistake, it would cost me a day trade, and the 3 day trades per week that you are allowed is not very many.  Second, I found that it would mess with my head psychologically.  Sometimes I would take on too much risk and hold trades too long (because I didn't want to use up a day trade), or I would enter overnight trades that were a bit more risky.  Third, I found that it would penalize me for good risk management.  For example, I have a rule where, if I'm up at least 50 cents for a stock over $10 per share, that I move my stop to break even (so that I never let a profit turn into a loss).  One day I was short BORN, it dropped about 55 cents from my entry, and then came back to my entry and I got stopped out.  Then BORN went right back down, and I couldn't re-enter the trade because I was out of day trades.  It was a trade I would've made $500 on, but I couldn't get back in because I was disciplined and followed my rules!

Well, as of today, I am finally free of the shackles of this rule.  Sure, I was part of Cy Group for a while which allowed me to day trade freely, but I couldn't access their software from behind a firewall which limited me in how much I could trade with them (most of my day I'm behind a firewall).  I was only able to trade from my Cy account for the first 1.5 hours of the trading day.

But now I'm truly free.  I had enough money in all 4 trading accounts that I moved most to my Interactive Brokers account, closed my Cy account, and kept a small amount in my Speedtrader and Sogotrade accounts (although thinking about closing Sogo because their borrows have become horrendous).  Combine that with some funds that I was adding every now and then, and I was just about there.  Today I was about $500 short of that magic $25K mark in my IB account.  I knew I had some money coming in tomorrow to put me over the mark, so I decided to just day trade freely today anyway even if I would get flagged.  Well, I made about $1700 in my IB account today which put me over the hump, meaning the money that posts tomorrow is just extra cushion (made about $300 in my other accounts for about a $2K day total).  Here's the trades I made in IB today which got me over the hump, all short trades except NCT which was long (which I shouldn't have done anyway...chased it a bit):

These will eventually be reflected in my profit.ly when I upload them.

Not only is the PDT barrier gone, but it opens up many opportunities for me in regards to buying power.  Buying power can limit you in small accounts even when you have day trades available.  I'll also be able to take bigger short positions in lower priced stocks because of the $2.50/share cash rule.  I also will be able to re-enter positions when necessary.  For example, I shorted URZ today at 3.99.  It hovered in the 3.80's for a while, and came back up to my entry.  I jumped back out to make sure it didn't turn into a loss.  It then came back down to 3.88.  I noticed that gold futures were dumping, so I re-entered the short.  I ended up making one of my biggest profits of the day on it.  Under the PDT, I wouldn't have been able to re-enter like that.

Now with the PDT barrier removed, it will be so much easier to make progress, and I no longer have the rule messing with my head.

It's so nice to have this rule in my rear view mirror.