Let me be honest with you, there was a time that I felt that the only way one could enter market trading would be to have a sizable account like something around $25,000, but that is far from the truth! Today, with $0 commission fees really anyone with side money can enter the market. There are so many different platforms to choose from to start seeing real return on your money instead of those very small saving account gains which amount to really nothing in the end. Once you think about the taxes that you have to pay plus inflation, which a lot of people forget about when they consider where they will keep their money, you are really left in the hole instead of gaining.  

There are a couple of different ways one could start to day trade. Those ways could be a margin account or a cash account for example. 

A major problem that comes from using a margin account with less than $25,000 is you will fall into the pattern day trader rule (PDT). All this means is you will not be able to make more than three trades in a rolling five-day period.  Let me break it down for you, the easiest way to think about it is if you make your three open to close trades on a Monday you will be unable to trade again until the following Monday.

On the other hand, a cash account is different in the way that you could take as many trades as you wish as long as you have the funds to continue to trade. Here is how you can envision what I’m talking about, let’s say you have $5,000 in your account and you take a trade that uses up $2,000. Now, you can only trade with $3,000 moving forward because even if you sold your shares that were holding up that $2,000 you now have to wait for those funds to clear.

What I ultimately decided to do was to open a TD Ameritrade account in March and I’m currently using a cash account for the reason that I want the freedom to make as many trades as I want and also, because I don’t have $25,000 to be able to use an margin account(yet?). In March the economy was taking a nose dive, so I was starting my dividend account for long term stock holdings to take advantage of all these great companies being traded at such a discount.  

About a week ago at the end of June I felt that it was time that I try my hand in what I really wanted from this account which was day trading. I had just south of $1,000 in my account that wasn’t held up in stocks so I decided to give it a shot! I had been using the thinkandswim paper money account to practice. If you are interested this is how I recommend starting out because if you lose its technically not real money so there is nothing really lost but everything gained because the experience is the most valuable part of using the paper money. I had been using paper money for three months and it was time to put everything that I have learned into action.   

I will be putting updates every time I trade recording my gains and my losses for everyone to see. I want  to share with my readers that it doesn’t matter where you come from, how much you start with, or what your day/night job is. The truth of the matter is everyone can make something more of themselves and be their own boss, the boss of their own lives not having to answer to anyone any longer but rather being accountable only to yourself. 

Since I’m using such a small amount of capital, I will be using a cash account instead of a margin account. The main drawback to using a cash account is that once I make a trade (a buy and sell) I won’t be able to use that same money for two days because I will have to wait for the money to clear. Therefore, I won’t be trading every day, instead I will only be able to trade when the money clears or there’s money left in my account.

The main goal here though is I want to grow this small account to $25,000 where I will be able to access a margin account being able to take trades while not having to wait two days for the funds to clear. In addition, I will have a multiplier on my money meaning I will be able to take bigger traders. 

In a later post I will be sharing things that I have learned and things that I wish I knew when I was first starting out. I will say that I’m still very new to this but in a way that’s the point that I want to focus on, sharing my experience as I am experiencing it. This is different from all those accounts out there flooding you with all this information with the endgame of trying to sell you a program for a way to get rich overnight. That’s not what I’m trying to do. I’m just like you trying to learn the ins and outs, so let’s take this journey together and with my mistakes I will teach you what doesn’t work and what does so you too can begin to see your own gains. 

As I always say, have a great day and keep learning and moving towards your goals, never stop pushing!