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🌎 What is 'Pattern Day Trading'?
Lucy avatar
Written by Lucy
Updated over 2 years ago

A Pattern Day Trader is someone who makes four or more day trades in a rolling five business day period. If you undertake 4 or more day trades and your account value is less than $25,000, your account could be restricted from trading (as that would be considered a violation of the pattern day trading requirement). If you intend to day trade and do so often, it's recommended that you maintain a total balance in your account of at least $25,000. Gotrade is implementing a protection to prevent your account from getting restricted by limiting day trades to maximum of 3 trades over a rolling 5 business day period.
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To help understand this a bit better, if you buy AAPL and sell it on the same day, it is a day trade. If you buy and sell AAPL and buy and sell TSLA on the same day, that is 2 day trades. If you buy AAPL on Monday and sell it on Tuesday, that is not a day trade, because you did not trade it on the same day. Also, if you bought and sold AAPL on Monday and bought and sold TSLA on Tuesday, that is a total of 2 day trades in 2 days. The day trade count will start re-setting after 5 business days (assuming you do no more day trades in any subsequent days).

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