Day Trading under $25,000

I had posted the message below over on elite and I figured some of you may be interested as well.

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A trader friend of mine has been looking for a way around the NASD day trading rule, which states that you must have an account over $25,000 in order to day trade everyday (I don't worry about it myself because I have much more than that). Anyway, he found this firm that is not located in the US, so they are not governed by the NASD and therefore do not have to follow this rule.
Here is their website: http://www.alldaytraders.com

He has been using them for several months and says he looked into it before he started. Including speaking to a friend of ours thats a securities attorney. You still get a direct access trading platform with Level 2 quotes and charts. The firm's bank is in the US and the clearing firm is in the US, so the funds supposedly never really leave the US. He says he has deposited and removed funds several times with no problems. He also day trades everyday even though his account is only worth around $12,000.

Obviously this is not for everyone, some people may not feel comfortable trading with a foreign brokerage which is understandable and a matter for you to decide on your own. It is something I found interesting when he told me about it and I figured alot of you without the $25k may be interested as well, so I figured I'd share the info. If this is valid, it seems like such a simple answer to this issue that I can't believe it had not been thought of earlier (Don't like US rules = Don't trade with a US firm).

If you have any questions, post them and I'll try to ask him or even better you could go to the site and ask for yourself. After all I'm not your secretary.(Just kidding, I'll ask him if you want).

Interesting,i dont know how they've got around the rule even if they are outside the US, but thanks for posting it.

"Licensed by the Securities Commission of Jamaica to carry on the business of Securities Dealers and Investment Advisors."

Alliance Investment Management (aka All Day Traders) are listed, but it would be good to get a few more recommendations.

Thanks BTT.

Naz said:

Interesting,i dont know how they've got around the rule even if they are outside the US, but thanks for posting it.

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The NASD and SEC are US institutions they have no jurisdiction over foreign firms. Their rules are only enforceable within the US.

My buddy has been day trading everyday for 2 months already. It's about time someone found a way around this $25k rule, which I believe is total BS anyway.

This sounds interesting but how do you know your funds are safe if the company go's broke?

bigtimetrader said:

The NASD and SEC are US institutions they have no jurisdiction over foreign firms. Their rules are only enforceable within the US.

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I feel like most about the $25k rule.Although CFD trading the US markets from the UK gets around this rule.If what is said above is true then why cant UK brokers offer the same direct access service as the company mentioned above?.I'm having a meeting soon with the CEO of one such major UK company to discuss the US markets and i shall put the question to him.

Something suspicious here.

Look at this person's post at:-

http://www.trade2win.co.uk/boards/showthread.php?p=95711#post95711

Follow the link on that post ( www.realfasttrader.com )

Anything look familiar?

This isn't someone trying to flog us something is it?

Careful!

LII

The above is interesting and i'm going to check it out.I'm not bothered if someones trying to flog something or not.I like to think for myself.

LevII said:

Something suspicious here.

Look at this person's post at:-

http://www.trade2win.co.uk/boards/showthread.php?p=95711#post95711

Follow the link on that post ( www.realfasttrader.com )

Anything look familiar?

This isn't someone trying to flog us something is it?

Careful!

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Just a note, we were both using the broker realfasttrader and they were the ones who set the deal up with the foreign BD to use their software. They also told my friend about the foreign broker, so it does not particularly surprise me that sites look similar. It's certainly the same software and probably the same webmaster as well.

we were both using the broker realfasttrader

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In which case your friend, presumably, had sufficient resources to pattern day trade with realfasttrader

No need for him to move elsewhere to use the same facilities at the same commission but without the US controls, insurance and general security was there?

LII

LevII said:

In which case your friend, presumably, had sufficient resources to pattern day trade with realfasttrader

No need for him to move elsewhere to use the same facilities at the same commission but without the US controls, insurance and general security was there?

LII

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Presumed incorrectly, that's the whole point... he did not have sufficent funds. If you had read my earlier post, I said he only had like $12,000. He was swing trading at realfast, because he could not day trade under the US rule.

They told him about their deal with the foreign broker.

I shall look forward to seeing a review of this broker in the Reviews section of this website.

Me too Salty!

My friend and I were discussing this topic earlier today:
Do you guys believe that you can be a successful day trader with a less than $25k account? :?:

Somewhere on the IB site it says that you are unlikely to be successful with less than US$ 50,000.

I have never quite understood the logic behind that statement.

Of course you can be successful with less than US$ 25,000.

It all depends on you - not the size of your opening capital.

Size of account?

Salty Gibbon said:

Somewhere on the IB site it says that you are unlikely to be successful with less than US$ 50,000.

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I read an article about this very thing in the US apparently:

Under 3% of people make money.

Of those 3% over 90% have started with accounts in excess of $25k, and 75% started with at least $50k.

So I guess there is sort of logic there but I'm not sure thats its perfect logic!

Under 3% of people make money.

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That is a joke. There is no way 97% of day traders lose money. I would like to read that article, because that is ridiculous.

I definitely believe that more than 50% lose money, but 97%, come on nobody would be doing it if that were true.

It could be 97% if you include every person for the last 20 years who has ever tried daytrading, including those who, say, daytraded just twenty times in a week, lost and then gave up. The statistic is fairly meaningless without a time frame of reference IMHO. It's a bit like saying that in the long term the S&P500 always goes up - yes, the index has done but I believe that in the index the laggard companies are continually replenished by the new leaders which distorts the figure.

This sounds like someones done a very small survey and then states that this is so. Did this person ask every single day trader who is successful how much they started with?

How would anyone even know who every single successful day trader even is?

As for this 97% or 95% or 90% or even 80% figure we hear about all the time!

How can we trust a figure that different sources can`t even agree on!!

Is this, as frugi says everyone in the history of man who ever tried day trading, if so what`s the figure for people who have day traded for 6 months, a year or even two?

Lastly just like the thing about starting capital, how the @%$£ do these people know? Has anyone asked you? I know I`ve never been asked. And I`m pretty sure brokers would be in breach of client confidentiality rules if they gave out details of accounts for these things.

I`m now going to go and sit in a quiet dark room and calm down

Steve

lads/lasses, who cares what the percentage of winners is, as long as we are in that percentage? we wudnt be posting here if we were not.....