500$ minumum for daytrade?

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Tomerep

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I've recently saw http://www.alliancetrader.com/ . a site that offer you the opportunity to daytrade with 500$ minimum of deposit, is that a scam? or reality, because last I've read you've got to have 25k$ in order to day trade, so please tell me if they are legit because I sure dont have 25k$ yet, so I want to start an account in that site, oh, and if any of u people know them, please tell me if they are reliable..
thanks
 
Tomerep said:
I've recently saw http://www.alliancetrader.com/ . a site that offer you the opportunity to daytrade with 500$ minimum of deposit, is that a scam? or reality, because last I've read you've got to have 25k$ in order to day trade, so please tell me if they are legit because I sure dont have 25k$ yet, so I want to start an account in that site, oh, and if any of u people know them, please tell me if they are reliable..
thanks
Click to expand...
Licensed by the Securities Commission of Jamaica to carry on the business of Securities Dealers and Investment Advisors.
Disclaimer: This web site is for informational purposes only and does not constitute an offer or solicitation of products or services where prohibited by law. System response, trade executions and account access may be affected by market conditions, system performance, quote delays and other factors. The risk of loss in electronic trading can be substantial. You should therefore consider whether such trading is suitable for you in light of your financial resources and circumstances. Alliance Investment Management, LTD is not targeted or intended for US or Canadian persons. Service are only available to Europe, Asia, South America, Africa, Australia, and the Caribbean.
Member JCC, FSCJ Registered This should ring some alarm bells!!
 
They sound genuine enough to me. I tried their demo, but that didn't impress me much though as the software wasn't very good. I think you still need a high net worth to open an account, even though you are allowed to trade with little capital.
 
The thing is that I read everywhere that when u start u shouldnt think you'll earn much at the start, so 500$ is a money I can lose for the effort of learning. I'm willing to lose a lot more if u'd tell me I'll learn that way, but 500$ for start is enough, with my other money I swing trade for now..

If anyone is using them, or has been using them, please tell me if they are legit and all...

My thinking is that.... maybe they open US account with my 500$, and another 20k$ of theirs, only so I could daytrade, and that way they keeping the whole thing legit, because otherwise I dont know.. its stated in every place that u need 25k$ in order to start daytrading...
 
Tomerep,

Even if these guys are legit., looking at those commissions, platform fees, ECN fees and the like, it's going to eat your account up in no time, not to mention slippage. With 500 bucks and even with the 1:4 margin they offer that gives you less than 2000$ buying power after considering costs. You are going to struggle to do more than 399 shares a ticket with that so the minimum ticket price on that is almost 13$, before other fees.

I'm sorry but that stacks things horribly against you being successful. If you want to try your hand and gain some experience at day trading with such a small amount maybe you should try forex but I would give this a miss, and with a $30 wire in fee and a $100 wire out fee ( highway robbery of the puriest form), I would definately give this lot as wide a berth as possible.
 
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I'm willing to lose a lot more if u'd tell me I'll learn that way
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Here's my advice Tomerep...

Why not learn a lot and lose nothing?

Open a demo account with any broker and practice for 6 months. If you have the discipline to do this you may have the potential to trade full-time. If you start to get reasonable results, then open a live account :)

Steve
 
Tomerep said:
My thinking is that.... maybe they open US account with my 500$, and another 20k$ of theirs, only so I could daytrade, and that way they keeping the whole thing legit, because otherwise I dont know.. its stated in every place that u need 25k$ in order to start daytrading...
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What? You have to be kidding.

When people say you need $25k to daytrade, they are saying that you need that much capital to have a chance for your winning trades to beat the transaction costs.

Whether or not some trading site will let you put $500 in an account has nothing to do with this. They're not going to stop you from trading away all of your money in commissions (in fact, I'm sure they'd appreciate it if you did), and they're certainly not going to lend you $20k on $500.

flat5
 
$25K is the minimum amount that the SEC will allow you to day-trade US stocks. It was not always this amount and there is no real reason for this. There is a view that MM wanted to oust those with low capital because they were causing too much volatility in certain stocks. I dont know if this is true but I have heard it on more than one occasion.



Paul
 
flat5 said:
What? You have to be kidding.

When people say you need $25k to daytrade, they are saying that you need that much capital to have a chance for your winning trades to beat the transaction costs.

Whether or not some trading site will let you put $500 in an account has nothing to do with this. They're not going to stop you from trading away all of your money in commissions (in fact, I'm sure they'd appreciate it if you did), and they're certainly not going to lend you $20k on $500.

flat5
Click to expand...

Never assume. find out first...........
http://www.daytraders.com/nasdaq_rule_2520.html
 
I was wrong on that point. However, this guy is still nuts. He wants to day trade with $500? He thinks he can trade $25k by putting up $500?
 
flat5 said:
I was wrong on that point. However, this guy is still nuts. He wants to day trade with $500? He thinks he can trade $25k by putting up $500?
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Agreed, though "nuts" may be a bit strong, perhaps naive. One of the many accepted reasons traders fail to make money is because they are under-capitalised for their objectives. Now it probably would attract a lot of debate and argument to put a figure on suitable capitalisation, however I think it would be fair to say that $500 falls safely within the category of under-capitalisation for most objectives.
 
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i wouldn't be so quick to judge , if he's day trading and profitable that $500 will compound very very fast , if for example he could theoretically trade on 4:1 margin intra day and averaged an underlying return of just 0.1% per hour ( not much more than the spread on lots of stocks) he would (*4 for margin) double his money each and every month and earn himself quarter of a million in his first year .If he isn't profitable ( an affliction most suffer from) he loses less.The underlying truth as told by myself so many times , the only thing you need be is truly and consistently profitable , the rest is rubbish , money management , large amounts of capitol and i include "honest thoughtful trading "in this ,will get you absolutely nowhere!!
 
$25K is the minimum amount that the SEC will allow you to day-trade US stocks. It was not always this amount and there is no real reason for this. There is a view that MM wanted to oust those with low capital because they were causing too much volatility in certain stocks. I dont know if this is true but I have heard it on more than one occasion.
Click to expand...

When was the 25k rule introduced Paul and has there ever been any talk of increasing it ?
 
Well the bottom line I guess is that people can only advise / suggest, based on their experience, no-one can force anyone to take any particular route or method. As an instructor friend of mine used to say to his students who vehemintly disagreed with him. "That's ok, you trade it that way if you want, it's not my money."
 
many firms allow unlicensed people to daytrade with accts below $25K. my group has agreements with hammer (sungard clearing) for forigners and tradspeed (merrill) for americans with rates much lower than alliance. if anybody wants info, send me an email
 
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