DayTraderRockStar's Preferred Broker:  SureTrader

Let's start this off by saying that I have tried and tested many brokers in my 22 years in the market. I have never bothered with the bells and whistles of the fancier platforms and always seem to gravitate to the best commissions offered. I wanted something with easy to execute trades and good fills. These days, there are a lot of choices to pick from. Most try to get the edge by lower commissions and free trade offers. Being the host of Day Trading Radio, I get to interact with thousands of traders every week. A fair share of these traders are new to the field and learning the ropes. Some of them are doing that on money they saved up or were given or who knows. But the fact is, they want to give trading a shot.

If you have over $25,000 to trade with, this next part doesn't apply to you. I would say any reputable broker you can find should serve you well. In my opinion, Interactive Brokers has a good platform and the best commission. I’ve been using them for at least 10 years. Those who fall under the $25,000 in a margin account, will fall under the FNRA rule.

FINRA (NASD) rule that applies to any customer who buys and sells a particular security in the same trading day (day trades), and does this four or more times in any five consecutive business day period; the rule applies to margin, but not to cash accounts. A pattern day trader is subject to special rules. The main rule is that in order to engage in pattern day trading you must maintain an equity balance of at least $25,000 in a margin account.

A pattern day trader is defined in Exchange Rule 431 (Margin Requirement) as any customer who executes 4 or more round-trip day trades within any 5 successive business days.

Three more day trades in the next 4 business days will freeze your account (you can only close existing positions) for 90 days, or until you get $25,000 cash into your account, whichever comes first. This also applies to options.

I’m sure the intention of the rule was to protect the trader. Hmmm right….Let’s dig a little deeper

The SEC believes that people whose account sizes are less than $25,000 may represent less sophisticated traders, who may be more prone to being misled by advisory brokers and/or tipping agencies. This is along a similar line of reasoning that hedge fund investors typically must have a net worth in excess of $1 million. In other words, the SEC uses the account size of the trader as a measure of the sophistication of the trader. This rule essentially works as a stop-loss on an unsophisticated traders account, disabling the traders ability to continue to engage in high-risk day trading activities.

So, if you weren't born with a silver spoon in your mouth, then you’re not sophisticated enough to trade.
I didn't make this stuff up. It’s all right here http://en.wikipedia.org/wiki/Pattern_day_trader

I will tell you that if you’re trading with under $25,000 (raising it for some cushion) you have a big disadvantage in the markets. That rule that you fall under because “you’re unsophisticated,” will cause you more risk. It will take your focus away from making money, to juggling trades and trying hard to figure out how to keep a trade in the holster. I see it all the time. If the markets or trade does something different than you expected and starts to go against you, the decision should be clear, get out of your trade. But with the rule, it switches to “I don't want to burn a trade” or “should I hold on one more day so I can trade again tomorrow.” Tomorrow comes and their first instincts proved true and they end up getting out at a bigger loss.

People might argue this and that’s fine. But, I talk to thousands of traders a day and I get emails like this all the time. 

Dear DTRS,
I am just out of college and found your site..Love it. Big fan. Would like to do this for a living. I have 5,000 dollars any advice?

JoeTrader

I am not a dream buster, but I try to relay the fact that it is an uphill battle with such small resources. To start small and learn the craft, you should start trading $2,000 or $5,000 first and gain that knowledge that only the market can give you.

Enter SureTrader...
Like I said earlier, if you have over $25k, you have a lot of options to choose from. But now the game has changed for those with less. I feel this is the biggest benefit of SureTrader.

1.  SureTrader’s best feature is that their clients are not subject to the Pattern Day Trader Rule. (This is an SEC rule that disallows people with under $25,000 from executing more than 3 day trades in any 5-day rolling period (we went over why this rule is the biggest obstacle for traders under 25K)
(This should be it, case closed. The truth is Suretrader has pretty good commissions and the margin is unbeatable for a small account )

2.  Commissions are $4.95/trade up to 1000 shares $1.00/option contract (continue to review Item #1. Still can't beat it.)

3.  SureTrader offers 6-1 margin. That’s pretty great. Meaning you open an account with $5,000 you buying power is $30,000 intra-day. With $500.00 it's $3,000. With margin, there is great risk in trading above your means and you must be aware of this at all times. I am not recommending you to trade using the margin. Just stating the facts.

4. When I heard that Guy Gentile opened this broker and wanted to come on the show, I was full of questions. Like “how? how? how is it safe?”  “Is it legal?” I dug deep. Had them on the show even called some industry people. Everything turned out fine. Guy opened a Broker in a foreign country, the Bahamas, and just like any foreign broker it is regulated by the Securities and Exchange Commission of that country. Because of this it does not fall under The Pattern Day Trading Rule or FINRA.

It’s similar to how you can go to France and open up a bank account. Or how those from other countries can open up an account in the United States. Suretrader is open to all international investors and trader.  Canadians, German, UK, Australians and ALL.  Because of their international status, they are required to post the following on their website.

DISCLAIMER: Swiss America Securities, Ltd (SureTrader)’s brokerage services are not intended for U.S. citizens, U.S. residents or U.S. corporations.

Meaning they are not allowed to solicit business from the U.S.  However, they can accept and open  U.S. accounts with no problem.

Some people get all riled up because of the stigma of trading off shore.  These type of accounts are typically linked to tax havens. Your responsibility is to file your taxes correctly. If you do that and you won’t have any problems. Take advantage of the situation and you will eventually pay for it. Do the right thing. You have an opportunity to trade free and clear and legal.  Don't ruin a great thing.

I just finished up my account application tonight and I wanted to document my journey with Suretrader for everyone. When I thought about opening a Suretrader Account, one thing I always remind myself of and stress so much on my radio show is just because someone talks about it or it's written down somewhere does not make it correct. We as society, tend to believe everything we hear if it is presented in a professional way.  But just because it hasn’t been done before doesn’t mean it won’t work.

During the interview with SureTrader, the listeners of the show always ask me to get some type of deal I think everyone knows how the broker game is played. Guy just let us know that your first 30 days of trading are free as long as you mention DTR when it asks where you heard about SureTrader.

So what's next?

I wanted to open an account and document the process and trade using the platform as a PDT. The process was simpler than I thought it would be.  I just filled out  4 pages, submitted the docs (ID and proof of residence) and I should be up and running within a day.  Very easy indeed.

I wanted to open an account and document the process and trade using the platform as a PDT. The process was simpler than I thought it would be.  I just filled out  4 pages, submitted the docs (ID and proof of residence) and I should be up and running within a day.  Very easy indeed.

I thought the online signing was a cool feture.  Everything is paperless.

I am not the best signer with my mouse!

You can pay for the pro version, but I decided not to for now

I uploaded a scanned picture of my drivers license and a bill with my address on it using the simple uploader. It worked fine.

Then the confirmation screen came up and I will be able to fund it tomorrow.

Sometimes things too good to be true are in fact true. So far so good. If the situation changes for any reason and I feel something’s not right, you will be first to know. I am excited more for the traders that are starting to learn the craft.  This will give them a fair and equal playing field. It won't guarantee you being successful. But you won't be distracted or irrational because of how many trades you have left.

There is a lot more to trading than a good platform and being free of restrictions. Let's not forget that. A good trading foundation built on high probability basics is the quickest and safest way to profits. You stray from that you will be trading well under your capabilities.

I will leave with this for those who argue against me.

The FINRA rule is in place to "protect" the individual investor from himself. If a trader didn't have a large bankroll, he is more likely to be misled or become careless in the markets.

I guess we should place restrictions on people who go to Vegas and play blackjack and make sure we tell them how much and how often they can bet. Is there a double standard somewhere here?

Well that’s it for now.  I will follow up with post on the blog post on how SureTrader is working.

DayTraderRockStar

PS still feel unsure? Minimum balance is $500.00 and that gives you 3k buying power with no restrictions.

Sign up and mention DTR by September 30th and you get the Pro Platform with Level 2 for free for a month.