Roadblock

[yalgaar 40]

I have experienced a Roadblock on my path of learning and growing. I would appreciate any suggestions or ideas to clear this block.

So I subscribed here and instantly realized that this is an ocean of knowledge and information which is must to pursue any real Options trading results. So I just read and learnt as much as I could for several weeks. 

I opened account with TOS and started paper trading the official trades. Only Hedged Straddles for now. I soon realized paper trading is completely useless for me. It may be useful for someone who is a complete beginner in Options trading ( I am not) I know about most trading strategies and legs and greeks and stuff...I just never figured out a consistent way to profit thought. I reason I said paper trading is useless is because the fills are not real. You can very easily get filled in paper trading on TOS but you would never get those same prices in real.  I can easily make 100% everyday on Paper Trading! 🙂 I also contacted the their support but that didn't get anywhere. 

That was all about why Paper Trading was not a way...so I deposited $1000. I didn't want to invest real money until I actually understood all dynamics of the trades we take but I had to make that call. My bad luck, the first trade I took was a loser! I believe the last 6-7 trades before the one I took were all winners. 🙂 It does hurt your confidence when that happens. Now TOS will not let me trade anymore. Some day-trading limitations having to do with $25000 balance. I am really not ready to invest $25000 into something that I am don't clearly understand 100%. But I don't want to stop here.

Please suggest how do I proceed from here?

Edited May 22, 2020 by yalgaar

[Kim 7,943]

There are two ways to fix this.

1. Ask them to reset the day trading limitation. I believe you are allowed to do it every 180 days or so.
2. Deposit $25k but don't trade all of it. Start with $10k (our model portfolio size) and keep the rest in cash till you feel more confident.

As a side note, you are correct regarding fills on paper trading, but this is not the goal. The goal is to get comfortable with broker platform, structuring and executing the trades etc.

[yalgaar 40]

4 minutes ago, Kim said:

There are two ways to fix this.

1. Ask them to reset the day trading limitation. I believe you are allowed to do it every 180 days or so.
2. Deposit $25k but don't trade all of it. Start with $10k (our model portfolio size) and keep the rest in cash till you feel more confident.

 As a side note, you are correct regarding fills on paper trading, but this is not the goal. The goal is to get comfortable with broker platform, structuring and executing the trades etc.

Is our trading considered as day trading? I read the FINRA definition and its just confusing to me. TOS just told me they have removed the flag on my account but put it back if they see me as a pattern day trader. 

If this is the case, I guess the only option would be to deposit 25K. I just didn't want to go that route until I was confident about certain things. 

[Kim 7,943]

5 minutes ago, yalgaar said:

Is our trading considered as day trading? I read the FINRA definition and its just confusing to me. TOS just told me they have removed the flag on my account but put it back if they see me as a pattern day trader. 

If this is the case, I guess the only option would be to deposit 25K. I just didn't want to go that route until I was confident about certain things. 

No it's not. Probably something that you did. Did you open and close some trades on the same day?

But 1000 is way too low to trade our strategies anyway. 

[DubMcDub 123]

"Pattern Day Trader" in the U.S. generally means that (1) you bought and sold (or sold and bought) the same security within a single day, and (2) that you did this at least four different times over five business days. 

[yalgaar 40]

1 minute ago, Kim said:

No it's not. Probably something that you did. Did you open and close some trades on the same day?

But 1000 is way too low to trade our strategies anyway. 

I did open and close something due to a human error situation. I guess that is why it got flagged. Thanks for confirming.

I had decided on $1000 since I was going to only trade the Hedged Straddle and nothing else because that is what I have spent most of my time learning.I guess I will just have to re-think on how I want to proceed now.

[yalgaar 40]

Just now, DubMcDub said:

"Pattern Day Trader" in the U.S. generally means that (1) you bought and sold (or sold and bought) the same security within a single day, and (2) that you did this at least four different times over five business days. 

I sure did buy/sell on the same day due to human error that need to to be fixed. But I sure didn't do this 4 times in 5 business days. Thanks for the details.

[DubMcDub 123]

6 minutes ago, yalgaar said:

I sure did buy/sell on the same day due to human error that need to to be fixed. But I sure didn't do this 4 times in 5 business days. Thanks for the details.

It's possible your brokerage has their own "house" rule about it and flagged you for doing it just once. That's a bit unnecessary by them IMO, but I guess it's their prerogative. 

Edited May 22, 2020 by DubMcDub

[TrustyJules 3,212]

11 minutes ago, yalgaar said:

I sure did buy/sell on the same day due to human error that need to to be fixed. But I sure didn't do this 4 times in 5 business days. Thanks for the details.

TW counts any day trade as a flag - I have 11 outstanding at the moment and the only reason it doesnt block my account is that I have >25,000. The 4 times in 5 business days will really block your account - for the moment they released it for you. Dont do it again and you'll be fine.

[TrustyJules 3,212]

35 minutes ago, Kim said:

The goal is to get comfortable with broker platform, structuring and executing the trades etc.

This is really important - in the beginning the complexity of the trades together with not quite getting the platform can screw your trades right up. The paper trading is good to help resolve that even if it cant ever be a real substitute for the actual trade.