This Rule applies to All accounts with less than $25,000
If you have less than the above figure in your account and your Broker is based in the U.S.A
then you are limitted on the amount of times you can trade per 5 day rolling period.
When you are under the PDT rule you can have 3 round trip trades within a rolling 5 business day period.
Meaning if you Buy 1,000 shares of any stock then you sell the same 1,000 shares in the Same day that counts as 1 complete round trip trade.
If you do the same transaction again, same day as mentioned above, then you have made 2 complete round trip trades, if you do it again, same day then you have used All your 3 round trip trades for the week and if you started your first trade on a Tuesday then your trades will reset Wednesday of the Next week, if your first trade of the week was on a wednesday then they would reset next week thursday, this is the part where the "rolling" comes in, it depends on what day you made your first trade for the week etc.
On another note, If you Buy 1,000 shares of any ticker and you want to sell portions at a time in the same day example 500 shares then another 500 shares each lot of 500 shares will count as a Round trip Trade (also depends on Broker) meaning that when you are done selling the last 500 shares you will have made 2 round trip trades! and only have 1 round trip trade left for the week! so Be careful with that.
How ever if you hold position until next day then you could even sell the shares in 100 lots at a time 100 then 100 then another 100 and so on until you sold all 1,000 and each time it wont count as a round trip trade At All !(depends on Broker) the Beauty of holding over night altho Risky.
With that Said, it is a good way to get Around the annoying PDT rule but risky but it works:
If you hold your position over night until the next trading day Then once you exit the trade it wont even count as a round trip trade At All.
HELP MY ACCOUNT IS FROZEN! I Triggered the PDT rule and now I cant trade until 90 days!:
Breathe in and breathe out stay calm lolyou shouldn't have been over trading and thus you went over your 3 round trip trades in your rolling week and now you have been flagged as a PDT rule violaton. What to do next?
Well if this is your Very first time triggering it then you can Call your broker, Explain it was done by accident and that you wont do it again, then they will require you to read some forms that explain the PDT rule and then after you are done reading them, your broker Can reset it so you can trade again like nothing ever Happened! ! !
Keep in mind that this wont be each time you do it, it only works if it was your first time triggering it. Also according to FINRA you can get it reset once every 180 Days! some brokers will try and lie to you or they are just simply misinformed about the FINRA rule ( or might just be a phone answering service/customer srvice not a trader at all) but you could get it reset again if it has been longer than 180 days since you last triggered it. Learn more here at this following Link
The PDT rule handicaps you as a trader Big time, it might even contribute to your loosing trades but on a positive note, it can teach you decipline how not to over trade and only looking for the ideal trades/patterns. Also it pushes you into thinking what the next day's price action might trade like, but remember you are to react to price action and not necessarily trying to predict it etc.