How to Become a Day Trader
- Felix La Spina
- Nov 21
- 4 min read
How to Become a Day Trader: US Accounts, Taxes & Rules (PDT Rule) Explained
Quick Answer
If you want to learn how to become a day trader, start by understanding the rules surrounding daytrading, especially the U.S. Pattern Day Trading (PDT) Rule.
To become a day trader safely, you must learn:
Market basics
How day trading stocks works
Account requirements
PDT rule & settlement rules
U.S. tax implications
Risk management
This guide breaks down everything beginners need to know — including legal requirements, trading tools, and simple steps for getting started.
What Is Daytrading?
Daytrading means buying and selling the same stock, ETF, or option within the same trading day.
Examples of day trades:
Buy Tesla at 9:45 AM → Sell at 11:10 AM
Short-sell Nvidia at 10:00 AM → Cover at 12:15 PM
FINRA definition of day trading: https://www.finra.org/investors/learn-to-invest/day-trading
Day trading includes:
Momentum trading
Breakouts & breakdowns
Scalping
Reversal trades
Morning volatility setups
Understanding this is essential before learning how to become a day trader.
How Day Trading Stocks Works
When you engage in day trading stocks, you’re trying to profit from small intraday price movements.
Successful day traders use:
Chart patterns
Volume analysis
Technical indicators
Market news
Earnings catalysts
Tight risk management
Because trades are frequent, small account traders must understand the PDT rule before placing multiple same-day trades.
Step-by-Step: How to Become a Day Trader
Here is the simplest, safest beginner roadmap.
Step 1 — Learn the Basics First
Before risking real money, you MUST understand:
Market structure
Price action
Candlesticks
Order types (market, limit, stop)
Bid/ask spreads
Volatility
Start with the StockEducation Free Course:https://www.stockeducation.com/courses/stock-education-free-course/
Once you’re comfortable, move on to advanced training: https://www.stockeducation.com/courses/stock-education-ai-powered-investing-courses/
Step 2 — Choose the Right Account Type
You have two choices:
✔ Cash Account
No PDT rule
You can day trade freely
Limited by settlement (T+2)
✔ Margin Account
PDT rule applies
Must maintain $25,000 if you want unlimited day trades
More flexibility, higher risk
Which is better? Beginners usually start with a cash account because it avoids PDT restrictions.
Step 3 — Understand the PDT Rule
The Pattern Day Trading (PDT) Rule applies to margin accounts.
You are flagged as a PDT if you execute:
4 or more day trades
Within 5 business days
AND they represent more than 6% of your total trades
Source (FINRA Rule 4210): https://www.finra.org/rules-guidance/rulebooks/finra-rules/4210
Once flagged, you must maintain:
👉 $25,000 minimum account equity
If you fall below $25k, your account can be restricted for 90 days.
This rule is the #1 thing new day traders accidentally violate.
Step 4 — Choose Your Brokerage
Popular platforms include:
Robinhood
Webull
Fidelity
E*TRADE
Interactive Brokers
Most brokers offer:
Paper trading
Real-time quotes
Charting tools
Mobile and desktop platforms
Step 5 — Learn to Use Research Tools
To find daytrading setups, you need stocks with:
High volume
High volatility
News catalysts
Momentum
Use StockEducation tools:
⚡ US Stock Screener with AI
www.stockeducation.com/us-stock-screener-with-ai/
⚡ AI New Stock Analyzer
www.stockeducation.com/ai-new-stock-analyzer/
⚡ Advanced Charts
www.stockeducation.com/advance-charts/
⚡ ROI Calculator
www.stockeducation.com/roi-calculator/
These tools help you understand whether a stock is worth day trading.
Step 6 — Practice Before Trading Real Money
Paper trading lets you learn:
Timing
Execution
Risk management
Discipline
Without losing money.
Spend at least 2–4 weeks practicing before going live.
Step 7 — Start With Small Positions
When you begin day trading stocks:
Start with very small sizes
Use stop losses
Focus on one or two stocks
Trade only the best setups
Avoid overtrading
Day trading is not about frequency — it’s about quality.
Step 8 — Learn Risk Management
Every professional day trader follows strict rules:
✔ Never risk more than 1–2% of your account ✔ Use stop-loss orders ✔ Avoid trading low-volume stocks ✔ Don’t trade earnings blindly ✔ No revenge trading
Risk control is more important than strategy.
Step 9 — Track Your Progress
Use a trade journal or the AI Portfolio Learning Tracker to monitor improvement: https://www.stockeducation.com/ai-portfolio-learning-tracker/
U.S. Taxes for Day Traders
If you want to know how to become a day trader, you must understand taxes:
1. Short-Term Capital Gains
Profits from trades held under one year are taxed as ordinary income.
2. Wash Sale Rule
You cannot claim a loss if you rebuy the same stock within 30 days.
3. High Frequency = More Tax Forms
More trades = more reporting complexity.
Always consult a licensed tax professional.
Common Mistakes Beginners Make
❌ Overtrading ❌ Trading with emotion ❌ Ignoring PDT rule ❌ No risk management ❌ Trading with unsettled cash ❌ No stop-losses ❌ Going “all in” on volatile stocks
Understanding these mistakes early will save thousands long-term.
Pros & Cons of Becoming a Day Trader
✔ Pros
Fast learning curve
High potential income
No overnight risk
Flexible schedule
Perfect for active learners
❌ Cons
High emotional stress
PDT restrictions
High short-term tax rate
Large losing streak potential
Requires strong discipline
Paid & Free Education Resources
✔ Free Stock Market Course (Beginners)https://www.stockeducation.com/courses/stock-education-free-course/
✔ AI-Powered Investing Course (Advanced Training)https://www.stockeducation.com/courses/stock-education-ai-powered-investing-courses/
Both CTAs included consistently as you requested.
The Golden Rule
Learning how to become a day trader requires more than fast clicking — it requires patience, discipline, rules, and education.
Master:
The PDT rule
Risk management
Market structure
Settlement rules
Emotional control
When you understand daytrading from the foundation up, you protect your account, your money, and your future.
Smart day traders survive. Educated day traders thrive.
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