What happens when you flag a pattern day trader?

The moment your trading account is flagged as a pattern day trader, your ability to trade is restricted. Unless you bring your account balance to $25,000 you will not be able to trade for 90 days. Some brokers can reset your account but again this is an option you can't use all the time. Can you get in trouble for day trading? Day Trading?

What is a pattern day trader account?

If a trader makes four or more day trades, buying or selling (or selling and buying) the same security within a single day, over the course of any five business days in a margin account, and those trades account for more than 6% of their account activity over the period, the trader's account will be flagged as a pattern day trader account.

What happens if a trader is flagged as a PDT?

If this occurs, the trader’s account will be flagged as a PDT by their broker. The PDT designation places certain restrictions on further trading; this designation is put in place to discourage investors from trading excessively.

Who are self-identified day traders & pattern day trading violators?

Self-identified day traders: This includes folks who are actually day traders, meaning their brokerage is aware that they intend to day trade and that they meet the $25,000 minimum account value requirement. Pattern day trading violators: These are people who day traded in violation of the rules without meeting the sufficient capital requirement.