An account is considered a pattern day trader if activity results in 4 or more day trades over a 5 trading day period. A day trade is the buying and subsequent selling of an identical security within a single market day. If account equity is less than $25,000 as of the previous market day’s close, the account will be restricted from performing day trades. If account equity is $25,000 or more as of the previous market day’s close, the account will still be identified as a pattern day trader but day trade activity can occur as long as it does not exceed the account’s day trading buying power. For more information, please view the video below.