With a cash account (no margin), let’s say someone want to make 1 swing trade per day, every single day using their full account balance.
Scenario:
$10,000 account
On Monday I sell $10,000 worth of AMZN to purchase $10,000 of AAPL
On Tuesday I sell all shares of AAPL to purchase $10,000 of TSLA
On Wednesday, I sell all TSLA shares to purchase $10,000 of GOOG
In this scenario, I would incur a good faith violation, correct? Because I used the proceeds of a sale to purchase another security and then sold the newly purchased security before the original funds used to make that purchased had settled? Or am I incorrect?
Most of my accounts are margin accounts, but I have 1 non-margin account that I am interested in doing this type of daily swing trading in and I'm trying to understand how good faith violations work and if this is possible without incurring violations.
Thanks!
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