[JLJ]

Hi everyone, so glad I found this place.
We just started a month ago doing 'practice trades' in Yahoo Finance (not the same as paper trades, I guess - for one thing, you can set a stop loss order, but if for a millisecond the cost drops to that level, you may not see it so you think you're still in the game). We did very well even as newbies, with "day trading" stocks and ETFs including inverse ETFs.

We thought we were ready to do it for real so we called Fidelity to ask if you could day trade in an IRA and the rep said "Yes, people do it all the time." We did our first day of trading, staying of course within the limits or our account - and 2 days later we got a letter from Fidelity that we were suspended for 90 days because we violated the free riding rule! Perhaps if we had a margin account (as opposed to a cash account) this would not have happened?? I'll freely admit that I'm new to this (I didn't know that trades take 3 days to settle - don't laugh) but it seems odd that the rep at Fidelity whom we spoke to, didn't mention this.

So I've been researching and it looks like people generally advise you against day trading in an IRA. But if you do, you need a certain type of IRA that's offered by IB - we should probably never have done any day trading in our Fidelity IRA.

But the larger question (don't tell me about the risks of trading with our retirement funds, I know all that) is that I've read that the only way day traders can avoid losing all their gains to wash sale taxes, is to day trade in an IRA.

So I don't know what to think. Any advice would be greatly appreciated!