• Online trading rules are the same as traditional trading rules.online image by dinostock from Fotolia.com
  
  Stock trading rules established by the Securities & Exchange Commission (SEC) and the Federal Reserve Board apply to both online trading and more traditional trading through a broker or adviser. Online traders who don't know the rules, particularly the rules surrounding trade settlement, can commit trade violations if they don't pay for their trades on time and according to the rules. For example, stock trades take three business days to settle, a rule that online traders can easily overlook.
  
  

Freeriding

• When you purchase a stock in an account with insufficient cash or equity and then sell that security without depositing enough funds to pay for it, you have committed a "freeriding violation." As a consequence, your brokerage firm must restrict your account for 90 days to "settled-cash-up-front." This means you can't buy stocks unless settled cash is already in your account.
  
  

Good Faith

• When you sell a stock in an account with insufficient cash or equity, use the proceeds to purchase a second stock, then sell the second stock before the first stock sale has settled, you have committed a "good faith violation." In this case your brokerage firm is not required to restrict your account to settled cash on the first violation, but might choose to do so if you have made other trading violations. The rules allow you to request a one-time exception to the settled-cash-up-front restriction.
  
  

Liquidation

• Your brokerage firm can restrict your account to settled-cash-up-front.payments image by Valentin Mosichev from Fotolia.com
  
  When you buy a stock with insufficient cash or equity and then sell another security after the purchase of the first stock to pay for it, even if the second security settles in fewer than three business days as mutual funds do, you have committed a "liquidation violation." As with the good faith violation, your brokerage firm is not required to restrict your account on the first violation. Upon your fifth violation, your brokerage firm must permanently restrict your account to settled-cash-up-front.
  
  

Pattern Day Trader

• Your brokerage firm must flag your account as "pattern day trader" if your trades fit a certain profile. Financial Industry Regulatory Authority (FINRA) rules define a day trade as the purchase and sale of a security on the same day. If you make four day trades within five trading days, and if your day-trading activity exceeds 6 percent of your total trading activity for the period, your brokerage firm must flag your account and require that you maintain at least $25,000 in equity at all times. Your brokerage firm will remove the flag if you promise not to day trade.
  
  

Wrong Account

• If you make a mistake, ask for help.wrong way sign image by Aaron Kohr from Fotolia.com
  
  You won't get into trouble if you accidentally place your trade in the wrong account. But if you make this mistake don't try to fix it yourself, since this could lead to one of the trading violations described earlier. Your brokerage firm can easily cancel the trade placed in the wrong account and bill it to the correct account at no cost to you, so be sure to call for help if you need it.