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Feels like easy money - Quite often Addicted to it - Unfortunately, yes. Regret it - No. It keep tabs on my "progress" daily, and despite some spectacular losses, it has always been 3 steps forward and 2 steps backward for me. My overall P/L looks great over four plus years despite the...

My guess is IB's customer profile is radically different than your typical forex retail customer profile. Average account size at IB is ~ $120k (per their annual report) and their whole approach to handling forex transactions is different than the bucket shops many use. Spreads, as well, are...

I think this is the right approach but be sure to use the adjustment codes the IRS provides for form 8949. There are a few like T and W but I can't remember all of them or exactly what they're for. It's in my tax software (Taxactonline.com) so must be in the IRS instructions. Clarify with...

Yes IB makes money on this. But their current USD margin rate for a small negative balance is 1.62%. I also have an account at E-Trade and their USD margin rate for a small negative balance is 8.44%. So I never complain about IB's rates.

Let me give you some simple example that works for me, even though most of my trading involves cross currencies (i.e. don't involve USD). + Beginning year cash in foreign currencies (valued in USD) = $5000 + Year end cash in foreign currencies (valued in USD) = $2000 + Foreign currency...

Sometimes you get a positive carry trade (i.e. make money by holding a currency pair). For example, if you've got a decent long position in AUD.USD, you're interest earned at IB will exceed your interest expense even if you borrow all the USD. In theory this affects the value of the currency...

I would report it on Line 1 of form 6781 on a row separate from your futures gain. You'll potentially have two issues. 1) Broker didn't report anything so you'll need to be prepared to document the reported loss. IRS never came back to me when I did the same. 2) You're reporting the...

Robert - On a related subject: Do you find that many brokers handle reporting of forex transactions like IB does? They don't consider them section 1256 transactions and don't report anything related to forex trades on the 1099s. When I asked about this they suggested I review IRS...

Very simple. You buy one currency with another currency. Later you reverse the transaction. If you've done it right, you earn money. For example, buy 1000 Euros when the rate is 1.30 Euros/$ and you'll spend $1300. If you sell your Euros when the rate is 1.31 Euros/$ you'll get $1,310...

I am a trader but when asked what I do I say I'm retired.

Various "adjustment codes" are provided to change the broker reported basis on your return. I plan to add a column to the detail transaction report I will attach to my return to include the adjustment code. The IRS will be able to see which specific transactions I am adjusting. As is always...

I spent quite a lot of time sorting all of my sales transactions by security and comparing it to IB provided details. The problem I'm noticing is when I only sold a portion of my shares. For example, if I: Bought 100 shares XYZ @ 10, then Bought 100 shares XYZ @ 20, then Sold 100...

Let us know the highlights when you get them.

I was in TWS and asked for my account statement. It opened an Internet window and displayed a notice about IB forex trading that I had to acknowledge before I could continue. So I don't know where they have the notice posted.

Interactive Brokers has released data showing the percentage of their customer accounts that have been profitable trading forex. The data for 2011 shows that they had about 45k retail forex accounts at the end of last year. The percentage of accounts that were profitable were 40.4%, 38.8%...

Not true. If, for example, you have the high bid of 10.00 at ECN X and the high bid at ECN Y is 9.99, it's possible that someone will sell shares by directing a market order to ECN Y. Your order will remain unexecuted despite offering a better price. This is more likely to happen in a thinly...

I use software at taxactonline.com to do all of my tax reporting. It's a free service that I first learned about from the IRS. I can't say it's better than Turbotax or the other packages out there but it works for me. I enter forex P/L as a single line entry in the Federal Q&A > Investment...

This doesn't sound like good advice. Your reported forex P/L isn't/shouldn't be dependent on whether or not you have a gain or loss. The facts of your situation should determine your accounting. My first year trading forex I had a loss, and consistent with my statement above, I split the...

You should have either sent it via UPS since they provide $100 insurance in their base rate or insured your USPS shipment. But having said that, it probably will show up at some point. While there's a small chance it actually was stolen from USPS, most likely it got stuck in an overlooked bin...