That's incorrect. FX trading does qualify for the 60/40 benefit.
http://www.greencompany.com/EducationCenter/GTTRecCurrency.shtml#futuresmag
10 Pips Per Day - Everyday
- Thread starter Trader200K
- Start date
http://www.greencompany.com/EducationCenter/GTTRecCurrency.shtml#futuresmag
Someone relying on $20 books to trade FX argues with people actually trading it... 
Will give you a titbit forex-forex:
drop all this crap: books, indicators etc... Leave just bar price chart of your timeframe of choice and watch it real time until you see repeating things. Watch it for several hours every trading day or if you can't watch through many different charts on weekends (not only FX, stocks, indexes and every other trading instruments are just fine).
Then apply good money management to it (risk 1% per trade with preferably at least 1:3 risk/reward), stop placement (statistical or using natural levels) and practice a lot...
After about 3 years you'll see that average of 200 pips a month per pair is not that unrealistic as you think. Maybe earlier (probably I am dumb and thats why it took so much time for me to drop all the books/indicators crap and start to just watch price every day many hours a day)...
Good luck!
Will give you a titbit forex-forex:
drop all this crap: books, indicators etc... Leave just bar price chart of your timeframe of choice and watch it real time until you see repeating things. Watch it for several hours every trading day or if you can't watch through many different charts on weekends (not only FX, stocks, indexes and every other trading instruments are just fine).
Then apply good money management to it (risk 1% per trade with preferably at least 1:3 risk/reward), stop placement (statistical or using natural levels) and practice a lot...
After about 3 years you'll see that average of 200 pips a month per pair is not that unrealistic as you think. Maybe earlier (probably I am dumb and thats why it took so much time for me to drop all the books/indicators crap and start to just watch price every day many hours a day)...
Good luck!
Quote from Trader200K:
......I split about half my total equity between CAD and AUD cash forex in early April.....
T200K
Beautiful work, I bet you wouldn't mind doing that a couple of times a year (well except for the what happened after that of course!)
Automation isn't something I have very much experience of, I attempted a while back to use Metatrader EA's (Expert Advisors) to scan charts for potential set-ups but gave up in the end as I couldn't translate my trade criteria into mql. Metatrader could be worth looking into, it's very versatile but might be a bit too basic for you.
Long term, short term, it's a dilemma for sure. From a profit perspective I think they're comparable with intraday perhaps having the edge as stops are tighter so trades can be larger, I guess it depends on how much time you want to dedicate to trading.
Not much help at all really, sorry!
.....just as a follow up to my last post (edit time ran out!)
You have years of experience behind you and were obviously very successful, any advice I could offer seems a little inadequate somehow!
You have years of experience behind you and were obviously very successful, any advice I could offer seems a little inadequate somehow!
Quote from CFerret:
Someone relying on $20 books to trade FX argues with people actually trading it...
lol, I was just thinking the same thing!
By the sound of it I did pretty much the same as you at the start, at one time there were so many indicators on my charts it was hard to see price! I'd read more or less every book ever written about trading forex, tried every lagging indicator with hundreds of different parameters, and traded every strategy I found on the net!
2 years and several blown accounts later (I was stubborn and dumb!) I dumped the lot and ended up wondering how I was managing to make consistent profits with such a bare looking 15m bar chart!
TraderKGB:
I appreciate your challenging my statement about tax rates on cash forex. It would not be the first time IRS rules were unclear and unfairly damaging to our family's wealth.
Question: Is holding Aussie or Loonie Cash Dollars in my IB account viewed by the IRS as being the same as "Section 1256 Contracts"?
Green's Tax comment:
====================================================
To âelect outâ of IRC section 988 or not, thatâs the question
If you have cash forex trading gains, you will prefer to elect out of IRC section 988 to benefit from up to 12-percent lower tax rates on Section 1256 contracts.
====================================================
I was under the assumption that just holding cash denominated in a
foreign currency (cash forex) was not a "contract". Maybe somehow it is?
I owe you dinner and beers if this is correct!
Best Regards,
Bruce
I appreciate your challenging my statement about tax rates on cash forex. It would not be the first time IRS rules were unclear and unfairly damaging to our family's wealth.
Question: Is holding Aussie or Loonie Cash Dollars in my IB account viewed by the IRS as being the same as "Section 1256 Contracts"?
Green's Tax comment:
====================================================
To âelect outâ of IRC section 988 or not, thatâs the question
If you have cash forex trading gains, you will prefer to elect out of IRC section 988 to benefit from up to 12-percent lower tax rates on Section 1256 contracts.
====================================================
I was under the assumption that just holding cash denominated in a
foreign currency (cash forex) was not a "contract". Maybe somehow it is?
I owe you dinner and beers if this is correct!
Best Regards,
Bruce
CableTrader:
I did trade stocks for a long time, but acutually this is only my first full year of doing currencies. I have to admit that it really was more luck than brains on the April trade. The big Nov drawdown proved that to me ... LOL. I have a long way to go ... again.
The GreenCompany tax post that KGB dropped to us is a very good read for those doing forex. It is about the best 'tax consequence' site I have seen for traders. My past taxes were really a major waste of time to prep. By moving to futures I got rid of all that by design...along with analyzing individual company/portfolio building. Give me pure risk. Simple is better by far.
From the looks of it, the IRS must be behind the curve (imagine that) on enforcing taxation reporting rules on cash forex gains since broker reporting is not required (yet). As Green puts it ... "we have to be our own Sheriff" ... for taxes.
Imagine the massive interest and penalties that the IRS is going to sock folks with once they get around to it.
Ouch!
T200
I did trade stocks for a long time, but acutually this is only my first full year of doing currencies. I have to admit that it really was more luck than brains on the April trade. The big Nov drawdown proved that to me ... LOL. I have a long way to go ... again.
The GreenCompany tax post that KGB dropped to us is a very good read for those doing forex. It is about the best 'tax consequence' site I have seen for traders. My past taxes were really a major waste of time to prep. By moving to futures I got rid of all that by design...along with analyzing individual company/portfolio building. Give me pure risk. Simple is better by far.
From the looks of it, the IRS must be behind the curve (imagine that) on enforcing taxation reporting rules on cash forex gains since broker reporting is not required (yet). As Green puts it ... "we have to be our own Sheriff" ... for taxes.
Imagine the massive interest and penalties that the IRS is going to sock folks with once they get around to it.
Ouch!
T200
Well I certainly hope it is correct.
If you're not able to get a definitive answer from Green Accounting (did you try emailing them?), there's another avenue. Here's the Tax thread on FF's forums. Jim Crimmins, pres of Traders Accounting, is the active support moderator. He'll answer any questions posted to the thread.
Thanks for the information. I am just starting to look into spot forex, and I was wondering about tax treatment.
It is my understanding that the Commodities Futures Modernization Act of 2000 (CFMA) started the forex boom. The Frankwell Bullion case clearly established that the CFTC has jurisdiction over forex, and the CFMA seems to indicate that the intent of Congress. It would follow that forex should be regarded a form of futures. I seem to recall that spot forex is actually a forward contract, which looks a lot like a futures contract anyway.
I checked the CFTC Web site and most of the information there pertained to forex scams which seem to be rampant just now. It sounds like it is out of control. Here are some links:
http://en.wikipedia.org/wiki/Forex_scam
http://www.cftc.gov/newsroom/generalpressreleases/2007/pr5332-07.html
http://www.cftc.gov/customerprotection/fraudawarenessandprevention/forex/index.htm
www.nasaa.org
www.nfa.futures.org/basic
[rwk]
One of the few benefits of living in the UK is spread betting, free from capital gains and income tax!