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Beginner Questions

  • #1
  • First Post: Feb 13, 2005 11:13am Feb 13, 2005 11:13am
I am new to Forex and have been doing some demo trading for about a month. I was wondering how Forex gains and losses are taxed. Are they taxed as short term capital gains or are they taxed as interest (gains and losses??)?
Also, my forex demo broker has been XpressTrade. Anybody have any experience with them?
Thanks.
  • #2
  • Feb 15, 2005 3:32pm Feb 15, 2005 3:32pm
Quoting gkariger
I am new to Forex and have been doing some demo trading for about a month. I was wondering how Forex gains and losses are taxed. Are they taxed as short term capital gains or are they taxed as interest (gains and losses??)?
Also, my forex demo broker has been XpressTrade. Anybody have any experience with them?
Thanks.
Hi gkariger,

The best source for US trader tax info is www.greencompany.com. Tons of free info on the site. I suggest you buy their 2005 trader tax guide.

I don't have any experience with XpressTrade, so maybe someone else will answer that question for you.

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  • #3
  • Feb 16, 2005 7:23pm Feb 16, 2005 7:23pm
yeah Green is the best out there for trader tax info. when you need an accountant and lawyer, they are great for that too.
Relax and be happy.
  • #4
  • Jan 5, 2006 1:10pm Jan 5, 2006 1:10pm
i've never heard of Xpresstrade. what has been your experience with them, just out of curiosity?
  • #5
  • Jul 18, 2017 9:51am Jul 18, 2017 9:51am
Although, I used multiple brokers service for my demo practice, but I have no experience with this broker! Actually, I used my one year properly for learning Forex trading! Then I started my live with micro then general live account.
  • #6
  • Jul 18, 2017 2:01pm Jul 18, 2017 2:01pm
Quoting gkariger
I am new to Forex and have been doing some demo trading for about a month. I was wondering how Forex gains and losses are taxed. Are they taxed as short term capital gains or are they taxed as interest (gains and losses??)? Also, my forex demo broker has been XpressTrade. Anybody have any experience with them? Thanks.
No experience with the broker you have. First time known this name, actually by using demo account I think it’s not possible to judge a broker , minimum you have to a micro account to see the performance how it works.
  • #7
  • Jul 20, 2017 3:38pm Jul 20, 2017 3:38pm
Quoting MarkFxAnde
{quote} No experience with the broker you have. First time known this name, actually by using demo account I think its not possible to judge a broker , minimum you have to a micro account to see the performance how it works.
Demo account generally is more appropriate to ensure the basic fundamental market experience which is very supportive to continue a live account in a proper way , but not appropriate to make sure brokers performance but shortly you can understand how the broker works.
  • #8
  • Jul 21, 2017 8:30am Jul 21, 2017 8:30am
Different countries have different laws. For example, in many places only the profits are taxed and no one would tax people for the losses.
  • #9
  • Jul 24, 2017 1:26pm Jul 24, 2017 1:26pm
Quoting BrendanHigg
Retail forex traders fall under Section 988, which covers short-term foreign exchange contracts like spot forex trades. Section 988 taxes forex gains and losses like ordinary income, which is at a higher rate than the capital gains tax for most earners. An advantage of Section 988 treatment is that any amount of ordinary income can be deducted as a loss, where only $3,000 in capital gains losses can be deducted. Section 988 gains or losses are reported on Form 6781.
You can opt out of Section 988 treatment and use the 1256 treatment to most likely get lower tax rates though. And you could carry over losses to future gains if you had little income for the year.
  • #10
  • Jul 25, 2017 3:23pm Jul 25, 2017 3:23pm
Quoting JamesFaulkn
{quote} Demo account generally is more appropriate to ensure the basic fundamental market experience which is very supportive to continue a live account in a proper way , but not appropriate to make sure brokers performance but shortly you can understand how the broker works.
Before large investments we generally open a demo account in a broker to see the performance how it works. But I have seen, after large investments brokers attitude changes sometimes that is not available in micro accounts.
  • #11
  • Jul 26, 2017 2:30am Jul 26, 2017 2:30am
Hello Everyone,

I would like to know some advice please. If I have 100k, I do not want to do day trading. I kind of want to do Monthly or yearly trading since i do not have much time. I would love to own stocks in the following companies. I have been doing research and following these companies below for the last 5 years, without investing, and reading up alot about these companies. So here is what I would like to invest.

1. P&G - 20,000 Worth of stocks
2. JNJ - 15,000 Worth of Stocks
3. Merck - 10,000 worth of stocks
4. Verizon - 10,000 worth of stocks
5. Pepsi co - 20,000 worth of stocks
6. Mylan stock - 5,000 worth of stocks
7. BP Stock - 5,000 worth of stocks

I want diversify and ONLY looking to JUST invest and keep researching in these companies and following these companies. I DO NOT want to get rich quick thing. I want to invest, keep an eye on the market, and Not trade daily but maybe once a month or once in few months, but keep building my portfolio if I keep getting the gains.


Whats your input guys? Please advice.
  • #12
  • Jul 26, 2017 12:05pm Jul 26, 2017 12:05pm
Quoting NoobRookie
Hello Everyone, I would like to know some advice please. If I have 100k, I do not want to do day trading. I kind of want to do Monthly or yearly trading since i do not have much time. I would love to own stocks in the following companies. I have been doing research and following these companies below for the last 5 years, without investing, and reading up alot about these companies. So here is what I would like to invest. 1. P&G - 20,000 Worth of stocks 2. JNJ - 15,000 Worth of Stocks 3. Merck - 10,000 worth of stocks 4. Verizon - 10,000 worth of...
I would say definitely put a portion into a long-term index fund no matter what. If it's a good index fund (SPY 500 for example) it's empirically evident that in the long run you will make money. Especially if you keep putting money into it when it's down (on sale) and just hold it. If you're investing in stocks with that kind of money make sure you're keeping up with the company on all levels including their financial situation, their management, financial statements ratios, earnings announcements, new products etc. Most of those you listed are sound companies, just keep up with them and buy them when their cheap.
  • #13
  • Jul 26, 2017 1:42pm Jul 26, 2017 1:42pm
Hi guys (and girls)

I can see many really valuable questions and replies in this thread and really hope that someone can assist me with a certain stop loss crisis I am experiencing. I started my Forex learning with Krill on ForexBoat who teaches to essentially look for a safe place to put a stop and then calculate the SL pips from the price. Then divide SL pips by 2% risk. Which I can do . I've just finished reading High Probability trading by Marcel Link who has a different take on this which I just can't quite fathom (pg 304) . He recommends taking the risk value and dividing it by the "dollar value of the ATR". He goes on to say he uses the last 14 bars of the daily ATR. I know how to insert the indicator to provide me with this value. So how does one calculate the monetary value of the ATR? This is where I'm stuck for a couple reasons most likely. Firstly, despite everything I've read I don't actually know how to calculate the pip value. I've read and watched videos which explain how to calculate it using volume sizes ( I know how to calculate SLpips/ risk = volume). But I'm embarrassed to say I don't know how to calculate a pip :? I' understand that this is also different for each quoted currency. I would be so grateful if someone can take the time to assist me.
  • #14
  • Jul 26, 2017 2:15pm Jul 26, 2017 2:15pm
Quoting JamesFaulkn
{quote} Before large investments we generally open a demo account in a broker to see the performance how it works. But I have seen, after large investments brokers attitude changes sometimes that is not available in micro accounts.
When it is time to invest a large amount we have to emphasis on broker regulation, after regulation system I will look for their despot and withdrawal system how it works. Most of the brokers right now are found to be scams. So, for ensuring a right Forex broker we have to be dedicated and have to pass enough time.
  • #15
  • Jul 26, 2017 4:45pm Jul 26, 2017 4:45pm
Quoting MarkFxAnde
{quote} When it is time to invest a large amount we have to emphasis on broker regulation, after regulation system I will look for their despot and withdrawal system how it works. Most of the brokers right now are found to be scams. So, for ensuring a right Forex broker we have to be dedicated and have to pass enough time.
You considered choosing a right broker is a difficult task , but according to me I don’t think so if you are active in Forex Forum communities in particularly FPA where real traders express their views about their brokers performance.
  • #16
  • Jul 27, 2017 3:40pm Jul 27, 2017 3:40pm
Quoting Banet
{quote} You considered choosing a right broker is a difficult task , but according to me I dont think so if you are active in Forex Forum communities in particularly FPA where real traders express their views about their brokers performance.
FPA is a good forum really than others we have. But honestly speaking I don’t believe blindly this forum than before. There is much spam post right now. So I lost interest
  • #17
  • Jul 27, 2017 4:18pm Jul 27, 2017 4:18pm
Quoting JamesFaulkn
{quote} FPA is a good forum really than others we have. But honestly speaking I dont believe blindly this forum than before. There is much spam post right now. So I lost interest
I am not agreeing, I have never found at any post that is really spam. It always helps me to find a right broker by the traders reviews as well brokers rating. If you have, please share more about with proof.
  • #18
  • Jul 28, 2017 1:26am Jul 28, 2017 1:26am
Well, right now I am doing live trading! But, in my learning session I used so many demo trading services from different broker! By the way, I have no experience with that broker! Since, it’s very old thread and I hope now you are a successful trader.
  • #19
  • Jul 28, 2017 2:25pm Jul 28, 2017 2:25pm
8 years old post but discussion right now 2017 done almost. Haaa haaa .lol
  • #20
  • Aug 2, 2017 11:17am Aug 2, 2017 11:17am
No, I have no experience on Options broker, because I am an active trader on only Forex industry! I seem, this is the most flexible one by comparing with others trading sector! In addition, I am not concern about tax issue!
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