Hedge Take Profits to avoid paying taxes

Picture this...

Swap free broker...

Instead of closing your TPs, use a full hedge to freeze the equity in those winning positions. Go ahead and close all your losing trades so that you can write off the losses on your taxes (along w/ the commissions you paid) at the end of the year.

Then you realize no gains for the year, and can compound through the following year without paying taxes until you close all winning hedged positions.

The only problem would be margin requirements, so high leverage would be required.

Any thoughts on this idea?

Was thinking about this idea in the shower just now...

Would be very practical for low frequency traders that take swing positions (weeks or months at a time)... High frequency would build up too much of a margin requirements.

The one good thing about closing the stop losses is that it does free more margin, and lets you write those losses off.

So at the end of the year, you will show only losses, while your profits remain unrealized. On January 1, you can close all the hedges and use those profits for compounding into the next year.