Gee, you think so? I never thought of that This would also explains my bad trading.....I am just plain dumb!
Interesting posts about taking a "shotgun" approach to trading and being both long and short at the same time. I was just reading about Mayer Offman from Carlin Securites and this is his approach to trading. A pretty interesting way to trade but one that takes a lot of capital. But on the flipside it's a great way to put one's capital to use. The name of the book is "Electronic Trading Masters" by Baird if anyone is interested.... Leland
Well I don't know about you guys, but I'm a Burger King manager making $6,000 a day on my minimum balance IB account. I check the markets every time the beeper on the fryer goes off.
May I ask a question here, I am very interested in this topic as to weather or not it trading for a living (assuming that you are at least an average to good trader) is viable. Some of you have posted, that it is possible to make modest gains and earn a good living. Say if you can make a few hundred bucks per day, and average say $640 per week. What are we talking about when you say 'make'? If you traded fairly often to make that $640 per week, how much are we subtracting out for commish? half? Now what about the taxes on what we made, probably close to 40% I believe. So if we subtracted the 40% ($256), plus about half of the $640 for expenses, data feeds, and commissions ($320), are we talking about a net profit of around $64 dollars for that week??? I apologize in advance, if my rationale based on the above is totally illogical. In fact, I hope I am totally wrong, because if I am correct it would seem that the viability of making a decent living as a trader would be quite difficult unless the trader is extraordinary... keop
I believe I speak for most traders when I say this. When I discuss what I make per week,day, or year I always discuss after commission profits. I trade at home and my expenses are fairly minimal, not really much more than if i just actively used the internet. My at home business expenses are less than i believe i would spend on that morning cup of coffee ( $3 at Starbucks ) and my afternoon diet Coke ( 1$ ). My at home expenses are approx $200 a month. Now as far as taxes, I am sure i pay the same or less taxes than i would pay at a job where i grossed the same as I do trading. The above question attributes 90% of gross trading gains to commission and office expense and that is just plain ridiculous. If i say i make $1000 a week or $5000 I am always talking about after commissions and before minor trading related expenses and I think anyone who has traded for any amount of time successfully quotes theirs the same way. AllenZ ( I always react poorly to this question )
Haven't you ever gotton a 1099 from a brokerage? Your tax liability is only on your net (after commision) profits.
If you make $50K trading net of commish per year (250 days x 300/day) your net could look something like the following. Monthly Office Fees: $300 x 12 = 3600 Annual business expenses (hardware, software, subscriptions, classes, misc expenses): 5K Net = 50K - 3.6K - 5K = 41.5K This would also be your taxable income. You would be taxed about the same as if you had a job working for someone else paying 41.5K except you don't have to pay half the FICA that an employee usually pays (7.5% or approximately 3.1K in the example above). If you trade futures you can get a much better tax deal than as an employee.