If you have a corporation you don't claim trader status, that is the point. Just having a corporation allows you to take all the deductions regardless of how you trade.
The only reason to incorporate your business as a subchapter S or an LLC is so that you can draw a pension plan. This is a huge reason for profitable traders. You can put 44K out of your first 220K in earnings, or 20 percent of what you earn and put it in a taxed deferred plan...and then trade it...tax free...until it grows so big you can't spend it all If you net over 220K, you can hire your wife and pay her the next 176K in salary and then contribute 44K to your pension plan on her behalf. So you can contribute 88K per year and just imagine how fast it compounds if you are a good enough trader to make that kind of dough in the first place (remember it is tax free and expense free as well). Even if you are making a much more modest living as a full time trader, without incorporating you won't even be allowed to make an IRA contribution. If you are going to be in the trading game for the long run, sooner or later you will incorporate and you will form some kind of pension plan to save money tax deferred.
If you open up any company and the IRS agent deems it as a hobby...you screwed...progers is correct...
You are going about it wrong, you form a corporation that acts as a management company for trading accounts. It manages your account and charges you a fee for it. Then all deductions flow through the corporation. You make the corporation show a profit too, that way it cannot be deemed as a hobby.
This would only work if you happen to have found a sufficently stupid broker. Any sensible broker would track credit-worthiness, especially in the case of a corporation.
I think as long as you can show an intent to make a profit, it is not a hobby but you should make the corporation show a profit to be safe. I've heard stories of people setting up a corporation to teach people how to hunt. They deduct all the hunting equipment (guns, four wheelers, and stuff) and then go around town put up flyers advertising their business. You have to love corporate America haha.
if you are doing business with the public, by all means and entity is the only way to go due to the fact of law suit liability. but in trading, 99% of all fcms have such strick risk controls built into their trading platforms that very few would be allowed to have a catastrofic loss. so the need for an entity is not as critical.