Well folks, here it is… I could have made a lot more had I waited but I decided to take the sure bet and run with it…
Now I have made over 60k since Jan. 1 of this year.
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The tax man must love you
This thread is very inspiring even for a beginner with smaller capital… I have realistic goals. It’s nice to see someone making decent returns and also showing the drawdowns! Greatly appreciated!
Carlos, that’s a great point about taxes. I have already posted about taxes but let me answer it for you anyway. First of all, by the regulations of the Canada Revenue Agency (CRA), forex income is considered as capital gains. Therefore, for Canadians, only 50% of all capital gains income is taxable. So for example, if I were to earn 100k through my forex trading, I would only be paying tax on 50k of it. Second, for the past couple of years, I have been closing some losing trades for losses right at the end of the year. That way I have either broken even - no gains and no losses - or in the case of this past year (2018) I took a loss of about 45k on the books. Yup, on December 31, only a couple of hours before the market closed for new year’s, I dropped 131k in trades! It was to clean up my portfolio, avoid paying any tax, and being able to carry forward 45k of tax-free income in forex for 2019! In other words, I had about 90k in profits until I chose to close 141k in losers. It stung for my balance but my equity remained about the same and was a good move for the reasons mentioned.
You see, my income is - according to the CRA - all trades that I have closed in a calendar year. One of these years, either 2019 or 2020, I am looking to have big gains and possibly get out of forex all together. Once again, I am a Canadian living in Canada at the moment. My entire account is in USD. As soon as I choose to draw some or all of the money from this account, I have the option to flip into CAD. If I did that today, I could add about 33% to that total. The taxes in forex are far lower than in the real employment world. In fact, it is one of the advantages of forex trading.