Hi, I’ve just started to get involved in the possibility of trading the forex and i was looking for some advice and an answer to a question which i cannot seem to find the answer.
I’m looking at the possibility of eventually (goal is one year) to becoming a full time trader as i hate my job so much. Given that I need to earn similar to what I clear today. I need to know the following, do you pay income tax on any profit?. (I know on shares you pay capital gains tax but I’m not sure if it’s the same for currency) I’m from scotland so don’t know if it’s different from anywhere else.
I’ve been reading a lot of the posts and they virtually all recommend doing the school. (which i have started). The advice I’m looking for is when should one start the demo account? is it best to wait until completing the school? or do you advise that i open one now to familiarise myself with it.
I’m not sure about taxes in scotland on forex gains/losses. For the US, there’s 2 different ways forex is taxed. One 60/40 rule is that you you tax 60% at one rate, and then 40% at a higher rate or you tax it all as one rate. I don’t remember the specifics but there’s enough sites that detail it.
I think you should start demoing at the same time that you start learning. This way you can see try to identify similar chart patterns and such as you’re learning. You’ll want to demo for at least 6 months to make sure you can pull consistent profit.
After demoing for bit, open a small live account. The different between demo and live is HUGE because of the emotions on the line. FYI though - there are not actual differences in demo vs live just in the psychology.
Yes we have two different rates of tax but I still do not know if it applies to currency trading. you mention there a plenty of sites, can you please let me know of one.
Regarding the demo account. I actually learn things better by doing them, but did not want to get into thinking I was good, if I started to make pretend money, then thinking I could do it for real. (before I understood what I was actually doing)
My intention is to take this really slowly (so your suggestion regarding 6 months is spot on )and try and get a good grounding as I want to be able to do this long term. So again thanks for your advice.
The UK has tax-free spreadbetting, or if you trade through a broker, you’ll pay capital gains tax at 20%ish after clearing your allowance (about �8k)
If you’ve got �100k spare, bucket-loads of time and a sharp mind you might, just might be living off trading in a year’s time, but truth be told if you haven’t blown your account in 12 months time, you’re doing above average
I don’t think triphop’s point of view is unreasonble. Encouragement is good, but also giving straight advice is important as well.
First, what type of return do you think you can make. Are you really going to make 100%-200% every year, and consistently year after year? Or is 10-20% a more realistic estimate so that you don’t have to risk as much. From there what type of account balance do you need for your 10-20% return to equal your current income. Do you have that much capital to start with?
Not meant to discourage, just start planning.
And certainly check on the spreadbetting account. UK tax code allows you to trade currency tax free if it’s through a spread betting account. Though you need to be careful because I think there are some restrictions being a professional trader if you list trading as your primary source of income.
To give you a bit of background. I would like to work for myself, because in my current job, I’m doing on average 55 to 60 hours per week.
So my thought process is, if I’m willing to do that for my company why should I not put in the same effort for myself. Thats where the day trading came in.
I’m willing to work hard but I need to have a realistic expectation of what I could earn, whilst minimising risk.(hence the tax question)
Based on what I’ve read on the forum I would have to trade part time until I was getting consistent returns, and was confident in what I was doing. Which based on the forum, appears to be in excess of a year at least.
Plus I have a lump sum which I got from my previous job, but I certainly do not want to lose it all, so I’m taking this slowly and will continue to read the forums as it appears a lot of people have jumped right in too soon.
I think you should have some knowledge about the market and the platforms, how are they used and what you can do, once you understand that part start downloading diff demo to get practice. You shouldn�t use a demo if you have no idea what you�ll do in it, don�t you think?
This is a video that explains what ACMs platforms are about and what you can do in their platforms. See it as an intro if you wanna know what features the platforms have�
Easy tiger (minted)! I just wanted to inject a bit of realism around here. There are plenty of posters elsewhere giving the sugar-coated fantasy land version of events, can’t hurt to drop in the truth every now and then can it?
To the OP, it’s not meant to be discouraging. Just know the game you’re in, and don’t underestimate who and what you’re up against.
YES…you are quire right. If it were as easy as some say, we would all be at it!
I want to learn, correctly, but the start up capital some mention is crazy :eek: If i had a spare 100K lying around, I wouldn’t need to trade :o
BUT an injection of truth is welcome, and apologies to you and group
But how much % of your trading capital you expect to make? Let’s say you need 30k a year for your expenses, that’s already 30% of 100k. To get that consistently from the market every year is not an easy task at all.
100k seems like a good estimate. People get burned in forex because they fund their accounts with like 10k and think they’ll make a living out of it by making like 10-30% per month. Then, to make this much, they overleverage, overtrade, and continually readjust their stop losses when the market is going against them and in no time the account has vanished.
I couldn�t agree with you more! You just described perfectly!
Forex is about good management and restriction, and a good base to cover you from bad trades because lets face it, not all of them are a positive number
I think both statements are true! Reality should be in mind at all times, we are dealing with events of the real life and they are not predictable, so no strategy or trader will always be 100% successful, that is when a strategy plan and a money management plan come in use� when trading don�t forget that the money you are �planning� on making can go the other way� find a balance.
As I already said: open a demo!!!
You�ll be able to practice (open it in the amount you think of investing) and get practice of trading, also, you�ll see the volatility of the market that I mean�
Don go live until you FEEL ready, otherwise you�ll be to nervous and insecure and believe me, feelings while trading are not good
On the other hand, trading forex is sth you learn, there is no way you�ll never get to it, so be comfortable you�ll get there, you can do it: It is paying a little bit more attention to what you already see on the news.