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Thank you for the great video ICT. I took extensive notes, and am excited to add this tool to my traders toolbox.
oopsâŚsaw 40 month and thought 4 years or 48 months.
So back to what I initially thoughtâŚthis anaylsis doesnât take into account income taxes. To get it to 1MM considering taxes, itâs 48 months.
Generally, taxes add about a 20% extension to achieve the goal. (from 40 to 48 months)
How do u get 40% taxes?
when you make enough money, youâre in the 39% tax bracket, rounded off, itâs 40%
Week Summary 12/1/2011:
Weekly Stats: 2 wins, 0 losses, 3 ties. Made net 67.5 pips and 2.9% ROE. For the last seven weeks Iâve netted 470 pips and 16.1% ROE, with an overall trade record of 27-11-12. My current goal is to compound 6% per month / 1.5% per week, per one of the early ICT videos, and Iâd like to make 40-80 pips per week. More importantly (as I hope to some day do this professionally) Iâm trying learn to trade more efficiently and intelligently.
Although my numbers are fairly positive, and while there has been some luck, and like in other activities, trying to do little things correctly, helps one to create the environment for luck to occur. However, as I had not taken advantage of the opportunity to get educated and utilize SMT, COT, (also interest rate overlays), there are clearly several things that I should be doing much better by this point, including:
-trades where Iâve not managed risk by taking some profit and bringing SL to 0.
-not letting some trades run longer to maximize profit.
-missed a couple of great opportunities by not listening to myself.
-Iâve been very lazy about adding SMT COT and other tools like the rate overlays to my toolbox.
I must put in the effort to work smarter, so I that can enjoy being lazy and not have to work harder.
This week I sat in on great webinars by ICT and Jay, and took notes from the COT video ICT posted last night. Really good thread conversations this week about SMT, taking profit, etc - thank you to everyone. Enjoy the second day of ChrsitmasâŚ
My understanding was that under section 1256, 40% of forex earnings were taxed at the short term capital gains rate of 35% and 60% of earnings at 15%, the long term capital gains rate. For a total rate of 23%. Is that not true? I didnât think that forex earnings had a progressive taxâŚlike income tax has, which it sounds like you are referring to. No?
Start that $1000.00 in a TFSA. Then you donât pay taxes period. (Canada Only)
28% federal income (for large gains) and can go up to 35% if you start making 350K or so more in gains and 10% state. (Living in MD with local county taxes).
My example was assuming continuing working normal job while tradingâŚso it would be extra income and taxed at my marginal rate without any benefit or progrissivity.
Spot forex OTC traders pay ordinary income rates. Only futures/options traders get the 60/40 treatment.
I didnât think forex was considered incomeâŚ
Great video, very organized looking forward to tomorrow
One question, in previous videos ICT told that the gu/eu is very bearish. GBP commercials extreme net short position is somewhere around -66 and until that we are on the buy program. Eur has a very similar look in the COT department. From beginners perspective it looks rather like the long term low in formation.
So folks where do we stand with the COT?
Thanks Michael great explanation & I like the illustrations.
Itâs not, itâs considered capital gains. And trading in forex would almost certainly mean all your gains are considered âshort term capital gainsâ which are taxed at normal income rates.
If you held more than 12 months, you could get LT gain treatmentâŚbut who would hold that long.
CG taxes donât pay FICA taxes, onlg capital gain (or income)
Good afternoon everyone. I was curious if anyone had shorted the cable today? I was on the other side of the trade today and bought at 1.5670 based on market flow on the daily, 1 & 4 hr charts. I was looking for a retest of yesterdays high. The pair found resistance in the area of MR1,todayâs London highs, and what would have been the optimal sell area b/t the 62% & 79% retracement levels, and then fell off. I was able to get 40 pips out of my trade, which I am more than happy with, just curious if anyone took the short at the area I just mentioned.
Also, gotta love how it fell to a previous area of support / resistance almost perfectly.
Would love to get some feedback from you guys. BTW have a great weekend everyone!!!
Iâm pretty sure you CAN file under the 60/40 rules of section 1256 for spot forex, at least according to the info I have foundâŚ
âForeign currency futures contracts on U.S. exchanges are reportable on Section 1256 with lower 60/40 tax treatment. Conversely, all forex contracts are subject to Section 988 ordinary gain or loss treatment by default. Traders, but not manufacturers, may file an internal election to âopt outâ of Section 988 (the âcapital gains electionâ) into capital gains and loss treatment. With that capital gains election, forex forward contracts in major currencies are treated as Section 1256(g) capital gains and losses with the lower 60/40 tax treatment.
It is our belief that spot forex is treated as a forward if the taxpayer closes out the position. Therefore, we often advise reporting forex spot contracts in major currencies on Section 1256(g), after a capital gains election has been duly made.â
I have to say, we are lucky in the UK having tax free spread betting. Especially now the companies are getting their acts together and cutting down on the dishonest practices!
ICT, loving the thread, Iâve got a lot respect for what you are doing, the time and effort you put in to help other traders!
SpreadBet in the UK and Dont Pay Taxes too! 
:59:
never studied the tax code regarding forex profits so I wouldnât file your tax returns based on it. When you are the highest tax bracket, itâs commonly referred to as 40% since itâs a nice round number. Hope we all reach the highest bracket in a couple years!