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Strategies & Market Trends : Trader J's Inner Circle -- Ignore unavailable to you. Want to Upgrade?

To: Go Fast who wrote (11)	11/1/1998 12:11:00 PM
From: Mike McFarland	Read Replies (1) \| Respond to of 56535

I think it only makes sense to trade in an IRA to avoid all that if you have the choice--that's what I do (I don't short or play options anymore). However I have gotten advice that the correct strategy is the opposite--trade in taxable account to take advantage of losses and go for slow steady gains in the ira where the shelter and time work for you. I'd be appreciative of any thoughts on this. The conclusion I have come to on my own however is to trade in the ira, and if/ when a certain target is reached then shift to the long term growth and move the trading to a different account--sort of a diminishing returns and increasing safety hypothesis. Finally, for me, it seems that for whatever reason trades which have a turnover of weeks to months seem to generate the best profit. Therefore I am going to try and limit myself to just one trade a week. Naturally people who follow more stocks and spend more time at the game would have a shorter time scale, and I suppose it is also a function of how much money you can sink into each idea. I'm also working on the assumption that an account shout have about five stocks and one part cash. Trader J--if I may ask, how well have you done trading and how much time to you spend following stocks and their price movements? Feel free to PM me. --MM although it has certainly been argued that the extra time and effort should simply go into choosing better long term stocks

To: Go Fast who wrote (11)	11/1/1998 1:29:00 PM
From: Trader J	Read Replies (1) \| Respond to of 56535

GF, that is a deep one. For starters, use the following link: www3.techstocks.com I strongly suggest the first two links from that page here at SI. Both are very good. Trading and investing are, for the most part, handled the same unless you file for a trader status. You will still need to keep track of your buys/sells, losses/gains and costs and report them on your sched. D. This can be a daunting task if you don't keep a running total of your trades on, at least, a weekly basis. I know I get lazy sometimes and watch those trade confirms pile up knowing that if I don't do them soon, the pile will double. I keep mine in Excel and update it often. It will save you money in the end at your tax specialist, they WILL love you for it. You would be surprised how many traders do not know about the wash sale rule. Please, Please, read a bunch of the posts from the link above. You will get quite an eductation. Secondly, if you trade often and consistent, you may file as a trader and elect for a Mark-to-market accounting method. This eliminates the wash sale rule for traders, but certain restrictions do apply. Most importantly, you do not have to worry about the $3,000 captital loss limit....if you are a trader status, this is waived and all losses and gains are added/subtracted from ordinary income. It is a very new law with much still to decided the Govt. I have not found anyone locally here that is knowledgeable in these practices. In fact, the two people I went to I should have charged them for seminar on day trading, how it works, what is and what it can do for you. :) Hope this helps. Definitely use the link above, there is a lot of good information and further links to some tax people that specialize in tax issues for traders. Luck to you. Jeff