Cash FX
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gedward3
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If you trade short term and over news you will lose money.
Trade longer timeframes ie: 15, 30, 1hr above and you will be ok.
Be prepared to use bigger stops so you dont get stoped out even though you are right on the direction.
Trade Direct Market Access if you want to be in and out in a few minutes upwards.
Have a maxmimun amount your willing to lose and use that stop loss to fight
with the next trade so you have money lsft to trade with.
Only risk 1% of your account per day and divide that by how many trades you
plan on doing.
Find something to do to stop you over trading.
Trade with a plan.
Theres much more and im sure people will contribute.
Ged
Last edited:
Sorry... I think you misinterpreted my question. I was interested in the tax differences between trading Cash FX and spreadbetting
gedward3
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Maybe i did mate but both ways your trading with the firm you trade with
and they may hedge your trade in the direct market witha load of other trades.
In theory SB is tax free so you pay no tax on winnings.
Cash FX will take their prices from the futures plus or minus fair value. EG SB.
If you trade Cash FX they will close you out at the end of day and reopen your trade
or charge you an overnight finance charge.
I believe you would be liable for tax with Oanda if your trading Cash fx
Had a few beers so let mw know if this answers your question
Ged
Yeah, what I am keen to get a better understanding of is if I am trading cash FX with a broker such as Oanda do I need to declare any capital gains to the Inland revenue?
advfntrader
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yes you would need to declare if you go over the capital gains limit as its not tax free
gedward3
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CGT Limit is £10,100 so until you earn this you wont pay anything.
After that you will pay it at 18% on your gains.
What you need to look is whether making this is going to be achievable
and also what broker you will go with.
If you have the funds available you would probably be better off going
Direct Market Access or with the big guys like Currenex as i believe you get
better pricing.
Oanda would probably be taking the other side of your trade and hedgeing
a number of trades in the market to cover their whole book so you may get
a bit more slippage. I dont trade with these but maybe somebody else can
offer their views.
Ged
Many thanks for the above Ged. Useful info RE the CGT! So, if I trade cash FX in my spare time to make a second income I do not have to declare any profits under £10,100 annually and any salary I have from my full time job would not be included in any of the CGT calculations?!
Apologies for all the questions, I am a bit of a novice in this department..
http://www.hmrc.gov.uk/cgt/intro/when-to-pay.htm
The above link suggests that there is no need to pay CGT on dealing on foreign currency.
Exempt assets - when you don't pay Capital Gains Tax
Some assets aren't liable to Capital Gains Tax at all because they’re exempt. These include:
* your car
* personal possessions worth up to £6,000 each, such as jewellery, paintings or antiques
* stocks and shares you hold in tax-free investment savings accounts, such as ISAs and PEPs
* UK government or ‘gilt-edged’ securities eg National Savings Certificates, Premium Bonds and loan stock issued by the Treasury
* betting, lottery or pools winnings
* personal injury compensation
* any foreign currency held for your own or your family’s personal use outside the UK (eg if you've made a gain because of a change to the exchange rate)
The above link suggests that there is no need to pay CGT on dealing on foreign currency.
Exempt assets - when you don't pay Capital Gains Tax
Some assets aren't liable to Capital Gains Tax at all because they’re exempt. These include:
* your car
* personal possessions worth up to £6,000 each, such as jewellery, paintings or antiques
* stocks and shares you hold in tax-free investment savings accounts, such as ISAs and PEPs
* UK government or ‘gilt-edged’ securities eg National Savings Certificates, Premium Bonds and loan stock issued by the Treasury
* betting, lottery or pools winnings
* personal injury compensation
* any foreign currency held for your own or your family’s personal use outside the UK (eg if you've made a gain because of a change to the exchange rate)
leovirgo
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gedward3
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In effect you are just paying tax on the gain on the capital you are risking.
EG: Spreadbetting is deemed to be tax free as it is wrapped in the Spread(BETTING)
wrapper and is deemed to be gambling.
What is debateable is the charts that you trade from are marked up as being
indicative and hence you are trading the SB firms prices. Now if short term trading this is no good but for longer term trading its fine.
Dont forget you can also trade the currency futures as well if capital is not a problem.
Ged
swedendenmark
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Dear Tom,
I have been following MMT for quite sometime, albeit not able to devote that much time because of job. I had collected an assortment of questions, so thought to ask you if you allow me that.
Q1 - Can retracement levels downwards which act as a support, act as resistance to movement up? Like 38%, 50% which were initially acting as a support for the price falling down(retracing), later acting as resistance to upward movement in price? In MMT you mentioned that they don't, but I see them swapping roles time to time.
I do understand that if a price got support at 38% level initially before piercing through it, then the same support will act as resistance to upward movement. Still your comments would be esteemed.
Q2 - In post #1093 you said
I think you made a website aproptrader dot com some 1.5 yrs back, which is now taken off the web. There you had listed some of the things/software/charting packages one needs, but the site no longer exists. Have you loaded that stuff on some other website?
Also, I am facing this problem of not understanding the time zone traders trade. For example all charting packages show different charts. For some charting packages the day ends at 11:00 pm british time, for other its 10:00 pm british time etc. Thus, naturally we will see different charts. So, which time zone you will recommend? I can understand that for 1 hr it is not a problem, but for 4 hr and 1 day, it is a big problem if you don't know what time zone charting packaging others might be watching.
Q3 - You did not talk of leverages in currency on MMT. I take leverage of 20, as I am a novice, but your perspective on that will be helpful.
Thanks so much. I understand that you are busy, so please take your time.
Regards
I have been following MMT for quite sometime, albeit not able to devote that much time because of job. I had collected an assortment of questions, so thought to ask you if you allow me that.
Q1 - Can retracement levels downwards which act as a support, act as resistance to movement up? Like 38%, 50% which were initially acting as a support for the price falling down(retracing), later acting as resistance to upward movement in price? In MMT you mentioned that they don't, but I see them swapping roles time to time.
I do understand that if a price got support at 38% level initially before piercing through it, then the same support will act as resistance to upward movement. Still your comments would be esteemed.
Q2 - In post #1093 you said
I think you made a website aproptrader dot com some 1.5 yrs back, which is now taken off the web. There you had listed some of the things/software/charting packages one needs, but the site no longer exists. Have you loaded that stuff on some other website?
Also, I am facing this problem of not understanding the time zone traders trade. For example all charting packages show different charts. For some charting packages the day ends at 11:00 pm british time, for other its 10:00 pm british time etc. Thus, naturally we will see different charts. So, which time zone you will recommend? I can understand that for 1 hr it is not a problem, but for 4 hr and 1 day, it is a big problem if you don't know what time zone charting packaging others might be watching.
Q3 - You did not talk of leverages in currency on MMT. I take leverage of 20, as I am a novice, but your perspective on that will be helpful.
Thanks so much. I understand that you are busy, so please take your time.
Regards
