Trading For A Living

[Trader333]

JulesRules,

You said on another thread that you started with £20 and have made £1.8 therefore your ROI is 1.8/20 =9% not 18% unless you started with a different bank.

Also at 17 years of age which Spread Betting firm do you use as all the ones I know of you have to be 18 minimum ? The reason I ask is that I know a number of under 18s who would love to open a SB account but have not been able to as yet ?

Thanks


Paul

 

[julesrules]

my parents account

yes i started with £20 and have been averaging 18% ROI

e.g. Bet £10 that the footsie will rise 2% by the close
Return £11.8
18% return

although in practise its like 2 trades with return of 10% and 30% (random figures). etc hope that explains

 

[Trader333]

Jules Rules,

You are lucky to have such accommodating parents, unfortunately my friends dont have the same. I see what you mean now on your ROI and it is pretty impressive. Good Luck for the future


Paul

 

[FTSE Beater]

Hi Mr.Charts

IF he is one of the best and only makes 100k trading full time then his capital base must be relatively small

Maybe I should have been a bit clearer. I think he makes £100,000 from his day trading, but he wouldn't say how much he makes from longer-term trades, websites, magazine articles etc....

Hi Julesrules.

The tax system works like this

0% upto £4200 (roughly)
10% upto £10,000
22% Upto £30,000
40% up wards

So on £100,000 (profit, so that's less data feeds and trading expenses) you would get taxed roughly £33,000.

 

[Mr. Charts]

ftse-beater,
I'm still not impressed by his day trading profits if he is one of the best. Really not ;-)

 

[Mr. Charts]

PS I think you'll emulate that yourself one day ;-)

 

[julesrules]

well i have to pay for everything including losses. so i just use there name on the account

 

[warm_machine]

Jules : If you're trading for a living then you have to ensure, to the best of you're ability, that you cover any potential situations that could significantly dent your trading capital, because if you lose that, you're finished. Investigate market neutral strategies on a day to day basis, where you will be long one stock/group of stocks while at the same time being short another stock/group of stocks. Applied correctly, this strategy nets between 0-2% return per trade per day and you should be coming up with 4 or 5 of those per days, following a few weeks of research and investigation.

 

[julesrules]

ok stop me if this is tax evasion:

how about setting up a bank account in an offshore place (panama, Gib, Lux etc) then sending all my earnings from the trading account there. Then the earnings wont be UK based i.e. taxable in the UK, then i can just have a debit card and i should avoid tax at 40%

 

[ivorm]

Hey Jules,

Maybe you could make more money by setting yourself up as a tax consultant.

Regards,

 

[FTSE Beater]

Sorry julesrules

As soon as money comes from abroad into your account the government will want to know about it.

To save the £30,000+, it might be better to live abroad, in a low tax country

Just a thought

 

[Trader333]

UK Tax

Any money coming into the UK for your use from outside of the UK is taxable if it exceeds the tax threshold. Avoiding this legally is very tricky. This is why the very wealthy employ tax experts to reduce tax liability.


Cheers


Paul

 

[JonnyT]

Live in Belgium. Thats one viable trick. You can then spend 1/4 of the time in the UK and have no UK tax liability.

JonnyT

 

[julesrules]

ok idea 2:

Set up an offshore company pay my self £4000 p.a.
(below tax level)

then charge all major expenses as business expenses i.e. london apartment, new car, holidays etc

 

[techMark]

That is tax evasion.

If you are resident in the UK your earnings are taxable.

 

[JonnyT]

Hi Jukes,

You can set up a UK Limited Company. This is likely from April to be the most Tax Efficient way due to NI.

It works as follows:

1) Pay yourself an income upto the Tax Threshold circa £4500. This is then deducted from the Companies profits.

2) Any profits are then taxed at 20 or 30% depending on assests traded.

3) Pay yourself in dividends. Of course this is classed as income, but no tax will be liable upto the higher rate threshold. Exceed this and you effectively pay 22.5% extra. Just leave the money in the Company for over two years then shut down the Company at a cost of 10%. Start again...

JonnyT

 

[madasafish]

well I trade the S&P futures:
Minimum move required is a target of 3 points although the average is 5 points before move reverses or consolidates.

On average there are at least 4 such moves a day: sometimes more.

I am to win 2, breakeven in 1 and lose 1.

Sums : points wins: 2x5
Losses 1 *-2

Net gain per day 8 points.

Chose your stake size...


In reality on some days you can achieve over 25 points if very good..


At one contract of $50 8 points are that's $400 per day.. or approx £250.

Most full time pros trade 5 contracts and aim for 20 points per day... $5000.

I am sure A Farley trades more than 5 contracts

 

[ambitio]

The other thing is that spreadbetting is not tax free - if it's your main source of income. Spreadbetting companies say it's tax free, because to most people who trade as a side line it is, but as soon as it becomes your main source of income the government will want tax.

So presumably all lottery winners pay income tax on their multi-million pound jackpot prizes? If the IR taxed winnings as earnings then surely losses can also be offset which based on the bookmakers assumption/hope that more money is lost than won, would mean the IR is in fact worse off!

Can anyone verify if this is definitely the case?

 

[JonnyT]

Winnings from Bookmakers are free from Capital Gains Tax under legislation.

However if the IR beleives you earn your living from Bookmakers they can deem your winnings as income. You are then liable for income tax.

This has been applied (and never contested to my knowledge) to some sucessful punters and spreadbetters.

JonnyT

 

[shoee62]

yes it very definetly is.