This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
I was dreading preparing my Schedule-D this year for all the overtrading I did with my prop firm. Not only did I blow up, but I have to meticulously document it too? Match each entry and exit(s)? Wash sale rules? Bad times.
Then, today I get a Schedule-K from my firm. One simple number of my share of the profit / loss (definitely loss in my case) of the partnership, my share being the results of my trading activity. Taxes done!
Capital to fund account: $2000
Commissions over 6 mo: -$300
Realized trading losses: -$1250
Giving the IRS the finger: Priceless
This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
February 1st, 2008 at 4:53 am
i’m not laughing at the situation, but the post is very funny
February 1st, 2008 at 1:13 pm
I’m not sure how much $2k is for you, net-worth wise, but I lost more than that in a day on the 10th of this month. As far as blow-ups go, yours is not so bad.
February 1st, 2008 at 2:33 pm
@ML: The $2k is less than two weeks pay for me. Money-wise, it’s not going to affect my family’s livelihood at all. Zero. Blowup is a laughable term!
Psychologically, losing 80% of my trading account is a blowup to me. People might think I’m overdramatic about my “losses”, but to me it still represents failure as a trader. Unless I can make money with $2k, I can never scale it up and put some real money on the line to try to make a living through trading. So while I may lack discipline, at least I didn’t lack the discipline to not mortgage my house and kids to make the attempt…
February 1st, 2008 at 3:07 pm
Prospectus, You’re obviously a smart and well-read guy. You’ve probably read that the larger the account the less likely you are to blow up. Psychologically people take greater risks on small accounts because the money is “pocket change” to them. You might not blow out a larger account because you wouldn’t be risking more than a few percent at a time.
February 1st, 2008 at 9:56 pm
Mr. White Folks,
I was wondering if you can share the name/link of your prop firm. I am looking for a good and reliably one.
Thanks,
Alex
February 1st, 2008 at 10:56 pm
Alex, I don’t think MWF trades through a prop firm. Prospectus used to… is that what you meant? I think he was with Remata, and you can see his post about that here: http://www.movethemarkets.com/blog/2007/07/19/the-secrets-out-details-on-my-prop-trading-firm/
February 4th, 2008 at 10:55 pm
@Alex: You have me confused with someone who is both a better trader and infinitely more “pimp-tastic”.
But Richard is right, and before I stopped trading I used Remata Trading. If their tools and conditions meet with your needs, then I recommend them. Thomas Lanzana is honest and also a trader himself. Send me an email to prospectus@movethemarkets.com if you want any more info.
February 5th, 2008 at 8:02 am
prospectus: what if i’m actually on the wrong side of the profit factor? it would theoretically be possible to have several profitable months in a row, and still be a terrible trader…with a certain profit factor u can guarantee yourself X number of profitable months…maybe, my profit factor is so low, i’m actually proving that statistically u can have a few good months
February 5th, 2008 at 10:56 am
Richard is the profit factor expert. We should ask him. The only thing is that following stats like profit factor and expectancy with a small data sample size is not very meaningful, IMO.
February 5th, 2008 at 12:12 pm
prospectus: i was kidding, but i think it could apply…with a high profit factor u could expect let’s say 10 profitable months…so with a very low PF, u could expect 10 losing months, so u would have to see if two profitable months actually meant your trading was turning around, or if it was just part of the overall low profitability
i should post that to really kick people while they’re down!