If someone is waiting to the end of the year holding losing positions on what is a short term trade just to get a tax break, the IRS will call these individuals not traders but hobbyists and they are probably going to be disqualified as Trading as a Business Status and reclassified as a Hobby Trader. The goal in trading stocks is that you have so much profit at the end of the year you can easily pay any tax bill AFTER you deduct all your Trading Expenses, Trading as a Business which Hobby traders are not allowed to do.
Not every loss is tax deductible.
So this is not a wise strategy. When a trade is going against you, then your stop loss should automatically take you out of the trade at a VERY SMALL LOSS.
All of you need to buckle down and learn how to trade successfully and stop wasting your hard earned money on guesses, hunches, guru recommendations and strategies that don’t work.
Hobby traders are limited in what is deductible for tax purposes. Go find a tax advisor who knows about retail trader IRS regulations for Trading as a Business. By: Martha Stokes, Chartered Market Technician Buy Side Professional