Resolved Question: Choosing a Market to Trade in...?

Please read the entire question, as there are multiple parts to it. Thanks!

I lost around $25k in 2009 trading online foreign currency at interbankfx. I also lost almost $1k playing stocks (I know..I have no future as an investor). I'm hoping to get some of that money back.

I am using HRBlocks premium edition to enter the losses. I want to offset the $100k I made this year with the $25k in losses on the forex. From what I've read, I can just put a cumulative (total) amount on line 21 on my 1040 under "other income" as a negative amount. Is there a sub category that classifies this debt/loss, because I can't enter anything directly into line 21 with HRBlock "premium"? Also, will the IRS automatically assume that I am filing the loss under section 988, or do I need to select that somewhere and include some additional forms? My understanding is that is the default way to report gains/losses unless you specifically opt out of that section and tell the IRS you want to file under section 1256?

Does the fact that I am claiming these big losses on the forex affect my ability to claim the $1k losses from the stocks/options trading. I'm reporting that on a line by line basis on 1099-B? I have two trading accounts. I have one that was just a normal trading account, and the other is my roth IRA. Should I also report my losses from my roth IRA under 1099-B?

Here's what I "think" is correct way to file my taxes...I assume that since I should be able to claim all the stock losses under 1099-B (both regular trading account and my IRA), and I should also be able to provide a cumulative total for all of my losses from my 2009 online forex escapades on line 21 on my 1040 as a negative number (I just need the subcategory to classify this "income" under). It would effectively reduce my income by $25k and save me around $5k on my taxes I'm estimating.

I would also like recommendations on anything that might help prevent an audit? I was thinking that rather than e-filing I should mail the return in, and I should include a complete summary of all the trades that I made on an excel spreadsheet. Writing down 25% of my income will no doubt raise some red flags, and the last thing I have time for is dealing with the IRS.

Thanks to everyone for your responses!

Thanks so much for any input! >> full story

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I need to find a reputable online forex trader that accepts Liberty Reserve and also accepts deposits as low as $20 to start trading. >> full story

Resolved Question: Choosing a Market to Trade in...?

Hey guys. I've been looking into investing in trading with some extra money I have rather than simply letting it rot in the bank (and yes, I can afford to lose it). I'm not looking to make thousands or get rich overnight. I have about $600 to invest initially and would like to make about $25-50/week in the beginning. My question is what type of market seems to best suit these numbers? I know I need $25,000 to day-trade stocks, but I was looking more along the lines of futures, or possibly mini-forex. Of the online brokers I've researched, Scottrade requires only $500 to begin. Any (PROGRESSIVE) input would be greatly appreciated. Thanks! :) Umm, Jim... unless I'm missing something, I really don't appreciate the sarcasm, buddy. I asked for PROGRESSIVE advice, not backlashing. I'm not another trader "clown," as you say. I know what I'm doing. >> full story

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