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 I'm working on an investigation
about FOREX and I'm having a really hard time trying to understand the dimensions
of the market and the average personal trading experience. Do you know:
- Average amount of money 1 person invests in the market
- Amount of transactions realized in one period of time
- How big the average transactions are?
- How long the life of an average client is?
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-Laura, Argentina
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 Laura,
Wow! You ask some tough questions. First, the Forex market is off-exchange
and without a central exchange to collect the data you need to answer those questions,
it's almost impossible to get reliable answers.
Every 3 years the Bank for International Settlements (BIS) publishes the
"Triennial Central Bank Survey of Foreign Exchange and Derivatives Market Activity"
report. The last report was published in April 2007... Read the full answer
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I am wondering if Forex
losses are deductable on income taxes. I have been trading for years and have never
had an overall loss for a year, but one of my students had a loss for '08 and is
asking me if it can be deducted and I have no idea. Do you know? And, if so, how
should it be entered on a tax return?
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-Mindy, USA
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Thanks
for your question, Mindy. Currency traders involved in the Forex spot (cash) market,
can choose to be taxed under the same tax rules as regular commodities [IRC (Internal
Revenue Code) Section 1256 contracts] or under the special rules of IRC Section
988 (Treatment of Certain Foreign Currency Transactions). IRC 988 applies
to... Read the full answer
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The NFA has proposed a new rule that would eliminate
hedging from spot Forex trading. Isn't it true that hedging is the safest way
to trade Forex and the NFA is taking away our safety net?
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-Hal, USA
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That's a great question, Hal -- and pretty controversial
right now. The NFA surveyed 17 FDMs about hedging before making their recommendations
to CFTC. Most of these FDMs admitted that traders don't gain any financial benefit
from the hedging strategy to which you're referring. In fact, there are a few problems
with hedging the same currency pair... Read the full answer
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