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"Then understand that financing needs to take
place only if someone takes delivery. And even then,
the exchange is not going to finance anyone. If someone
wants to take delivery of 5,000 ounces of silver she will not
receive a loan from the exchange. Any outstanding balance must
be paid in full for the exchange to release the silver from
the warehouse. "
"It is amazing that the tax implications of
commodity trading is given only a cursory examination when new
traders investigate futures. No other public policy, that a
trader can adjust to, impacts the profits of an account
greater. Yet, time and time again, brokerage promotional
materials make little mention, if any mention, of the
devastating effects of taxes or how to avoid them. Evidently
most commodity traders truly believe they are going to be
sooooo successful trading, that the taxes they will owe will
be inconsequential. As a result, a serious discussion of the
adverse consequence of taxes does not occur before trading
commences."
And...
"There can be special situations where not only will a
trader suffer a loss of trading capital, but back taxes will
also be owed to the IRS. Imagine owing taxes on losses! It can
happen!"
"...daytrading increases your risk/reward
ratio. Remember the old saying, "cut your losses short and let
your profits run?" Daytrading forces a trader to practice the
exact opposite. Daytrading forces traders to cut their
profits short and let their losses run. Take for
example..."
"As computers have become more powerful and
more trading software has been written, their use has
proliferated. This begs the question: "Are computer
systems predictive?" That question is best answered with
another question: "Is the system for sale?"
"Managed accounts are promoted as mutual
funds for futures traders. The central concept of the managed
account is to have a talented manager make the investment
decisions on behalf of the clients. Theoretically the manager
shares in the profits and everybody wins. This looks good on
paper but evaluating performance can be a formidable task,
especially with managed accounts. The key problem is that with
managed accounts, every client opens an independent account
that is individually traded. The logistics of trading hundreds
of different accounts can be a challenge; tracking the
performance of hundreds of accounts can be a nightmare."
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