Here's a transcript of some questions and answers that I
recently asked Phaedrus. They're probably useful to other
ShareChat readers. Please feel free to add your own knowledge and
experience to my questions below.
Q: What are the tax implications for trading in AUS and
USA? Do you pay capital gains tax there and how is it treated if you bring
the money back to NZ? Are you taxed twice on capital gains or is it just
treated as overseas income and taxed at your personal tax rate?
A: You pay no tax in the overseas country in which you make the
profits, but pay tax here at the appropriate rate when you declare those
profits as income.
Q: Do you buy "put" and "call" options to cover your respective
long and short positions? It would seem a good risk reduction strategy
despite the lower returns.
A: I do not trade options at all, so do not use them as a risk
reduction strategy. I have read of some people doing this, though.
Q: I've decided to buy the book "Trading for a living" by
Dr Alexander Elder. It gets a pretty good rap from most people that have
read it.
A: Dr Elder's book "Trading for a Living" is an excellent choice
for a first book. Some of his ideas do not work so well in markets (or
stocks) that are lightly traded, though.
Q: How easy is it to short sell?
A: NZ :- All but impossible.
Aus :- Cumbersome, difficult,
restricted.
USA :- Easy, fast, cheap. (Exactly the
same procedure as going long)
Q: Ok, so you mean you can be in a short position for an
indefinite period of time?
A: In the USA, there is no time limit as to how long you can short a
stock.
Q: How do you screen for stocks? I saw that you
suggested that BCH was now in a confirmed uptrend, but how did you notice
it? Is there a way to set up a screening monitor for particular TA
indicators across a whole market?
A: There are many ways to screen stocks :-
(1) By eye, quickly
looking at the chart of each stock in turn. This might only take about 5
seconds per stock.
(2) Software such as MetaStock can be used to screen
for any technical parameter, or combination, that you can think of.
(3)
There are many web-based screening utilities available. They may be based on
fundamental or technical criteria, or even candlestick patterns.
(4) Most
US brokers provide stock screening utilities for their customers, as well as
their own ranking systems, which can be used as a preliminary screen. They
even have intraday screeners.
Thanks Phaedrus!
See IRG research reports
