Day Trading Shares as a UK Individual inside a Stocks and Shares ISA.

[bulltraderpt]

Evening all,

I read that a stocks and shares ISA is tax free and any gains made inside this are exactly that.

However, if one were to become a successful day trader of UK stocks listed stocks, would the Tax man throw out those rules for you as that individual?

Any thoughts welcomed on this and yes there is a back story.

Thanks.

[tomtomagain]

Tax man throw out those rules for you as that individual?

Any thoughts welcomed on this and yes there is a back story.

Of course the tax man is not going to customise the ISA investment rules for you as an individual.

HMG might at some point change the ISA rules and target everyone with any savings or investments. But that's a different story.

[AndrewK]

Day Trader on ISA? Not with their fees.... But maybe you will be very successful in trading

[VillageContractor]

I managed to make some decent money day trading in an ISA

Also managed to lose all of it as well

[Zylon]

You won't incur capital gains tax. Anyhow, HMRC have no reason to care about day traders as long-term almost all make a loss.

It's well established that individual day traders perform far worse than the market average, once trading costs are taken into account. See chart below for example, based on a pretty famous study. Note the baseline returns there for all periods are huge as it was based on a period from late 80s to late 90s when markets grew very rapidly. If you dig up equivalent charts for other periods of slower growth, you'll see that day traders' performance is so bad they tend to make a loss on average. Better keep your money in a piggy bank on the shelf.

[lukemg]

Standard saying is that 90% of day traders lose 90% of their money within 90 days.
If you do manage to bounce lucky, make sure you recognise that is IS luck and not skill, many people get confused about that...

[Ebenezer]

Given the obvious difficulties with intra-day trading profitably in an ISA - high costs, low contribution limits, no leverage, etc., etc., you may find there are more profitable ways to spend your days. Have you considered IT contracting?

But seriously though, stop spending the client's time dreaming up get-rich-quick schemes and spend it becoming an expert in whatever it is you are being paid to do; this will pay far greater "dividends" in the long run.

[bulltraderpt]

You won't incur capital gains tax. Anyhow, HMRC have no reason to care about day traders as long-term almost all make a loss.

It's well established that individual day traders perform far worse than the market average, once trading costs are taken into account. See chart below for example, based on a pretty famous study. Note the baseline returns there for all periods are huge as it was based on a period from late 80s to late 90s when markets grew very rapidly. If you dig up equivalent charts for other periods of slower growth, you'll see that day traders' performance is so bad they tend to make a loss on average. Better keep your money in a piggy bank on the shelf.

Yeap I do agree, I have seen that exact kind of information before.

On my own journey, (which is still continuing), I have made some howling mistakes but as a day trader you do have to be very selective in what you are trading and why.

Personally the fees (for buying and selling), aren't the issue as it's only £5 a pop, the issue for most is psychological, i.e. how you cope with a loss and when and how you bounce back or go back into the market at perceived better levels of risk to reward.

Not quite sure exactly where the market will be going as I type this, but a healthy correction would be most appreciated!

Cheers all.

[bulltraderpt]

Thanks all for your time.

I just thought I'd say a big thank you for all your time in answering my questions. My reason for initially asking my question was because I was using an accountant but felt as I now do all of my trading via the ISA wrapper, did I still need her?

It was a school boy error on my part and as I wanted to stay legal, I used her services for two years, my bad, unfortunately.

As an aside to this and for completeness (I won't bore you with all the details), I was unemployed and a house husband for three years and when I attempted to go back into the work force I found that the employment market had moved on leaving me wondering what I was going to do?

As my skill set is individual to say the least, I felt I had the tenacity, interest and determination to day trade shares for a living, this was back at he beginning of 2013 when I started. I was in the fortunate position that my wife understood my predicament and felt I had nothing to lose.

As I type, (and yes I am wary that the markets have been in a huge inflated central bank driven cocaine high), I am up 585% on my initial trading capital, although as I take a wage out every year at the end of the year (beginning in yr 3), I don't have that actual amount.

All I would say is it took a lot of hard work and study to go through books, charting information, forums, and gathering of information to find an exact trading style which aligns with my psychology. I may like to progress one day to swing and longer terming investing, but that could take an impossible shift in psychology on my part.

Thanks once again.

[andyg]

IG

Have a look at IG. I use them for buying and selling shares. SDRT are paid on the point of purchase.
Hurricane Energy are worth a look