This tax benefit is not available because of the “wash sell rule,” which delays the tax implications of any profits or losses if you re-enter the same position within 30 days.
In other words, if you sell a stock at a loss and then buy it back a week later, your loss is no longer deductible. The loss will be recognized for when you sell the shares again.
Note:
If lowering your tax bill is your top priority, consider a Roth IRA or 401(k) plan instead of a standard brokerage account.
How to Invest in Your First Stock
When you’re ready to trade, fund your brokerage account by transferring funds from a bank account. Your funds may take some time to “settle” or become available. Some brokerages give you the money right away while the transfer is being processed, while others make you wait a specific number of days.
Log into your brokerage’s online account once the money has been settled. Choose the stock you want to trade, then choose an order type and place the order. After placing the order, ensure that it is executed.
If you use market orders, they should be executed instantly. If you use limit orders, your order may not execute immediately. If you want the trade to happen faster, set your limit price closer to the ask (if you’re buying) or bid (if you’re selling).
Are You Prepared for Complex Stock Trading Strategies?
Beginners should stick to straightforward purchase and sell transactions. However, once you’ve mastered the fundamentals, you can add sophisticated tactics to your trading toolbox. Trading options, for example, expose you to increased volatility.
These are riskier actions that allow you to achieve both gains and losses faster. Borrowing money from your brokerage firm to trade stocks is another advanced method.