forex tax versus trader tax

You don't need trader tax status to elect out of IRC 988; any investor or business trader can make this election.

If you have gains, you want to elect out for the lower 60/40 tax treatment.

If you have losses, it's better to keep the default ordinary loss treatment on forex, so your losses are not limited with the onerous capital loss limitations (of Schedule D).

The election is usually made for the year on a contemporaneous basis; not after the fact with hindsight (the IRS dislikes hindsight). The election is made internally within your own books and records - that's helpful!

The election rules are a little vague.

Thanks.