Depends on the country and the tax regulations there.
If you are not an extremely active trader (read: it is actually your job), you are only subject to capital gains tax in The Netherlands, which is between 0,8 and 1,8% next year.
You lucky personage. It's 18-28% in the UK and probably going higher. I will soon be imprisoned here as well so won't be able to spend that tax avoiding year making Lederhosen in Bavaria that I was planning on.
Ouch...
The Dutch tax office uses an "expected return" on your investments. This expected return is now 4% annually (Will change slightly in the future to a sliding scale depending on how much you have). This 4%, which they say is the profit you made over your investments, is then taxed for 30%.
The only thing that matters is the value on January 1, it doesn't matter how much it was worth on December 31 of that year, they assume you made 4%. It doesn't matter if you gained or lost money, it simply is 4%.