Losses are netted within and then across categories. If a net capital loss remains, US individuals may deduct up to $3,000 against ordinary income each year, $1,500 if married filing separately, and carry the rest forward with no expiry.
A large loss year therefore creates a tax asset that only pays off if you trade profitably later. This is why a trader with a catastrophic year and no other income gains very little immediate relief, and why the section-475-election appeals to full-time traders, since it converts trading results to ordinary and removes the capital loss cap.
Carryovers are tracked on schedule-d and its worksheets. Losing track of them across brokers and years is a common and expensive bookkeeping failure.
General information for the United States, not tax advice. Rules change and depend on your circumstances; verify with a qualified adviser.
Related: capital-loss-limitation, schedule-d, section-475-election, short-term-capital-gain, form-8949