I have losses in day trade, which I know can be claimed on section 988, but when doing so, my earned income isn’t decreasing.Oppose to when claiming losses for a business

1st question: why? if section 988 is considered as a ordinary income, it will be taken out from my earnings and I’ll be eligible for EIC
2nd question: in this case, is it possible/legit to claim those losses on a schedule C, so included with my self employment?