How does the Verlustvortrag actually work in Steuererklärung in Germany

I guess you are talking about the loss you make when you sell shares or other securities below the value you bought for them. Such losses can only be deduced from capital gains earned by selling other securities and not from anything else like earnings from a job and also not from dividends or itnerest payments. That's the rule unfortunately. I am not quite sure if that is really fair, since if someone loses money selling stocks and never returns to the stock market, he will never have a chance to compensate for the losses, but that's the rule.