Your Questions About Forex Capital Markets

Joseph asks…

i have a strategy to earn $250 per month by trading in forex on $3500 capital..how to market that ?

what is the best method? a fixed monthly subscription, sharing profits or one time payment? please suggest…….

kenspong answers:

Set up a hedge fund with a minimum investment of $1 milllion and hire a third-party marketer.

Betty asks…

What is the tax rate for a forex market?

What is the tax rate for a forex market?
About a year ago, I invested couple thousands of dollars in forex market. I have more lose than gain. Overall, I’ve gained around $7000.00 (my loss is higher than this value). My question is what would the tax rate for this capital gain be for this kind of situation. My regular income is less than $20,0000

kenspong answers:

Did you keep records that state you expected to be taxed under IRC 1256 (capital gains rules) rather than IRC 988 (ordinary interest income)?

If yes, then when you receive your 1099 at the end of the year you will get a 60/40 split of activity onto your schedule D. 40% is treated as short term; 60% as long term. Long term gains would get a better tax rate than short term gains. (If for some reason you don’t get the 1099, you must still report the income.)

Sharon asks…

Question about Forex market in India?

I’m interested in doing forex trading in India, because I think the capital market there is pretty stable and people have good discretionary income. However, my understanding is that RBI strongly regulates the forex market partially because it is afraid of possible currency manipulations by large institutions. And since it is possible to have a very high leverage in this market, people could lose a lot of money without enough prudence, and the government is aware of this, trying to control the forex market to a certain extent. So my question is, how much does the Indian government want to control the forex market, and what kind of rules and regulations regarding the forex trading and the relevant market are put forth by RBI? Are there any available websites or documents pertinent to the foreign exchange market in India I can take a look at?

kenspong answers:

I am trading in Forex market in India with http://www.finexo.com/, which is a business partner of Denmark’s Saxo Bank, with its headquarters located in Düsseldorf, Germany.

Here you can open a mini account with $100 and can start trading with it. The leverage provided by finexo is 1:200. You can deposit money using VISA, MASTERCARD and DINERS. They charge the spread (depending on the currency pair, and account type: mini: 5 pips, classic: 3 pips, VIP: 2 pips,). Which is very low compared to other dealers.

I earn 11.5% monthly return and my portfolio is managed by the Best in industry.

I am providing various links which contain rules and regulations issued by RBI. Find the best which suits you.

Donald asks…

Does Non-US citizens have to pay taxes in United states for Capital gains from Trading options ,forex &Futures?

Hello,

1. I am NOT US citizen or Green card Holder
2.I HAVE NOT Lived in United States for 182 or more days in a particular year.
3.I am Indian citizen and Resident

But, I am trading Options, Futures , forex in US markets using US brokerages.Also, I signed the W-8BEN form with the Brokerage.

Do I need to pay taxes for my capital gains from trading futures ,options ( NOT INTEREST EARNING SECURITIES like bonds or dividends ) to the IRS , united states???

I am NOT talking about paying tax in my Home country.I know, I need to pay tax in India. But, Do I need to pay taxes in United states???

Thank you.

kenspong answers:

The tax implications for a foreign investor will depend on whether that person is classified as a resident alien or a non-resident alien. To be considered a non-resident alien, a person must meet several guidelines. First of all, the person cannot have had a green card at any time during the relevant tax reporting period and cannot have resided in the U.S. For more than 183 days in the past three years, including the current reporting period.
However, non-U.S. Citizens who hold green cards and have been in the U.S. For more than 183 days are classified as resident aliens for tax purposes and are subject to different guidelines than non-resident aliens.

If you fall under the non-resident alien category and the only business you have in the U.S. Is in investments (stocks, mutual funds, commodities) within a U.S. Dollar-denominated brokerage firm or other agent, you are subject to the following tax guidelines. In terms of capital gains, non-resident aliens are subject to no U.S. Capital gains tax, and no money will be withheld by the brokerage firm. This does not mean, however, that you can trade tax free – you will likely need to pay capital gains tax in your country of origin. In terms of dividends, non-resident aliens face a dividend tax rate of 30% on dividends paid out by U.S. Companies. However, they are excluded from this tax if the dividends are paid by foreign companies or are interest-related dividends or short-term capital gain dividends. This 30% rate can also be lower depending on the treaty between your home country and the U.S., so it is important that you contact your brokerage firm to verify the rate. If you are a resident alien and hold a green card or satisfy the resident rules (183 days), you are subject to the same tax rules as any U.S. Citizen.

Donna asks…

Is this a good forex trading strategy that could work to make you a millionaire? Please read/advise. Thanks?

Okay, so, currently I’m 18 and I’ve looked into different possibilities of how I could become a millionaire using the forex market as my vehicle. I have discovered that using 1:100 leverage or even 1:50 – 1:25 is a bad idea if you want to be safe about it, and using a more modest 1:10 leverage instead is best for my chances of success.

What I’ve also discovered is that the forex markets trends last months or even years. So, my plan is as follows:

1) Start with $1,000 in my new forex trading account.

2) Use 1:10 leverage always to reduce a lot of risk.

3) Use a stop-loss of all my trading capital in every trade.

4) Keep the minimum take-profits as long as its more than what my commissions would be.

5) Just follow monthly chart trends, i.e. if the trends gone up for the past year on a yearly chart, and it shows it in a monthly chart that its going up as well, just follow the trend up along with it and keep on going up until I think its going to stop going up by taking advatage of lots of small take profits along the way.

6) Be aware of economic news and reports.

Example:

Say the GBP/USD is trading at £1.0000-$1.5000, and I place a bet to buy GBP/USD at this price at a 1:10 leverage, or $15,000 worth of pounds, (£’s) and I set a take-profit of, say, $15 or 10 pips and a stop-loss of my whole $1,000 and and keep on doing this, taking profits by trend trading and make this same $15/day for the 6 days the FX market is open a week, or $90/week x 52 weeks = $4,680 in 1 year + my original $1,000 = a 568% return for one year.

After I have achieved my 568% for 1 year, reinvest all capital and get another 568% compounded on top of that. So, it works as follows:

year 1) $1,000 up 568% = $5,680

year 2) $5,680 up 568% = $32,262.40

year 3) $32,262.40 up 568% = $183,250.43

year 4) $183,250.43 up 568% = $1,040,862.40 = USD millionaire

year 5) $1,040,862.40 up 568% = $5,912,098.74 = USD multimillionaire and GBP multimillionaire, or £3,829,025.15.

What do you say here like? Could this plan work do you think?

kenspong answers:

You’re catching a falling knife. Just buy some gold and let it set for 5 years. That or short some bonds because interest rates are going up.

Don’t screw around in currencies… You’ll lose your ass.

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