Once you begin making money in the forex

Beginner Questions
1

  1. How high should you let your account get before pulling money out of it? I realize you could trade into the billions of dollars without much problem, but holding that much money in one account seems dangerous. Should you pull a certain percentage out, say 10% a month (if you gain that much) and move to another account?

  2. A similar question … would it be wise to diversify earnings once you begin making enough money? Stocks? Real Estate?

  3. Is there any decent tax shelters for trading in the forex? Trading currencies is different than trading stocks, in the eyes of the IRS, I would think.

  4. Should you create a corporation to hold your profits to keep from paying huge taxes? I just don’t know if a corporation could consider forex trading as “investing thier profits” which would make all profits taxable.

  5. Should you trade with different accounts? Multiple brokers to spread around the money?

I am just curious what others are doing … and I probably need to go see a tax attorney.

2

… and I probably need to go see a tax attorney.

Laws will be different depending on where you are.

You most likely will not need to know until you make a taxable amount. :wink:

3

Hi!
Scuse me for the language, I speak french in a first time and I’m not very good in English.

I’m not trading in real on the Fx but I actually trade on the stocks market with an account from the Belize in it is very interesting. Until you don’t transfer your cash in your country, you don’t pay huge taxe.

Me, I’m from Canada and our taxes are very high. If I should pay taxe each year, I would be penalized but when I will come my money back, I will pay the taxe on my total money but I will had work with a big amount before and I will have done a lot of cash in the month who will precede my withdray.

          M-A
4

OK, it makes eense that you wouldn’t begin paying taxes on a real account until you pull money out. Is this true if you use a broker in the U.S.?

Also, how much money would you leave in your account as it grew? When would you begin taking out money and how much?

5

If you make enough to pay taxes, definitely speak to a tax accountant/attorney - don’t trust any advice about something so important from an internet forum. Odds are that you will have to pay tax whether you withdraw or not, but a good tax accountant may be able to make arrangements to minimize (or eliminate) taxation.

As for withdrawing money to diversify, don’t think of your forex account as an investment - that money is for speculating on the forex market, which is the source of your income, just like a job. In my opinion, once your account is a decent size, you should withdraw your living expenses each month, plus a bit more to invest. ote that I said [B]invest[/B], not trade! That money should be used to buy safe bonds, stocks, mutual funds etc. just like most people who work save some of their income - e.g. in a pension fund, or incase they get fired (or in your case, you lose the ability to trade for whatever reason).

6

I think u r smart and know the answers but let me see if i can add
1)Take out ur initial investment atleast in addition to monthly profits :slight_smile: if u make them :wink: if u have made million/billions of dollars and God forbid suppose ur broker gets insolvent:eek: Having said that u shudnt take out lot of money too cos when u have more u can leverage more and make more money per pip or u can use lesser leverage and make safer trades.
2)Dont put ur eggs in one basket.
3)talk to a tax specialist. maybe if u have millions u can live 6 months in different country and six months in different country and since u wudnt be a resident of any some countries wudnt tax u;)
4)talk to tax specialist
5)refer to point 1
enjoy

7

Sorry to ruin the party but i think concentrate on making the cash first… :confused: