First, it is customary for positive starter cables to be black. There is no ground lead for the starter, because it is grounded to the engine block by its mounting.
Solenoids normally have three terminals: two high-current ones, and one low current one. One of the high current ones goes to the starter, and the other to the battery. The low current terminal is connected to the starter switch. When 12 Volts is applied to the low current terminal, the iron core of the solenoid moves downward violently. The thick copper disk on the bottom of the core hits the two high current terminals, creating a current path from one to the other, which suddenly applies 12 V to the starter motor.
