Foreign exchange and the benefits it brings to investors has long been the talk of the town. Sometimes, people, who pay heed to the talk, want to take their first steps into Forex trading but are unaware of where to start.
This article gives a short guide on how you can get started with Forex trading.
Earlier, Forex trading was limited to the larger multinational companies and national banks. Ever since the 1980s though, with the revision of the rules, smaller investors have been allowed to enter the market and trade with the big fish. One of the reasons for the popularity of Forex trading is its use of Margin accounts.
A margin account is basically an account that has a margin of 100:1 allowing you to control $100 000 whilst only having made an investment of $1000.
How to Get Started?
Here are some details on all the things you’ll need to do when you are looking to start your Forex trading.
- Typically, when you are getting started, you will not know the Forex market inside out and will require a broker to handle all your transactions. These people will charge you a fee for their services to you. The fee can sometimes be a flat out fee and at other times, a percentage based fee on the amount of profit you earn. Making the choice of which broker to choose is important. A leading company in this field is ETX Capital, which can help you with Forex related issues.
- Once your choice has been made, you will need to open a Forex account to be able to start trading on the Forex market. For that, you will need to provide the necessary identification information and documents as well as fill out a form.
- The form that you will be required to fill out will have margin agreement whereby you will authorise the broker to interfere in situations that they deem too risky. This is because most of the trade is done using the broker’s money instead of your own.
- The account you choose will determine the volume of trade that you can do. There are often options between standard accounts and mini accounts. Standard accounts will have a minimum deposit of around $1000 at least, while a minimum account will have a least investment of $250 required.
- Once the account is made, the beginner can start trading in the Forex market. They can usually make use of a number of different software that the broker may provide, for analysing the situation of the market etc.
Important Tips to Note
For people that are looking to get started with Forex trading. Here are two important tips to keep in mind.
- First up, before you get started with trading, make sure you have read all about Forex trading. Forex trading may seem simple, but the risks involved and fluctuations of the market mean its best that you know about it before making the leap.
- When you have tied up a deal with a broker, before you start trading, it is recommended that you do the 30 day free paper trade trial to learn what do and what to avoid in Forex trading.
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