Take advantage of Forex’s global currency exchange. It offers a 24-hour market, low transaction costs, no commissions, a completely manipulation-proof market, low entry barriers, and great investment potential.
Forex contains the biggest number of entities of banks, brokers, financial and business institutions. It’s becoming very popular with all kinds of traders. Choose from its three major trading spaces such as the Spot Market, Forwards Market, and the Futures Market.
So, you want to get into the online trading space. Forex trading offers great investment potential. In fact, it’s even referred to as ‘a portmanteau’ of foreign exchange and currency. According to the Bank of International Settlements, Forex exchange averages at least $5.1 trillion in Forex volume on a daily basis.
We believe that’s what you’re signing for. Forex is a global marketplace. That means they trade a wide range of national currencies on a daily basis. Because of its global reach, the market is becoming the biggest industry for liquid assets in the world.
The unique thing about the international market is the fact that it doesn’t have a central marketplace. Instead, it operates electronically or over-the-country (OTC). This means all transactions occur between computer networks and traders all over the globe.
And what’s more, the market is open 24 and five and a half days a week in all major financial centers including New York, London, Zurich, Hong Kong, Frankfurt, Tokyo, Sydney, Paris, and Singapore. The Forex market is significantly active most of the time.
Before you begin investing, it’s important to get yourself the right education. This is the best way to know and understand the space you’re trying to enter. To get you in a better position in the forex trading space, we came up with the best online trading guide possible to help newcomers. Make sure to check and follow them.
Five Steps To Forex Trading
1. Know Which Type of Online Trading You Want To Get Into
Forex trading has 3 main types, namely: day trading, scalping, and swing trading. The most active styles are day trading and scalping.
Day trading is a trading system that involves opening and closing trades during the same day. While it’s used in many different markets, day trading is most common in forex trading.
That’s because you can take profit from small price movements in a given day. Traders involved in this type of trading prefer liquid markets like currency, stocks, and index markets.
On the other hand, scalping is a system where the trader buys and sells currency pairs but would hold it for a short period. This is how they make a profit. While traders can make a small profit like 5 to 20 pips per trade, however, the profits are magnified when the position size increases.
2. Choose The Appropriate Broker
While it’s possible to open an account anywhere you are, it’s always beneficial to get an appropriate online forex broker. Make sure you get the one that meets your requirements.
Likewise, the broker should separate your money from theirs and they’re operating in a secure location. The key to choosing the right broker is they should be under a reputable regulator like the UK’s Financial Conduct Authority (FCA) or the U.S. Commodity Futures Trading Commission (CFTC).
3. Open A Trading Account
Once you have a reputable broker, you need to open a trading account where you can deposit funds into.
The majority of online brokers accept a variety of ways to fund your account. This includes debit card payments, electronic payments like PayPal and Skrill, and Bank wire transfers.
4. Acquire A Forex Trading Platform
The right platform is always supported by your trading broker. Brokers often offer their clients a proprietary trading platform or a third-party platform. Some of the most notable platforms are MetaTrader4, NinjaTrader or 5(MT4/5) of MetaQuotes.com.
5. Get Started
Only after you completed all the steps mentioned can you start trading. Now, you can start funding your forex account as you’re ready to trade.
However, it’s nice to open a demo account that you can fund with virtual money to test the platform. This is also a good way to test trading strategies and practice trading risk-free.
Choose The Best Forex Brokers
Often, your local forex regulation authority will determine whether an international broker is allowed to take you in as a client. For this reason, it’s important to get the most suitable broker for your trading needs.
Likewise, you can also check with other brokers so you will have as many options as possible and eventually commit to the one that suits your needs.
There are many ways to do this. However, it’s best to start with their online reviews. This is the best place to see how they manage their customer base.
Here are some of the most reputable international forex brokers.
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- Forex.com
- IG Group
- ETORO
- HYCM
- AVATrade
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Conclusion
Forex trading is relatively easy when you get started. That doesn’t matter where you’re located. However, it becomes a lot easier if you have some risk capital.
Furthermore, to really succeed in the trading space, you need to consider more than your capital. The most important thing is to develop a really good understanding of the market.
Furthermore, it should also be coupled with a realistic trading strategy within a really good trade plan, the discipline to stick with your strategy, and also the determination to start over if you fail. In addition, if you have all these requirements then you have a better chance of success at forex trading.
However, if you don’t have all these qualities you can still start opening an account and do what successful traders are doing.
Read Also:
- 3 Top Tips For Businesses Trading Forex in 2021
- 6 Tips For Selecting A Forex Broker
- How To Choose The Best Trading Platform?
Author:
Aimee Hill is part of the content team at The Long Reach. Aimee has worked in the finance industry since graduating from university. When not writing about the newest strategies on investing, Aimee can be found researching new travel locations.
