The foreign exchange market (FOREX) offers many advantages to investors. But you need to know where to begin. This short guide will give you the FOREX basics, so you can quickly start participating in this fast growing market. In the past, foreign exchange trading was limited to large players such as national banks and multi-national corporations. In the 1980’s the rules were changed to allow smaller investors to participate using margin accounts. Margin accounts are the reason why FOREX trading has become so popular. With a 100:1 margin account, you can control $100,000 with a $1,000 investment. A Learning Curve FOREX is not simple, though, so you’ll need some knowledge to make wise investment decisions. Although it is relatively easy to start trading on the FOREX, there are risks involved. Your first move as a beginner should be to find out as much as possible about the forex market before risking a dime. Find A Forex Broker FOREX traders usually require a broker to handle transactions. Most brokers are reputable and are associated with large financial institutions such as banks. A reputable broker will be registered as a Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC) as protection against fraud and abusive trade practices. Open an Account with a forex borker Opening a FOREX account is as simple as filling out a form and providing the necessary identification. The form includes a margin agreement which states that the broker may interfere with any trade deemed to be too risky. This is to protect the interests of the broker, since most trades are done using the broker’s money. Once your account has been established, you can fund it and begin trading. Many brokers offer a variety of accounts to suit the needs of individual investors. Mini accounts allow you to get involved in FOREX trading for as little as $250. Standard accounts may have a minimum deposit of $1000 to $2500, depending on the broker. The amount of leverage (how much borrowed money you can use) varies with account type. High leverage accounts give you more money to trade for a given investment. Trades are commission-free, meaning that you can make many trades in one day without worrying about incurring high brokerage fees. Brokers make their money on the ’spread’: the difference between bid and ask prices. Paper Trading Forex Market Beginning traders are strongly advised get accustomed to FOREX by doing "paper trades" for a period of time. Paper trades are practice transactions that don’t involve real capital. They allow you to see how the system works while learning how to use the various software tools provided by most FOREX brokers. Most online brokers have demo accounts that allow you to make free paper trades for up to 30 days. Every new FOREX investor should use these demo accounts at least until they are consistently showing profits. FOREX Software Each forex broker has its own set of software tools for making transactions, but there are a few tools that are common to all FOREX brokers. Real-time quotes, news feeds, technical analyses and charts, and profit-and-loss analyses are some of the features you can expect to see on most online brokers’ web sites. Almost every broker operates on the Internet. To access a broker’s online services you’ll need a reasonably modern computer, a fast Internet connection, and an up-to-date operating system. Once your account is set up, you can access it from any computer just by entering your account name and password. If for some reason you are unable get to a computer, most brokers will allow you to make trades over the phone. There are lots of ways to make money. FOREX trading is just one more potential stream of income — if you are prepared to learn and practice.
mh seriously, just head over to babypips of forexfactory they are the best sources to start forextrading, not some 500 word guide this guy probably just posted to market something later on...
I also used babypips but found forex4noobs and informedtrades.com great too. I'm now gathering the 1k to start trading. Taking a while lol.
Playing forex is not only need technical skills and fundamental skills. But also the biggest skill that we need is controlling our emotion of greedy That is my biggest problem rite now for me.
Have any of you actually got paid from any forextrading? just wondering. I feel that this could be scam just like hyip's.. or what do you guys think?
I wouldn't say forex in general is a scam but you do have to research your brokers as there are many that have violated there local trading laws. The problem is that most of the brokers out there are foreign and operate under different laws than your own country. I won't mention any names but If your interested just look at the larger banks of the world and check the broker's cash reserve. That will be your best indicator of a good or bad broker. I've personally been trading forex for a few years now and haven't had any problems with my current broker, but I won't say forex trading is easy by any means. As an independent investor your investments have practically no impact on the movement of the currencies. You have to keep your eyes on news announcements and place your bids based on how you think larger banks and fund managers are going to react to them. The best advise I can give though is DO NOT look at forex as a work at home job. It isn't a job, it's diversifying your investment portfolio. And if you can't resist greed then don't even attempt it. Professional traders only risk 10% of there accounts and a beginner should only be risking about 3% of there accounts.
Oh and by the way, rebeka0j was banned and my guess is that person was probably a broker trying to advertise the forex market. The more you look into it you'll find that happens quite often on forums. So like I said make sure you research your broker if you do choose to play the forex.
Not all forex broker is scam. I don't face any problem when withdraw fund from my forex broker dukascopy every week.
As a forex trader myself, forex trading is a lot of hardwork, with money management and trading psychology being the two most important aspects. Most techniques / indicators do work, but in the end, the trading decision belongs to the trader. As for forex broker, I recommend brokers registered with NFA ( National Futures Association ). At least, the brokers in this list are legit. Check it out here.
You can but I would suggest taking your $20 dollars and putting it into a high yield savings account. Seriously, you'll make more money. If you want to start trading forex first try out a demo account with play money. Almost all the brokers out there offer them. This will give you a feel for the market. If your successful after many trades then you might want to take it more seriously and start a good sized account. The last I've seen you can start an account for as little as $200 with a decent broker. Be leery of any broker that accepts less than that to open an account. Even $200 is small but with micro lots sizes you can build it over time.
yep. Good point there Wil. A lot of novice users try to trade after a few weeks of demo trade. I would recommend a few mths. 3 at least to get the feel. Also keep reading n update on forex developments.
Thank you for posting. It's really helpful. The proper forex software and forex training will surely help in forex trading. Once you enter online forex trading world it demands certain computer knowledge whether you like it or not. As a forex trader you are faced with computer tasks, one of which is installing and using forex trading software.
I learned a lot from this topic thanks a lot i was in need in that to know how to start forex trading i does not know any thing about that before and now thanks a lots all you guys for sharing such a nice information ...