How to register for forex trading

Forex seems very exciting, but in reality, it should be boring and cut and dried.

Free forex bonuses

How to Open a Forex Trading Account, how to register for forex trading.

If you feel a great deal of anxiety when making trades, be careful. It's common to either get too wound up from your winning trades or become a destructive trader from your losing trades. The first thing you'll do is set up an account with a forex broker. You'll need to provide a good deal of personal information to get your account set up, including the following:

How to open a forex trading account

What is needed and why

An assortment of foreign currencies spread out on a surface

Artifacts images / digital vision / getty images

Forex trading sounds like an exciting financial opportunity to those who hear about it for the first time. The possibility of trading large sums of leveraged money sparks the imagination, but most who find the prospects of this market attractive will soon find they are surrounded by online hype and hyperbole.

The reality of trading is quite different from the sales pitches most people hear. That's because it is hard to be consistently profitable and most traders lose money in the early stages of their experience.

What is not hard, however, is actually opening a brokerage account. Choosing a brokerage is more meaningful if a beginner has actually tried out several different forex demo accounts.

Typical requirements to get started

The first thing you'll do is set up an account with a forex broker. You'll need to provide a good deal of personal information to get your account set up, including the following:

Name

Address

Phone number

Account currency type

A password for your trading account

Date of birth

Country of citizenship

Social security number or tax ID

Employment status

You will also need to answer a few financial questions, such as:

Industry compliance

You might wonder why forex brokers want to know all of this information. The simple answer is to comply with the law. The environment surrounding forex trading has a comparatively low degree of regulation, but in recent years, more regulations have been put in place to provide some degree of protection or assurance to account holders. Additionally, forex brokers need to ask these questions to protect themselves from the risk of loss. They want to make sure customers who overleverage themselves will still be able to pay back any unexpected losses.

It's unlikely that you will find any broker willing to open your trading account without requiring these questions to be answered. If you do happen to find one that isn't asking many questions, you should be suspicious. If you are ever feeling wary about a particular broker, you can look them up through the national futures association to find out their status.

Forex trading and risk

During the final steps of opening your account, you will see risk disclosures. Please take these seriously. Forex is a difficult business for beginners. It tends to eat them for dinner if they aren't careful. There are more losers than winners on average. The broker is required to remind you of the forex risks.

Once you've turned in all of your information to be processed, the broker will verify it and typically ask you to send in some verification documents such as a government-issued ID, and maybe a utility statement to verify your name and address. The back and forth process can slow down the process by a day or two, but it's nothing to concern you.

Once your information is verified, you can fund your account and begin trading. One piece of advice that I like to give to all new traders is not to put any money in the account that you cannot afford to lose.

It seems like obvious advice, but some people start off feeling like they know more than they do, and take unnecessary risks. Start with a fair amount of money and trade small. Nothing can prepare you for the emotions that you feel when your money is truly at risk, so go slow in the beginning.

Forex should be boring

Forex seems very exciting, but in reality, it should be boring and cut and dried. If you feel a great deal of anxiety when making trades, be careful. It's common to either get too wound up from your winning trades or become a destructive trader from your losing trades.

Learning to make trades using research and systematic logic will serve you much more than relying on emotion to guide your trading. Forex should feel like simple, methodical decision-making with precautionary steps in case of failure. While that might sound boring to you, you will survive much longer if you approach that market that way.

Keep your cool

If you find yourself feeling like you are making common forex mistakes and just generally feeling frustrated, stop trading, and review the basics again. Forex trading is one of those industries where occasionally you have to re-evaluate your methods to make sure you are achieving your goals. Try not to get too frustrated and keep your approach scientific and unemotional.

How to start trading forex (4 steps)

Welcome to the world of forex. There might be many reasons why you are reading this article. It could be that your friend or acquaintance mentioned about how they trade and perhaps even make a living by trading forex. Whatever your reasons may be; this article will give you an overview of the forex markets and how to start trading forex … and perhaps make money for yourself.

Step 1. What is forex?

Step 2. Learn forex basics

Step 3: find a forex broker

Step 4: start trading

Step 1. What is forex?

Forex, or foreign exchange is an unregulated market, also known as OTC (over-the-counter) and is the biggest market with average daily turn-over that runs into billions. It is even bigger than the US stock markets. Although due to its OTC nature, no one can really give the correct numbers as to the forex turnover. But nonetheless, forex is indeed a big market and thus allows many market participants. From your neighborhood bank to specialized investment companies, to your friend; the forex markets always offers a piece of the action whoever you are and wherever you are (even from your home).

The basic concept of trading forex is very simple. You trade or speculate against other traders on the direction of a currency.

So, if you believe that the euro is going to rise, you would BUY the euro, or SELL the euro if you think the euro would fall. It’s as simple as that.

Step 2. Learn forex basics

Before you get ready to deposit your funds and start trading there are some important points you must understand, each of which are outlined below.

Forex brokers: in order to start trading forex, you will need to trade with the help of a forex broker. There are many forex brokers out there today who allow you to open a forex trading account for as little as $5. The forex broker is the one who facilitates your buy and sell orders and also allows you to research into the markets (also known as technical or fundamental analysis) to help you make more informed decisions… and of course allows you deposit more funds or withdraw your profits when you want to. ( click here to see our forex brokers rating )

Trading platform:you need a trading platform from which you can place your trades, which are then sent to the broker for settlement. Also, a trading platform is essential for you to conduct your technical analysis and also to see the current market prices. Most retail brokers offer the MT4 (short for metatrader 4) trading platform, which is free of cost. You can also open a demo trading account and practice trading with virtual money to gain the experience required before trading with real money.

Forex trading hours:while you might have heard that the forex markets never sleeps, it actually does. Firstly, you won’t be able to trade on weekends (saturday and sundays). But for the rest of the week, the forex market operates 24 hours a day. This is due to the fact that forex trading is global. At any point in time, you will always find an overlap of a new market session while the previous market closes. What time of the day or which market session you trade plays a big role if you are an intra-day trader or a scalper. This is another vast topic, which we will cover at a later stage. ( click here to learn more about forex trading hours . )

Now that you have a basic overview of the forex markets, here are some final pointers to remember before you start trading for yourself.

What is a pip?:pip is a measure of change in a currency pair’s value and is the 5 th decimal. For example, if EURUSD changes from 1.31428 to 1.31429, the change is denoted as 1pip (1.31428 – 1.31429 = 0.00001). When you trade, the more pips you make, the more profit you have. Ex: buying EURUSD at 1.31428 and selling (or closing your trade) at 1.31528 would give you 100pips in profit. ( read more about forex PIP )

Reading quotes: forex quotes are presented in a bid and ask price (both of which vary by a few pips and from one broker to another). The bid price is the price at which you can buy and the ask price is the price as which you can sell. So, a EURUSD quote would look like this 1.31428(bid)/1.31420(ask).

What is a spread?: spread is nothing but the difference between the bid and ask price. So in the above example, for 1.31428/1.31420, the spread would be 8 pips. ( read more about forex spread)

What is a leverage?: leverage is the amount by which you can request your broker to magnify (or increase) your trade value. Leverage is often quoted in ratios such as 1:50, which means that when trading on a 1:50 leverage, your $100 is magnified to $50000. Leverage is a big topic in itself and it is recommended to read this article to learn more. Leverage is important both in terms of making profits as well as managing risks and therefore, your trades.

What is a lot?: A lot is a unit by which you place your trade. In financial terms, a lot is also referred to as a contract. There are preset lots (or contract sizes) that you can trade. For example a standard lot is nothing but 100,000 units (known as 1 lot). ( read more about lot)

Reading charts: the ability to understand and read the charts is very essential to trading. Depending on your approach, you can choose between a line, bar or candlestick charts and trade accordingly (for example trading based on candlestick patterns). ( read more how to read forex charts)

Placing orders (how to buy and sell): in forex trading, it is possible to either buy or sell any currency pair. Most trading platforms, give you this option. You buy when you think that price will go up and you sell when you think that price will fall. There is a common terminology used in forex trading, which is buy low, sell high; which is an important point to remember. ( read more how to place orders with MT4 )

Order types: besides buy and sell, another point to remember the types of orders. There are two basic order types: market orders and pending orders. When you click on ‘buy’ or ‘sell’ you are basically buying (or selling) at the current market price. A limit order on the other hand tells the broker that you want to buy or sell only at a particular price. ( read more about types of forex orders)

Step 3. Find a forex broker

forex how to start - Find a Forex Broker

As mentioned, there are many forex brokers today and therefore it can get confusing on how to choose the forex broker that is right for you. To briefly summarize, remember the following points while choosing a forex broker:

Look for a forex broker that is regulated

See if the forex broker offers a minimum deposit amount

What is the leverage that the broker offers

What is the minimum contract size that you can trade

Bonuses and the terms and conditions (see on our site list of forex deposit bonuses and forex no deposit bonuses)

Deposit and withdrawal types as well as the terms and conditions

Trading methods that are allowed by the broker

We can also help you choose a forex broker by reading our article how to choose forex broker

Step 4. Start trading

Finally, now that you have selected a forex broker to trade with it is recommended to first open a demo trading or a practice account. Most forex brokers offer unlimited demo trading account (but will be deactivated if not used for 30 days). This is a good way to get acquainted with the forex markets and also help you to understand your trading style (scalper or intra day trading, swing trading, etc) and approach (fundamental or technical analysis). You can search for various trading methods and systems or you can develop one yourself when you have a good understanding of technical or fundamental indicators.

Conclusion:

Forex trading is one of the most active and dynamic ways to trade the financial markets. At the heart of everything, it is the basic fluctuations in currency values which drives everything else. Learning to trade forex and understanding the forex markets can give a good foundation to trading other markets such as derivatives or equities.

How to start a forex trading business from home

If you are looking to set up your own forex trading business from home, you have come to the right place.

This post will tell you how you can make money by trading currency pairs. If you are a beginner, you must be aware that it involves some amount of risk, but you can learn to do it in an interesting manner and earn an income.

In the forex market, currencies worth US$5 trillion are traded on a daily basis. This means there is an opportunity for you to earn a lot of profits through your forex trading business without the need to invest too much of your hard-earned money. One of the biggest advantages is that you need not meet any formal requirements for starting a forex trading business.

The advantages of forex trading are as follows:

• unlike the stock market, the forex market operates round the clock.
• it is not possible for anyone to manipulate the forex market.
• the forex enables margin trading. This means that you can buy currencies worth thousands of dollars though you may have only less than US$100 with you. This is not possible in stock trading.

As such, all that you need to have with you are a little money, some amount of patience, a personal computer, and a reliable internet connection in order to become a currency trader. Here is how you can start your forex trading from home:

#1: learn the basics of currency trading

It is not easy to learn forex trading on your own through video tutorials. It is, therefore, recommended that you work with an expert to understand the nuances of trading. In addition, you should attend seminars/webinars and read a little bit to in order to sharpen your skills. Reading books on economics and business also helps you to broaden your insight, especially with respect to fundamental analysis. Additionally, you must master technical analysis as well.

#2: organize the trading capital

Fortunately, you are not required to have a large amount of money to start currency trading. This is because of the margin trading feature offered by brokers. You just need about US$10 to set up an account on the broker platform or you can use no-deposit bonus to start trading. However, it is a good idea to start with at least US$1,000 as it will ensure a little bit of buffer if you happen to incur losses.

#3: choose a reliable forex broker

Forex brokers make available online platforms to help you access the forex market and trade. You should go through the terms of trading before choosing any of the brokers. It is important that you work with the right forex broker in order to achieve your financial goals.

You should, therefore, compare the features offered by a few brokers prior to deciding to work with one. Some of the factors to be considered are trading options, terms and conditions, and user reviews. Then choose a broker that best fits your needs. You may also consult with an expert trader for this purpose.

#4: start by opening a demo account

After choosing the forex broker, open a demo account on the broker’s platform. The virtual account may be offered only for a certain specified amount of time period. However, it will give you an idea as to how you can use the trading platform offered by the broker. It will also be helpful in getting prepared for using the real platform. This means that you will not be using real money without testing the broker’s platform through the demo account.

#5: practice well

You cannot learn forex trading on the go. It is important to train yourself extensively so that you are in a position to buy and sell at the right time. You should trade on the demo platform for a few weeks so that the chances of you incurring losses are considerably reduced.

A demo account helps you to learn to implement various trading strategies successfully and develop a trading style of your own.

#6: start trading with real money

Open a live trading account with the forex broker after you have practiced enough and gained the confidence to go live. Actually, you should be able to convert the demo account into a live account. You may have to just deposit the minimum amount specified by the broker.

Some trading strategies will fetch you huge profits, some others will not work for you. The secret to increasing profits is repeating what works for you and avoiding what does not.

How to open a forex trading account

So after demo trading on at least three broker platforms, you’ve narrowed down your choice to a single forex broker?

After finding the right broker for you, you can open a forex trading account in three simple steps:

Selecting an account type

Registration

Activating your account

Why not? It’s all FREE! Make sure to try out and “kick the tires” of several different brokers to get a feel for the right one for you.

Choosing an account type

When you’re ready to open a live account, you have to choose which type of forex trading account you want: a personal account or a business (aka corporate) account.

In the past, when opening a forex trading account, you’d also have to choose whether you wanted to open a “standard” account, a “mini” account, or a “micro” account.

This is great for newbie and inexperienced traders who only have a small account of capital.

This provides you great flexibility, as you won’t have to trade bigger than you’re comfortable with.

Also, always, always, always remember: always read the fine print.

Some brokers have a “managed account” option in their application forms. If you want the broker to trade your account for you, you can pick this.

But is this what you really want? After all, you didn’t read through the whole school of pipsology just to have someone else trade for you!

Besides, opening a managed account requires a pretty big minimum deposit, normally $25,000 or higher. Also, the manager will also take a cut out of any profits.

Lastly, make sure you open a forex spot account and not a forwards or futures account.

Registration

You will have to submit paperwork in order to open an account and the forms will vary from broker to broker.

They are usually provided in PDF format and can be viewed and printed using adobe acrobat reader program.

Also, make sure you know all the associated costs, like how much your bank charges for a bank wire transfer. You’d be surprised how much these actually cost, and they may actually take up a significant portion of your trading capital.

Account activation

Once the broker has received all the necessary paperwork, you should receive an email with instructions on completing your account activation.

So all that’s left is for you to log in and start trading. Pretty easy huh?

Time to log in, pop open those charts, and start trading!

But wait just one minute!

We strongly advise you DEMO trade first.

There’s no shame in demo trading. Everyone has to start somewhere.

If you have been demo trading for at LEAST a month, then maybe you can dip your feet into live trading. Even then, we suggest you go in the shallow end and consider how much you want to risk.

Trading live is a different beast altogether. It’s like the difference between sparring against your kid brother (or sister) and fighting manny pacquiao.

If you start trading live without any demo trading experience, this is what usually happens:

But no matter how successful you were in demo trading, nothing can replace the feeling of having real money on the line.

And once you’ve started trading on a live account, never get too comfortable. Always remain vigilant and use proper risk management.

Otherwise, this might happen:

How to become a forex trader & build an FX mindset

Becoming a forex trader means living and breathing the excitement, risk and reward of trading in the biggest and most liquid market in the world. Do you have what it takes? In this piece we'll explore how you can become a forex trader, revealing the qualities you need and the processes to follow to get started and be a consistent trader.

What does a forex trader do?

A forex trader takes long or short positions on currency pairs with the goal of making a profit. A forex trader is strategic, disciplined and always switched on to the markets. Whether focused on a technical or fundamental approach, or both, he or she will be looking to build an understanding of currency pairs’ behavior and set up profitable trades.

Forex trader symbols and currency market rates

In the 24-hour currency market , trading never sleeps, meaning there will always be action, although forex liquidity levels will peak and trough at certain points around the clock. Some traders may wish to operate in unsociable hours to put them in a position to capitalize on international markets.

What it takes to be an effective forex trader, by the dailyfx analysts

So what does it take to be an effective forex trader? From possessing a passion for the markets to having unshakeable discipline and more, here are the traits that will assist you as a forex trader from the horse’s mouth: our top analysts.

“you must have a real interest - passion even - in whatever financial market/s you are going to trade” – nick cawley

When trading the foreign exchange markets, you must have a real interest and understanding of monetary policy, one of the main movers of price action. For example, if you are trading GBP/USD you need to be fully in tune with all bank of england and US federal reserve policy moves and speeches – both drive the market. So aim to be on the same wavelength as the central bank/s, but don’t bet against them - they have big pockets and nearly always win.

2) under stand the macro drivers

“it's vitally important for traders to know that all currencies can have many macro drivers at any given point” – david cottle

The australian dollar is a primary example of a currency driven by a range of macro factors. It is often thought of as a ‘growth’ or ‘risk’ correlated unit – one which is likely to gain when the world feels better about global growth and struggle when the reverse is the case. While this is often true, there are a huge number of other possible drivers. Major commodity prices , australian monetary policy prospects and localized political risk can all see it move against the general market grain at times.

In these days of highly correlated markets it’s tempting to separate currencies into ‘risk on’ and ‘risk off’ camps but this is far too simplistic.

3) remember : I t takes two to forex tango

“ currency pairs are driven by both sides of the equation ” – martin essex

When trading currencies, a trader needs to understand what is happening in both relevant territories. For example, when trading GBP/USD, it’s advisable to keep up with the most recent brexit news in addition to the latest on the US/china trade war . More generally, though, a good understanding of market trading is important, from stop losses to chart patterns; from market psychology to the role of central banks .

4) exercise proper money management

“you can have the best forex trade ideas in the world and still lose if you can't limit losses and capture profits” – david rodriguez

Sound money management is the key difference between the hobbyist and the expert trader. To wit, real data from a major FX broker showed that its clients closed EUR/USD trades out at a gain 61% of the time, and yet lost money because the average winning trade was 48 pips while the average loser was 83 pips. That’s no way to make money, and that’s exactly why money management is the difference-maker between a hobbyist and a successful professional.

Online forex trading: A beginner’s guide

What is forex trading and how does it work?

At FXTM, we are committed to ensuring our clients are kept up-to-date on the latest products, state-of-the-art trading tools, platforms and accounts.

For those just getting started, we have created a comprehensive beginner’s guide to introduce you to forex terminology, answer common faqs and, most importantly, keep things simple.
Looking for a breakdown of forex terminology? Head over to our glossary page.

What is the forex market?

Foreign exchange (also known as forex or FX) refers to the global, over-the-counter market (OTC) where traders, investors, institutions and banks, exchange, speculate on, buy and sell world currencies.

Trading is conducted over the ‘interbank market’, an online channel through which currencies are traded 24 hours a day, five days a week. Forex is one of the largest financial markets, with an estimated global daily turnover of more than US$5 trillion.

What is forex trading?

Forex trading is the act of buying or selling currencies. Banks, central banks, corporations, institutional investors and individual traders exchange foreign currency for a variety of reasons, including balancing the markets, facilitating international trade and tourism, or making a profit.

Currency is traded in pairs, in both spot and futures markets. The value of a currency pair is driven by economic, political and environmental factors, such as wars, natural disasters, or national elections.

What is a forex broker?

Brokers act as intermediaries, facilitating trades by providing clients access to the 24-hour interbank
in order to conduct trades.

FXTM offers a number of different accounts, each providing services and features tailored to our clients’ individual trading objectives. Discover the account that’s right for you on our account page. New to forex trading? Learn about the markets by opening a demo account page.

Understanding currency pairs

All transactions made on the forex market involve the simultaneous purchasing and selling of two currencies.
These are called ‘currency pairs’, and include a base currency and a quote currency. The diagram below represents the forex pair EUR/USD (euro/US dollar), one of the most common currency pairs traded on the forex market.

Sell 1 euro for 1.0916 US dollars

Buy 1 euro for 1.0918 US dollars

1.0918 - 1.0916 = 0.0002 (2 pips)

Base currency

The base currency is the first currency that appears in a forex pair. This currency is bought or sold in exchange for the quote currency.
So, based on the example above, it will cost a trader 1.0916 USD to buy 1 EUR.
Alternatively, a trader could sell 1 EUR for 1.0916 USD.

Quote currencies

The second currency of a currency pair is called the quote currency. In EUR/USD for example, USD is the quote currency.

Ask price

Tthe ask price is the value at which a trader accepts to buy a currency .

Bid price

The bid price is the value at which a trader is prepared to sell a currency.

Spread

A spread is the difference between the ask price and the bid price. In other words, it is the cost of trading.
For example, if the euro to US dollar is trading with an ask price of 1.0918 and a bid price of 1.0916, then the spread will be the ask price minus the bid price. In this case, 0.0002.

A point in price – or pip for short – is a measure of the change in a currency pair in the forex market.
The acronym can also stand for ‘percentage in point’ and ‘price interest point’. A pip is used to measure price movements, and it represents a change in a currency pair. Most currency pairs are quoted to five decimal places.

Note: forex prices are often quoted to four decimal places because their spread differences are typically very small. However, there is no definitive rule when it comes to the number of decimal places used for forex quotes.

On the forex market, trades in currencies are often worth millions, so small bid-ask price differences (i.E. Several pips) can soon add up to a significant profit. Of course, such large trading volumes mean a small spread can also equate to significant losses.
Always trade carefully and consider the risks involved.

Visualising
currency trades

Trades & key terminology

A ‘position’ is the term used to describe a trade in progress. A long position means a trader has bought a currency expecting its value to increase. Once the trader sells that currency back to the market (ideally for a higher price than he paid for it), his long position is said to be ‘closed’ and the trade is complete.
A short position refers to a trader who sells a currency expecting its value to decrease, and plans to buy it back at a lower price. A short position is ‘closed’ once the trader buys back the asset (ideally for less than he sold it for).

For example, if the currency pair EUR/USD was trading at 1.0916/1.0918, then an investor looking to open a long position on the euro would purchase 1 EUR for 1.0918 USD. The trader will then hold on to the euro in the hopes that it will appreciate, selling it back to the market at a profit once its price has increased.

An investor going short on the EUR would sell 1 EUR for 1.0916 USD. This trader expects the euro to depreciate, and plans to buy it back at a lower rate if it does.

What are the most traded currency pairs on the forex market?

There are seven major currency pairs on the forex market. Other brackets include crosses and exotic currency pairs, which are less commonly traded and all relatively illiquid (i.E., not easily exchanged for cash).

MAJOR CURRENCY PAIRS

Major currency pairs are the most commonly traded, and account for nearly 80% of trade volume on the forex market.
These currency pairs could typically have low volatility and high liquidity.

They are associated with stable, well managed economies, are less susceptible to manipulation and have smaller spreads than other pairs.

CROSSES

Cross currency pairs – crosses – are pairs that do not include the USD.
Historically, crosses were converted first into USD and then into the desired currency, but are now offered for direct exchange.

The most commonly traded are derived from minor currency pairs (e.G. EUR/GBP, EUR/JPY, GBP/JPY); they are typically less liquid and more volatile than major currency pairs.

EXOTIC CURRENCY PAIRS

Exotics are currencies from emerging or smaller economies, paired with a major.

Compared to crosses and majors, exotics are much riskier to trade because they are less liquid, more volatile, and more susceptible to manipulation.

They also contain wider spreads, and are more sensitive to sudden shifts in political and financial developments.

We’ve created a table below which showcases several different currency pairs from each bracket, as well as some nicknames which were coined by traders themselves.

7 MAJOR PAIRS

6 MINOR PAIRS

6 EXOTIC PAIRS

Brackets

MAJOR CURRENCY PAIRS

MINOR CURRENCY PAIRS

EXOTIC CURRENCY PAIRS

Nicknames

Popular currency pairs

Abbreviations

UNDERSTANDING FOREX CHARTS

CANDLESTICK CHART

A candlestick is a chart, also known as a japanese candlestick chart, that is often favoured by traders due to the wide range of information it portrays. The chart displays the high, low, opening and closing prices.

A candlestick has three points: open, close and the wicks.
The wicks show the high to low range and the 'real body' (wide section) shows investors if the closing price was higher or lower than the opening price.

If the candlestick is filled, then the currency pair closed lower than it opened. If the candlestick is hollow, then the closing price is higher than the opening price.

BAR CHART

A bar chart shows the opening, close, high and low of the currency pair’s prices.

The top of the bar represents the highest paid price and the bottom indicates the lowest traded price for that specific time period.

The actual bar represents the currency pair's overall trading range and the horizontal lines on the sides represent the opening (left) and the closing prices (right).

A bar chart is most commonly used to identify the contraction and expansion of price ranges.

LINE CHART

A line chart is easy to understand for forex trading beginners. In a line chart, a line is drawn from one closing price to the next.

When connected, it is easy to identify a general price movement of a currency pair throughout a time period and determine currency patterns.

NEED TO KNOW MORE ABOUT TRADING FOREX?

How to start trading with a forex broker

A broker such as FXTM acts an intermediary between the traders and the liquidity providers. It facilitates in the execution of clients’ orders.

It is recommended to choose a licensed, regulated broker that has at least 5 years of proven experience. If your broker abides by regulatory rules, then you can be sure that they are legitimate.

Once you have an active account, you can trade — but you will be required to make a deposit to cover the costs of your trades. This is called a margin account.

However, it’s really important to remember that becoming a profitable trader isn’t an overnight process. It takes time to become familiar with the markets, and there’s a whole new vocabulary to learn. For this reason, reputable brokers like FXTM offer a demo account. This is a great way to experiment with different trading strategies – but with virtual money and none of the risk!

Once you’re ready to move on to live trading, we’ve got a great range of trading accounts to suit you.

Learn forex trading

As a global broker, we’re firm believers that developing a sound understanding of the markets is imperative to a trader’s potential to succeed. That’s why FXTM offer a vast range of industry-leading educational resources in a variety of languages which are tailored to the needs of both new and experienced traders.

These include free webinars, ebooks, articles and more. Prefer to learn from an expert in person? We also hold insightful seminars and workshops in various regions around the world that a cover a multitude of topics.

There are also many forex tools available to traders such as margin calculators, pip calculators, profit calculators, economic trading calendars, trading signals and foreign exchange currency converters.

Forex widgets can help to enhance your trading experience. Some of the more popular widgets include live rates feed, live commodities quotes, live indices quotes, and market update widgets.

MT4 & MT5 webtrader platforms

A forex trading platform is an online software which enables investors to access the foreign exchange market. It can be used to open, close and manage trades from the device of their choice and contains a variety of tools, indicators and timeframes designed to allow you to monitor and analyse the markets in real-time.

As a leading global broker, FXTM are committed to providing services tailored to the needs of our clients. As such, we’re s proud to offer our traders the choice of two of the industry’s leading forex trading platforms; metatrader 4 (MT4) and metatrader 5 (MT5). They are both available on a PC, mac, mobile (ios and android) or tablet.

Metatrader 4

Metatrader 4, also known as MT4, provides access to a range of markets and hundreds of different financial instruments, including foreign exchange, commodities, cfds and indices.

It provides you with all the tools you need to both manage your trades and analyse the markets, whilst also being completely free to download.

With the metatrader 4 platform, you’ll enjoy easy-to-read, interactive charts that allow you to monitor and analyse the markets in real-time. You’ll also have access to more than 30 technical indicators which can help you to identify market trends and signals for entry and exit points.

Metatrader 5

Metatrader 5, or MT5, is the newest and most advanced online and free trading platform. Trading on MT5 via FXTM gives you even greater access to financial markets including foreign exchange, commodities, cfds, stocks, futures and indices.

Its diverse functionality, fundamental and technical analysis tools, copy trading and automated trading equip you with the best tools and instruments available.

Other great benefits of MT5 include a multi-threaded strategy tester, fund transfer between accounts and a system of alerts to keep up to date with all the latest market events. Traders can also communicate through the embedded MQL5 community chat to network with other traders and share tips and strategies.

These platforms, combined with innovative services such as FXTM’s pivot point tool and FXTM invest, as well an award-winning customer support team, ensures FXTM traders have all the resources they need to trade with confidence.

You can find out more about our trading platforms, or download MT4 and MT5 from our trading platforms page.

Still not trading with a world-leading broker? Sign up today.

How to start trading forex (4 steps)

Step 1. What is forex?

Step 2. Learn forex basics

Step 3: find a forex broker

Step 4: start trading

Step 1. What is forex?

The basic concept of trading forex is very simple. You trade or speculate against other traders on the direction of a currency.

So, if you believe that the euro is going to rise, you would BUY the euro, or SELL the euro if you think the euro would fall. It’s as simple as that.

Step 2. Learn forex basics

Before you get ready to deposit your funds and start trading there are some important points you must understand, each of which are outlined below.

Now that you have a basic overview of the forex markets, here are some final pointers to remember before you start trading for yourself.

What is a spread?: spread is nothing but the difference between the bid and ask price. So in the above example, for 1.31428/1.31420, the spread would be 8 pips. ( read more about forex spread)

Step 3. Find a forex broker

Look for a forex broker that is regulated

See if the forex broker offers a minimum deposit amount

What is the leverage that the broker offers

What is the minimum contract size that you can trade

Bonuses and the terms and conditions (see on our site list of forex deposit bonuses and forex no deposit bonuses)

Deposit and withdrawal types as well as the terms and conditions

Trading methods that are allowed by the broker

We can also help you choose a forex broker by reading our article how to choose forex broker

Step 4. Start trading

Conclusion:

Forex trading: A beginner's guide

Forex is a portmanteau of foreign currency and exchange. Foreign exchange is the process of changing one currency into another currency for a variety of reasons, usually for commerce, trading, or tourism. According to a recent triennial report from the bank for international settlements (a global bank for national central banks), the average was more than $5.1 trillion in daily forex trading volume.

Key takeaways

The foreign exchange (also known as FX or forex) market is a global marketplace for exchanging national currencies against one another.

Because of the worldwide reach of trade, commerce, and finance, forex markets tend to be the largest and most liquid asset markets in the world.

Currencies trade against each other as exchange rate pairs. For example, EUR/USD.

Forex markets exist as spot (cash) markets as well as derivatives markets offering forwards, futures, options, and currency swaps.

Market participants use forex to hedge against international currency and interest rate risk, to speculate on geopolitical events, and to diversify portfolios, among several other reasons.

What is the forex market?

The foreign exchange market is where currencies are traded. Currencies are important to most people around the world, whether they realize it or not, because currencies need to be exchanged in order to conduct foreign trade and business. If you are living in the U.S. And want to buy cheese from france, either you or the company that you buy the cheese from has to pay the french for the cheese in euros (EUR). This means that the U.S. Importer would have to exchange the equivalent value of U.S. Dollars (USD) into euros. The same goes for traveling. A french tourist in egypt can't pay in euros to see the pyramids because it's not the locally accepted currency. As such, the tourist has to exchange the euros for the local currency, in this case the egyptian pound, at the current exchange rate.

One unique aspect of this international market is that there is no central marketplace for foreign exchange. Rather, currency trading is conducted electronically over-the-counter (OTC), which means that all transactions occur via computer networks between traders around the world, rather than on one centralized exchange. The market is open 24 hours a day, five and a half days a week, and currencies are traded worldwide in the major financial centers of london, new york, tokyo, zurich, frankfurt, hong kong, singapore, paris and sydney—across almost every time zone. This means that when the trading day in the U.S. Ends, the forex market begins anew in tokyo and hong kong. As such, the forex market can be extremely active any time of the day, with price quotes changing constantly.

A brief history of forex

Unlike stock markets, which can trace their roots back centuries, the forex market as we understand it today is a truly new market. Of course, in its most basic sense—that of people converting one currency to another for financial advantage—forex has been around since nations began minting currencies. But the modern forex markets are a modern invention. After the accord at bretton woods in 1971, more major currencies were allowed to float freely against one another. The values of individual currencies vary, which has given rise to the need for foreign exchange services and trading.

Commercial and investment banks conduct most of the trading in the forex markets on behalf of their clients, but there are also speculative opportunities for trading one currency against another for professional and individual investors.

Spot market and the forwards & futures markets

There are actually three ways that institutions, corporations and individuals trade forex: the spot market, the forwards market, and the futures market. Forex trading in the spot market has always been the largest market because it is the "underlying" real asset that the forwards and futures markets are based on. In the past, the futures market was the most popular venue for traders because it was available to individual investors for a longer period of time. However, with the advent of electronic trading and numerous forex brokers, the spot market has witnessed a huge surge in activity and now surpasses the futures market as the preferred trading market for individual investors and speculators. When people refer to the forex market, they usually are referring to the spot market. The forwards and futures markets tend to be more popular with companies that need to hedge their foreign exchange risks out to a specific date in the future.

More specifically, the spot market is where currencies are bought and sold according to the current price. That price, determined by supply and demand, is a reflection of many things, including current interest rates, economic performance, sentiment towards ongoing political situations (both locally and internationally), as well as the perception of the future performance of one currency against another. When a deal is finalized, this is known as a "spot deal." it is a bilateral transaction by which one party delivers an agreed-upon currency amount to the counter party and receives a specified amount of another currency at the agreed-upon exchange rate value. After a position is closed, the settlement is in cash. Although the spot market is commonly known as one that deals with transactions in the present (rather than the future), these trades actually take two days for settlement.

Unlike the spot market, the forwards and futures markets do not trade actual currencies. Instead they deal in contracts that represent claims to a certain currency type, a specific price per unit and a future date for settlement.

In the forwards market, contracts are bought and sold OTC between two parties, who determine the terms of the agreement between themselves.

In the futures market, futures contracts are bought and sold based upon a standard size and settlement date on public commodities markets, such as the chicago mercantile exchange. In the U.S., the national futures association regulates the futures market. Futures contracts have specific details, including the number of units being traded, delivery and settlement dates, and minimum price increments that cannot be customized. The exchange acts as a counterpart to the trader, providing clearance and settlement.

Both types of contracts are binding and are typically settled for cash at the exchange in question upon expiry, although contracts can also be bought and sold before they expire. The forwards and futures markets can offer protection against risk when trading currencies. Usually, big international corporations use these markets in order to hedge against future exchange rate fluctuations, but speculators take part in these markets as well.

Note that you'll often see the terms: FX, forex, foreign-exchange market, and currency market. These terms are synonymous and all refer to the forex market.

Forex for hedging

Companies doing business in foreign countries are at risk due to fluctuations in currency values when they buy or sell goods and services outside of their domestic market. Foreign exchange markets provide a way to hedge currency risk by fixing a rate at which the transaction will be completed.

To accomplish this, a trader can buy or sell currencies in the forward or swap markets in advance, which locks in an exchange rate. For example, imagine that a company plans to sell U.S.-made blenders in europe when the exchange rate between the euro and the dollar (EUR/USD) is €1 to $1 at parity.

The blender costs $100 to manufacture, and the U.S. Firm plans to sell it for €150—which is competitive with other blenders that were made in europe. If this plan is successful, the company will make $50 in profit because the EUR/USD exchange rate is even. Unfortunately, the USD begins to rise in value versus the euro until the EUR/USD exchange rate is 0.80, which means it now costs $0.80 to buy €1.00.

The problem the company faces is that while it still costs $100 to make the blender, the company can only sell the product at the competitive price of €150, which when translated back into dollars is only $120 (€150 X 0.80 = $120). A stronger dollar resulted in a much smaller profit than expected.

The blender company could have reduced this risk by shorting the euro and buying the USD when they were at parity. That way, if the dollar rose in value, the profits from the trade would offset the reduced profit from the sale of blenders. If the USD fell in value, the more favorable exchange rate will increase the profit from the sale of blenders, which offsets the losses in the trade.

Hedging of this kind can be done in the currency futures market. The advantage for the trader is that futures contracts are standardized and cleared by a central authority. However, currency futures may be less liquid than the forward markets, which are decentralized and exist within the interbank system throughout the world.

Forex for speculation

Factors like interest rates, trade flows, tourism, economic strength, and geopolitical risk affect supply and demand for currencies, which creates daily volatility in the forex markets. An opportunity exists to profit from changes that may increase or reduce one currency's value compared to another. A forecast that one currency will weaken is essentially the same as assuming that the other currency in the pair will strengthen because currencies are traded as pairs.

Imagine a trader who expects interest rates to rise in the U.S. Compared to australia while the exchange rate between the two currencies (AUD/USD) is 0.71 (it takes $0.71 USD to buy $1.00 AUD). The trader believes higher interest rates in the U.S. Will increase demand for USD, and therefore the AUD/USD exchange rate will fall because it will require fewer, stronger USD to buy an AUD.

Assume that the trader is correct and interest rates rise, which decreases the AUD/USD exchange rate to 0.50. This means that it requires $0.50 USD to buy $1.00 AUD. If the investor had shorted the AUD and went long the USD, he or she would have profited from the change in value.

Currency as an asset class

There are two distinct features to currencies as an asset class:

You can earn the interest rate differential between two currencies.

You can profit from changes in the exchange rate.

An investor can profit from the difference between two interest rates in two different economies by buying the currency with the higher interest rate and shorting the currency with the lower interest rate. Prior to the 2008 financial crisis, it was very common to short the japanese yen (JPY) and buy british pounds (GBP) because the interest rate differential was very large. This strategy is sometimes referred to as a "carry trade."

Why we can trade currencies

Currency trading was very difficult for individual investors prior to the internet. Most currency traders were large multinational corporations, hedge funds or high-net-worth individuals because forex trading required a lot of capital. With help from the internet, a retail market aimed at individual traders has emerged, providing easy access to the foreign exchange markets, either through the banks themselves or brokers making a secondary market. Most online brokers or dealers offer very high leverage to individual traders who can control a large trade with a small account balance.

Forex trading: A beginner’s guide

Forex trading risks

Trading currencies can be risky and complex. The interbank market has varying degrees of regulation, and forex instruments are not standardized. In some parts of the world, forex trading is almost completely unregulated.

The interbank market is made up of banks trading with each other around the world. The banks themselves have to determine and accept sovereign risk and credit risk, and they have established internal processes to keep themselves as safe as possible. Regulations like this are industry-imposed for the protection of each participating bank.

Since the market is made by each of the participating banks providing offers and bids for a particular currency, the market pricing mechanism is based on supply and demand. Because there are such large trade flows within the system, it is difficult for rogue traders to influence the price of a currency. This system helps create transparency in the market for investors with access to interbank dealing.

Most small retail traders trade with relatively small and semi-unregulated forex brokers/dealers, which can (and sometimes do) re-quote prices and even trade against their own customers. Depending on where the dealer exists, there may be some government and industry regulation, but those safeguards are inconsistent around the globe.

Most retail investors should spend time investigating a forex dealer to find out whether it is regulated in the U.S. Or the U.K. (dealers in the U.S. And U.K. Have more oversight) or in a country with lax rules and oversight. It is also a good idea to find out what kind of account protections are available in case of a market crisis, or if a dealer becomes insolvent.

Pros and challenges of trading forex

Pro: the forex markets are the largest in terms of daily trading volume in the world and therefore offer the most liquidity. this makes it easy to enter and exit a position in any of the major currencies within a fraction of a second for a small spread in most market conditions.

Challenge: banks, brokers, and dealers in the forex markets allow a high amount of leverage, which means that traders can control large positions with relatively little money of their own. Leverage in the range of 100:1 is a high ratio but not uncommon in forex. A trader must understand the use of leverage and the risks that leverage introduces in an account. Extreme amounts of leverage have led to many dealers becoming insolvent unexpectedly.

Pro: the forex market is traded 24 hours a day, five days a week—starting each day in australia and ending in new york. The major centers are sydney, hong kong, singapore, tokyo, frankfurt, paris, london, and new york.

Challenge: trading currencies productively requires an understanding of economic fundamentals and indicators. A currency trader needs to have a big-picture understanding of the economies of the various countries and their inter-connectedness to grasp the fundamentals that drive currency values.

The bottom line

For traders—especially those with limited funds—day trading or swing trading in small amounts is easier in the forex market than other markets. For those with longer-term horizons and larger funds, long-term fundamentals-based trading or a carry trade can be profitable. A focus on understanding the macroeconomic fundamentals driving currency values and experience with technical analysis may help new forex traders to become more profitable.

How to start forex trading investment for beginners

Darlington omeh mar 11 th , 2016 finance-forex & trading 57 comments

Forex trading used to be the exclusive business of the banks where the banks make millions of dollars by just exchanging the currencies of different countries. But the internet has changed all that and now you can trade forex even in your own bedroom with as little as $100 start up capital. While it is possible to start forex trading with $100, it is however not advisable for profit sake. In this article, I will be endeavor to address some of the mysteries about forex trading for beginners.

Is forex trading still profitable for ordinary individual? How much can you possibly earn trading forex on part time or as full time trader? What are the risks involved in forex trading that you need to be aware of. Can average person start a forex trading business with basic knowledge about money market and financial management? All these and more will be answered in no particular order in this article. So, follow through to the end and don’t forget to drop a comment.

What exactly is forex trading?

Forex trading can be defined as the online/internet currency exchange trade or act of simultaneously buying and selling currencies of different countries online using internet trading platforms. Forex stands for foreign exchange so, forex trading simply means foreign exchange trading or trading on foreign currency by its exchange rate. Since forex trading involves the disparities in foreign exchange rates, making profit or loss in forex trade is usually determined by the economic state of different countries at a time.

Since the economy of different countries is not static in relation to one another at any point in time, the forex market is never fixed or stagnant at any point in time as well. It is a volatile market that is constantly changing and are never accurately predicted. This is where the profit or loss is made. If the currency goes up in your favor, you make profit, it it goes down against you, you make loss.

Understanding the forex market

To understand the forex market and be good at it, you have to avail yourself to serious training in forex trading! You must acquire the technical knowledge required in forex trading. You must have enough time and willingness to study this ever changing price market over a period of time and be up to date with the local and foreign news as global trends have a tendency to determine the direction the prices of the currency goes, either up or down.

To assist you in the learning process, it is important to use a demo account for practice. Almost all the forex trading platforms have demo accounts were you can practice forex trading in what looks like real time trading. The demo accounts are loaded with virtual money and in real time mode. The only difference is that you neither make profit nor loss in demo trading.

You need to continue to practice with the forex demo account until you become very proficient. You must be good with the virtual trade before you ever attempt with real money because once you are up with the real money, there is no going back, its either profit or loss. From then, it becomes investment that must be handled very seriously. Your investment in forex trading is not something you joke with, you need to be up to date with knowledge and information. You must be into it and do research regularly.

How to get started with your forex trade

Before you proceed to open an account with any forex broker, you must understand that not all forex brokers are genuine. Make a thorough research before settling with any trading platform with real time investment. I will advice you use the big and established forex trading platforms only.

Open account with forex brokers

Go to the website of your desired forex brokers and open account. Forex broker or the forex trading platforms is the medium through which currency is traded online.

Fund your forex account

Before you start live forex trade, you must fund your account. Funding can be done through direct deposit or by using your credit/debit cards.

Have A domiciliary account

This is very important for effective transaction and to enable you make a withdrawal of your profit when there is any. Some use other currency medium like the ecurrencies but at the end, it will still get to domiciliary accounts. The dom account is used for cashing or depositing funds into your forex trading account.

Fast internet connection

You need a very fast and reliable internet connection to be able to trade forex in nigeria or elsewhere. Without this, it will be difficult for you to make profit because your internet has to be fast and reliable to enable you take quick actions.

High performing laptop

This is very necessary for efficiency and accurate performance in live market. Do not make the mistake of using a wacky laptop for forex trading. Most times, the losses people make is as a result of inefficient trading devices.

The profit you make depends on your trading skills. Yes, people are still making profit in forex trading in nigeria and will continue to make profit as long as currency remain in use. In fact, nothing has changed and will probably change forever.

Start a forex trade with little capital is never a good idea. You need to invest something substantial to make reasonable profit. A serious trader trades with thousands of dollars. I have seen people make hundreds of thousands of dollars with forex trade and you too can.

So, let's see, what we have: looking to open a forex trading account? Find out how to do it and get information on the requirements you need to get started. At how to register for forex trading