WHAT IS THIS FOREX TRADING TREND ALL ABOUT?
You may have been hearing about the foreign exchange market (FOREX) and the money making advantages it offers. You would like to try it out, but don’t know where to start. This short guide will give you the basics in FOREX and tell you what you need to participate in this fast growing field.
Foreign exchange used to be limited to large players such as national banks and multinational corporations. In the 1980’s the rules were revised 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. Technology now allows anybody, anywhere in the world to access the FOREX market with a smart tablet, or computer with access to the Internet.
CAN I MAKE MONEY TRADING FOREX?
The short answer is yes. FOREX trading can be very lucrative, however education is needed to make wise investment decisions. Although it is relatively easy to start trading on the FOREX, there are risks involved, so learning from an experienced trader or finding out as much as possible about the market is a good move for any beginner. You might hear of people making thousands of money trading FOREX, however the majority of people lose money because they lack the knowledge and skills needed to make significant gains. With the proper guidance from an experienced trader, you can start with a small amount and compound your wins over time.
HOW DO I TRADE FOREX WITH MY PHONE?
The first step is to download Metatrader 4, which is a free app that interacts with FOREX brokers. Traders require a broker to handle transactions. Most online brokers are reputable and are associated with large financial institutions such as banks. A reputable broker will often be registered as a Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC) as protection against fraud and abusive trade practices.
- After due diligence, provide necessary licenses to eligible forex brokers to conduct forex trading business.
- Enforce required adherence to necessary capital requirements.
- Combat fraud.
- Enforce detailed record-keeping and reporting requirements regarding all transactions henekawatkisporter@gmail.comand related business activities.
The FOREX market operates 24 hours a day, 5 days a week. Each day as much as $6 Trillion moves through the FOREX market. The boundaryless space allows seamless access. For example, a trader in Jamaica or Australia can trade in euros and Japanese yen (EURJPY) through a broker based in the USA despite geographical boundaries.
Opening a FOREX account is as simple as filling in a form online with a broker and providing the necessary ID. The online form may include a margin agreement that states that the broker can interfere with any trade it deems to be too risky. This is to protect the interests of the broker in most trades, after all, trades are executed using the broker’s money. Once your account has been established, you can fund it and begin trading.
HOW MUCH MONEY DO I START WITH?
Many brokers have different types of accounts to suit the needs of individual investors. Micro and Mini accounts allow you to get involved in FOREX trading for as little as $2 to $50, while standard accounts may have a minimum deposit of $1000 to $2500 depending on the broker. The amount of leverage using borrowed money varies with accounts. High leverage gives you more money to trade for a given investment
HOWEVER, beginner traders are advised to 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 and apps that interact with the FOREX brokers. Every new FOREX investor is strongly advised to use these demo accounts at least until they are showing consistently steady profits.
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’, which is the difference between bid and ask prices.
Many brokers have their own set of apps or software to help in transactions, but there are a few tools that are common to all FOREX brokers. Real time quotes, news feeds, technical analysis and charts, and profit and loss analyses are some of the features you should expect to see on most online brokers’ web sites.
A VIRTUAL TRADEHOUSE TOUR
When you do a search online you will see there are several options for learning FOREX. However, be very careful about who you engage with because there are a lot of scams and flashy websites with false promises. Do not send your money to anyone to trade FOREX for you, regardless of how safe and simple the offer looks. It’s always best to get a solid education from a reputable institution that does not offer to make trades on your behalf.
In our upcoming webinar, we will continue to explore FOREX Trading and take you inside the Epic Trade House where you can look over the shoulder of master traders, ask questions and take trades.
*This is a sponsored post by Morris Sinclair: Morris Sinclair is a trader and financial literacy adviser. He is currently an independent representative of Epic Trading University.
