Forex trading - Getting Started

Forex trading - Getting Started

Where do I start? It is the first and most relevant question anyone who would like to try your luck in the foreign exchange market asks. Well here's something that will show you the way and tell you to equip. Time was when the exchange was an exclusive preserve of large banks and large corporations. Then came the 80s, throwing open the doors of the margin accounts of the smaller players. The rest is history. Suddenly, the whole world of Forex has become a great game and people could control $ 100,000 with only $ 1,000 investment - that is why it became such a hit - the margins were 100:1.

With amounts like these, who could have control over, it is obvious that there must be well versed in this area, if you want a reasonable success. As might be easier than staying there, as the investment is sometimes very high. If you want to do foreign exchange transactions, you are going to need a broker. Make sure he is a registered FCM (futures commission merchant), with the CFTC (Commodity Future Trading Commission).

How to open a Forex account? It really is very simple. All you have to do is fill out a form that includes the agreement to authorize the broker to stop any traffic that is too risky. The moment your account is opened, you can put in money and trade all you want. You can choose from many accounts your broker offers. It may be a mini account where all you need is $ 250 to start trading, or the default report, where you have $ 1,000 to $ 2,500. You also have what is known as leverage, where more leverage makes sure you have more money for trading.

Will start immediately? You could if you wanted to, but most brokers allow you to make "paper trades" or trades that do not involve money. This is a great way to practice before you start, as it gives you a sense of the market. They are called demo account and you can feel comfortable with them and "trade" until you find yourself making money. These accounts are usually yours to practice a month.

What are the tools one uses? You will find that your broker has certain characteristics that all brokers are like news, real-time quotes, charts, analysis. Some even have their own software to do transactions. Most brokers work on the Internet so you can be sure to get the best service, should have good computer with the latest operating system and a fast and reliable Internet connection. All you need to access your account will be your username and password. As trades are commission free, you can go ahead and do so many transactions as you want.