Forex trading is no doubt one of the most popular ventures nowadays. A lot of people are entering the trade because the Forex market is liquid and open twenty-four hours a day. Hence, a trader can trade anytime and anywhere he wants. He can trade on the Paris exchange until the closing time and immediately switch to the New York exchange. He can actually trade in the major foreign exchange markets: New York, Zurich, Tokyo, London, Paris, and Frankfurt.
When you become a Forex trader, you will be able to benefit from a lot of leverage. For example, your $ 5,000 can be leveraged to purchase $ 500,000 through margins. This clearly shows that individual investors can actually trade with much more money than they currently have. Nonetheless, every trader should be careful. You should remember that Forex trading is not always about earning money. There can be instances in which you can lose a lot of money.
Anyway, if you are really decided to enter foreign exchange trading, you should open up an account with a Forex trading firm. You can choose from the various Forex trading firms available; just make sure that you check out each of them to know which one has the best offers. As a trader, you need to have access into the Forex market; and this access will be provided by your brokerage company.
Some firms even offer software programs to traders, so they can easily control their trades online. Of course, you should make sure that the Forex trading firm you choose is reliable. Keep in mind that the foreign exchange market operates worldwide and there is no global regulatory body. Thus, there are some unregulated brokers around.
The situation that you have to assess depends on your current geographic location.
Then, you should consider the services provided by the firm. Since foreign exchange goes on for twenty-four hours for five days per week, you should make sure that the trading software you get is accessible on these hours. You should be able to go online anytime you need; and in case you encounter some problems, you should be able to contact customer support immediately. Good Forex trading firms offer twenty-four hour customer support from Monday to Friday.
Also, you should verify whether they cover all of the major currency pairs: USD against GBP, EUR, CHF, AUD, CAD, and JPY. You may also want to have several cross pairs of major currencies if you intend to have a range of potential for trades. In addition, your firm should be able to provide you with technical analysis and charts. It will be more advantageous if they also offer immediate order execution at the displayed price with no slippage.
Furthermore, you should check out the charging fees applicable. Generally, Forex trading firms do not charge fees or commissions. Instead, they make money from spreads. You should also know the minimum investment required. There are firms that offer standard accounts with a minimum investment of at least $ 10,000; there are also others that offer much lower minimum account balance, usually as low as $ 250 to $ 1,000.