Maybe you have wondered exactly what is forex trading and how people make money with it. It may sound difficult or complex. But in fact, it is quite simple
So, what is Forex Trading and how does it help you earn fast money?
Forex trading can be defined as the currency exchange rate; this just represents the rate at which one currency can be exchanged with another. Trading currencies are when you buy and sell currencies on the forex market to make money. A currency of a country has a difference in values than another country’s currency and also an amount of money today is different than the value of money tomorrow. Therefore, it is from these funds value that we can do buying and selling and later earn profits. The amount of money you can earn from Forex trading is unlimited. The sky is the limit. If you have a consistently profitable strategy, then you can use leverage to multiply your earnings. For example, if a forex broker offers 1:100 leverage, this means you can trade a $100,000 position with just $1000 and a $10,000 position with just $100.
How is the Forex Structured?
Forex Trading is sometimes called the FX; the forex market is decentralized. This means that no single government, company or financial institution controls the forex or the trades that go on within it. While anchored in the major financial centers like London, New York and Tokyo, trades can take place anywhere in the world at almost any time (the exchange operates 24 hours per day, five days per week). Anything from large financial trading houses to central banks to individual brokers can make a forex trade anytime the market is open. By following the standard computations and principles, any forex trader will be able to predict the standard flow of the values of these currencies and in the process, earn more and lose less during the process. All of these transactions are usually done through the telephone or the electronic market via the internet since there is currently no known central forex market even in the United States, Europe and Japan as of today.
Best recommended places to start.
Your trading platform is your portal into the exciting world of forex trading. You’ll want to find software that is user-friendly and intuitive but also feature-rich and powerful enough to meet all your trading needs.
Most forex brokers offer demo accounts so you can always give their trading platforms a try before signing up for a real account.
The listed below are recommended platform to start.
- London Capital Group Forex Trading
- IG Forex Trading
- Inter Trader Forex Trading
- 3D Markets Financial Spread Betting Account.
- XTB UK Forex Trading
Why do I need a trading platform?
The forex market is completely electronic, which means there’s no central marketplace, so you’ll need to trade through a forex broker. Although you can buy or sell currencies directly through banks and other similar places, the advantages of forex brokers are all the added value they offer you like trading platforms and analysis tools. Finding a broker that you trust means it’ll free your time up to focus on making the most of your hard-earned investment through analysis and strategy.
What are the things to consider when choosing a trading platform?
There have been many numbers of online brokers in recent years. However, not all brokers are equal. For a profitable and successful trading, it is important to make sure the one you choose is safe, and the best fit your trading needs.
The highlighted below are things to consider.
- Proper regulation: Regulation is one of the most important factors to consider when choosing a forex trading platform. Proper control helps to ensure broker is adequately capitalized in the event of trading losses, keeps your funds in secure and segregated accounts, and maintains fair dealing practices to such trading platform. We strongly advise that you select a regulated broker with a clean regulatory record to benefit from this protection.
- A good Forex broker should have a positive reputation in the market. The status of a broker depends on many factors, but mostly on the company’s image and its history with existing customers.
- Data Security: To open an account with any Forex trading platform or brokers, you transmit a lot of personal and financial data. Brokers often require copies of your passport, utility bill as well as your bank account information and credit card numbers. Poor internet security practices can lead to your financial data being stolen, trading activity disrupted and even put you at risk for identity theft.
- Trade Execution: To get your trades filled at the best rates and promptly, it’s critical to find a forex broker with good trade execution practices.
- Product Coverage: Nowadays, you can trade more than just currencies with your forex broker. Innovative brokers will allow you to access most areas of the capital markets through a single forex account.
- Spreads, Commissions and Fees: Experienced traders know that trading costs can have a significant impact on profitability. While the difference of pip or two here and there might not seem that important, it will compound over time, particularly for active high-volume traders.
- Legitimacy: Due to the growing number of Forex brokers mentioned above, it is also important to verify the legitimacy of a brokerage before signing any contracts. Every Forex broker must be registered with the Futures Commission Merchant (FCM) and regulated by the Commodity Futures Trading Commission (CFTC).
The Forex retail market is always growing and understandably so. It has the greatest potential for profit out of any global market. However, don’t rush into it, check your Forex broker against the above criteria, establish a trading strategy, examine the market using technical and fundamental analysis, and always remember “The trend is your friend