How to trade and open your Forex account?
So, are you ready to trade now? Ensure that you know information below to know how you can set up our forex account so you are able to start trading currencies. There are many questions about how to deal in forex? Especially for beginner. So, basic information bellow will lead you to know more about forex trading. Basic can be your best foundation to learn more. There are other factors that you should know before take these steps.
How to deal in Forex? Where you start?
Open your forex brokerage account
Forex trading also similar with the equity market because of many individuals who are interesting in trading should open up their trading account first. Similar with equity market, each forex account and service will provide differ, so this is important to know the right one for you. There are several factors that you should consider when you choose a forex account, they are:
Leverage was basically an ability to control amount in the capital by using very little amount in capital. You should know that the higher leverage, the higher of risk as well, the leverage in your account also different depending on that account itself, however most of them use the factor at least in 50:1, which being as high as 250:1.
The leverage factor 50:1 means that each dollar that you have in your account, you will control up to %50. For example, if the trader has $1000 in his account, broker will lend that person with $50,000 to be traded in the market. So, this leverage also can make your margin as well, or your amount that you should have in your account to transaction in certain amount, very low.
Leverage can be seen as the, major benefit in this forex trading, because its allow you to get high gains only in small investment. However, leverage can be an extreme thing if your trade moves being against you because you are loss which are amplified by leverage s well. So, in this reason you should remember when opening your account and what you should decide leverage that you want, you should understand the risk involved as well.
– Fees and commissions
The other great benefit of forex account is that you trade with commission free bases. So, if you have a plan to open forex account, this is so important to know that each firm also has different spreads in the foreign currency which been traded through them.
How to trade?
This is most questions that you wonder about how to deal in forex. There are two main ways that you can choose to trade in Forex, they are just simply buying and selling the currency pairs. The second way is trough the derivatives purchasing which track the movement from certain currencies. These both of techniques are also similar with equity market. The most common way is buying and selling the currency pairs. The other option is using the derivative products, such as: futures and options to get benefit from the changing value in currencies.