Introduction
Forex trading is a legal business across the globe. Only one country such as India has restricted its citizens from trading forex. Other countries have developed some policies to guide all forex traders and ensure they pay tax too. This work will help you learn how to begin the journey into forex trading. We have added in the end to the list of the best forex brokers to begin your trading experience
What is forex trading?
Forex is an acronym for the word “foreign exchange”. It is an investment package that offers investors the opportunity to buy and sell different currencies and other financial instruments traded in the market. Forex trading allows traders to profit from both the appreciation and depreciation of various currencies by trading these different financial instruments as CFDs.
How to trade forex
The advent of online forex brokers has made it possible for investors to trade forex both from the comfort of their homes and at their offices. In fact with a broker, one can trade forex anytime and anywhere without limitations, except during the weekend when the market is closed. Therefore, to trade forex, the trader will first need to select a trusted broker for trading. We have further simplified the various steps involved in choosing a forex broker below.
Step-by-step guide on how to begin forex trading today
- Choose a forex broker: Choosing a forex broker is an important task every trader must pay great attention to. This is because choosing the wrong broker has often resulted in some traders losing their funds in the past. Investors are advised to ensure that the top brokers for Forex here they choose are registered and regulated by the major forex regulatory bodies such as: FCA, ASIC, CYSEC, SEC, FSA, etc. These bodies are known to scrutinize the activities of forex brokers and ensure they conform to the required standards.
- Create an account with the broker: The next step after identifying a reliable broker to trade with; is to create an account with the broker. Here the trader will need to fill the registration form provided on the broker’s website.
- Complete the identity verification process: Often after the initial registrations, some brokers still require more information about the trader to enhance the security of his account. Here, one may be required to provide proof of address and a valid identity card before the account could be approved.
- Fund your account: The next step to take after one’s account has been approved is to proceed to fund it. Here, brokers usually provided multiple funding options on their platforms to make it easy for the trader to fund his account and begin trading.
- Select the pair to trade: There are various financial instruments available for trading at the broker’s platform such as: Currencies, Crypto, Stocks, Indices, and Commodities. The trader is to choose from the list which of these instruments he prefers to trade and place his orders.
- Place your order: This is the final step after the trader has chosen the pair he wishes to trade. Here, he is to decide whether to buy or sell the chosen pair based on his market analysis.
Basic requirements to trade forex
There are three basic requirements for forex trading that the trader needs to have before he can begin trading. They are:
- Smartphone
- Internet access
- Trading Capital
Is forex trading a good investment?
Forex trading could be a profitable investment only when the trader makes the correct predictions. However, this does not undermine the risk involved in trading especially when the trader makes a wrong prediction.
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