Forex Demo Accounts

Forex demo accounts – are they any good?

Forex trading (also known as foreign exchange or simply FX) is the world’s largest financial market with a daily turnover of approximately 4 trillion USD. It has a lot of unique features which make it significantly different from some other forms of trading such as stock market or the binary options trade. Because of that, however, the need for some form of practice increases, especially if you are new to this business. You need a place where you can familiarize yourself with the market and all it has to offer, but without risking your own money. Luckily, demo accounts are designed with specifically that purpose in mind and we are here to show you how exactly they can help you make some serious money.

Forex demo accounts | How to use them?

As we have already said, demo accounts serve to get you acquainted with the way forex trading works, various trading platforms which are used in this business and all other aspects this particular type of trading entails. This makes them a perfect learning tool which should always be combined with the education materials your broker offers. Good brokers will go to great length in creating their education centers which provide you with the knowledge needed to become a good trader and demo accounts are a key factor in all of this because they let you put all that knowledge into practice and see how the whole thing works. Later on, when you become a bit more experienced, you can test out different strategies and see how exactly some of the more advanced aspects of this type of trading work. To put it simply, demo accounts are a great tool for both rookies and more experienced traders because every single trader needs to constantly learn new things and test new trading approaches in order to keep up with the market. The more effort you invest and more knowledgeable you become, the bigger the profit will be.

Forex demo accounts | How does it work?

So how exactly do demo accounts prevent you from losing money? Well, since the market is absolutely huge, there are also a lot of brokers and they fight for every single client out there. One of the ways to attract the clients is to offer them a look at the options available with various brokers and this is done through demo accounts. They are almost always free, so you can browse as much as you like. They also provide you with a certain amount of virtual money which is an excellent opportunity for you to conduct some trades, see how the platform reacts and whether or not everything suits you. All the trades available with your demo accounts always try to replicate the real ones as closely as possible to make sure you have the best possible experience and many of them offer some real assets, as well.
When you take all of that into consideration and combine it with the fact that you can use them for educational purposes, it turns out that these accounts really are worth a lot. Think about all the money you would lose if you were a complete beginner trying just to grasp the concept of these trades. Imagine how much time it would take and how much it would cost you if you went in blindly and tried to figure everything out without a demo account. Plus, since the demo accounts are often designed to go hand in hand with the education centers, they actually increase your chances for profit because you have a much better idea what to expect. You go through the education materials, test your knowledge, build up your confidence and then start trading. The chances are you will be much happier with the outcome.

Forex demo accounts | Safety

Demo accounts can also give you an insight into your broker’s way of doing things. This is a great way to protect yourself from scams because the very fact that a demo account is offered is a sign of a reliable broker. Not a definite proof, mind you, but a good sign, nevertheless. Those brokers which do not offer a demo account usually do not have a very good service or they simply do not want you to test them before it’s too late because they are scams. With your demo account you can also check the support available and see how long it takes the support team to answer your questions and solve your problems. Again, this may indicate how reliable your broker really is and once again you don’t have to risk any of your money. Free exploration of a broker’s website is the best possible advantage you can have in your efforts to avoid scams, so use the demo accounts to explore as much as you can.

Forex demo accounts | Conclusion
Forex demo accounts are a great tool for both new traders and the more experienced ones to learn more about the market and the trading itself. They go great with detailed educational centers and allow you to test your newfound knowledge without any danger to the money you have in your account. This is also a great way to test some new strategies you may be developing or to simply see how well you would fare with a different approach. Because of the knowledge you gain by using this type of account, you can expect your profits to be higher in the long run. You will not waste any valuable time and even more valuable money to figure everything out, but will come very well prepared with a very good idea what to expect once you start trading for real.
But the most important thing you need to have is patience. The more time you invest into preparing yourself for the real trading, the more success you will have. Forex is not a kind of trading where success comes overnight. The prices are pretty stable, risks are relatively low and you should be prepared for a long run. Forex demo accounts can help these runs become very lucrative.

Why Trade Forex?

Forex (or foreign exchange) market is a huge international market dedicated to trading currencies. It includes millions of people, hundreds of thousands of trades every day and with an average daily turnover amounting to 4 trillion USD it is also the most traded financial market in the world. When you have such a huge market, you will naturally have a lot of opportunities offered to you if you decide to conduct some trades yourself. Forex has some very noticeable advantages when compared to other types of trading and this will be the topic of our article. If you want to know why exactly trading forex is a pretty good idea, just keep on reading.

Why Trade Forex? | Market’s Size

As we have already said, forex is the largest financial market in the world. This fact entails some advantages you as a trader have from the very beginning of your trading career. For instance, since this kind of trade is global, that means you always a market open somewhere in the world. You can count on an active market 24 hours a day, five days a week because there are no set exchange hours. From London to Tokyo, from New York to New Delhi, somebody is always trading and this brings us to another advantage connected to the market’s size – liquidity.
Now, because so many people are trading constantly and the daily average amount traded goes up to 4 trillion dollars, the liquidity is extremely high. In other words, you will never have to wait a lot for someone to take you up on your offer and you can always count on any kind of business to be concluded quickly and efficiently. Another advantage of a very liquid market means that the prices of the most dominant assets are very stable. Nobody can manipulate them precisely because there are so many people who don’t want any surprises and keep the prices real and fair.
The size of the market also enables you to invest easily in a foreign country, without any problems regarding foreign security laws or unclear financial statements written in some foreign language. Everything is laid out, there are no uncertainties and the whole deal goes down very quickly. This is a great way to gain exposure in other countries or to simply find some good investment opportunities abroad.

Why Trade Forex? | Low Costs

This really depends on the broker, but the more serious ones will never demand from you some large commissions or initial deposits because their competition would walk all over them. You usually need to pay only the spread which can, in some cases, be lower than 0,01%. As for the minimum initial investments, they can be as low as $25. Demo accounts are usually free, as well, so you can practice your forex trading as much as you like. In a way, all of these benefits can again be linked to size of the forex market because it is the size of competition which keeps the prices in check. Every serious broker needs to invest a lot of effort just to survive on the market which results in some great deals for traders such as yourself. The trading is very accessible to anyone interested and the brokers are always happy to take in a new client.

Why Trade Forex? | Making Profit

Many of the enumerated features are what attracts traders from around the world to this type of trading because they promise profit on almost regular basis. Because the prices are pretty stable, people can plan a lot of things ahead. Predictions become much more accurate than, for example, those made on a stock market and the whole business is much less stressful because of it. True, the possibilities for unexpected huge earnings are also much rarer, but in the long run, this means much more profit because fewer shocks can come your way. Types of trading that offer this kind of security are extremely hard to find and all experienced traders appreciate it immensely. All of this means that patience is a necessary virtue in this business. You simply cannot hope for a quick buck just because you had a bit of dumb luck. However, with this type of trading, you can be sure your patience will eventually pay off handsomely.
One of the key factors in making all of that possible is the leverage system implemented in this type of trading. Because of it, traders can control an exponentially larger amount of currencies, depending on how big the leverage offered by their broker is. This increases profits significantly and provides more options to the traders when they want to invest on the market.

Why Trade Forex? | Conclusion

Forex trading is certainly a very popular type of trading which is conducted all over the world at almost any imaginable time, five days a week. It is the largest financial market in the world and its size allows it to offer some very unique possibilities to the traders. The prices are very firm, unpleasant surprises are very rare, liquidity is exceptional and bigger investors can easily make their presence known in foreign countries with no administrative problems at all. This kind of trading is very accessible to all traders because brokers usually do not demand any fees or high commissions and the minimum deposits are very reasonable, as well. The only thing you will need, however, is patience. Since the prices are stable, it may take some time for the profits to start rolling in, but it is definitely worth the wait as this can eventually become a reliable source of income for you. With the markets being open 24 hours a day, you can take your time and conduct trades whenever you want. Whether you are still a rookie or a professional trader, forex is certainly a great choice for a safe investment.

Forex Glossary

The following is a list of the most common and most important terms associated with forex trading, the so-called forex glossary.

API – Application Programming Interface; a piece of software which can be instructed by the trader to conduct trades automatically while the person is unable to access the market

Base currency – the first currency in a currency pair; example: USD/GBP is a currency pair and the base currency here is the USD

Brokers – agents who usually connect buyers and sellers on the market in exchange for some sort of comission charged to one or both parties

Candlestick chart – a type of chart which depicts trading price ranges on daily basis; the method was developed in Japan and uses lines to show the price ranges for the day

Commission – a broker’s payment for successfully completing a transaction or for some investment advice given to their client

Dealer – a person or a company which conducts trades with assets they own themselves

Foreign exchange – also known as forex or FX; the process of trading one currency against another

Gold standard – fixing the amount of gold needed to convert a currency into it and vice versa

Hard currency – an extremely stable and reliable currency (such as USD or EUR) which is very attractive to the investors because of its properties

Head and shoulders – three consecutive peaks of a price with the middle one being higher than the other two; this occurrence is often seen as the beginning of a reverse trend

Leverage – ratio by which your initial investment is increased in the foreign exchange market to increase total value of the trades; if you, for example, invest $5000 with a 100:1 leverage, this will allow you to maintain an open position of up to $500,000

Long – purchasing an asset hoping that it will rise in value

Margin – the minimum investment required to keep an open position; if you, for example, want to maintain an open position of $500,000 with a leverage of 100, your margin will be $5000

Pip – the lowest possible change of an exchange rate; usually expressed in 1/100 of a cent (0.0001) since currency pairs have four decimal places

Position – a still active trade; positions can be considered open or closed and long or short

Quote currency – the second currency in a currency pair; example: USD/GBP is a currency pair and the quote currency here is GBP

Regulated market – a type of market overseen by the government in order to protect investors trading there

Short – selling a borrowed asset (usually from a broker) in hope that its price will fall and the dealer will then be able to buy it back and thus make a profit before the asset is returned

Trading platform – a piece of software used to trade forex which allows access to trading via internet

Volatility – a measure showing how much a given price will fluctuate over a certain amount of time; if the volatility is high you can expect big changes in an asset’s price and if it’s low the price is not expected to fluctuate much

How to Choose a Forex Broker?

When you decide to start trading forex, the very first move you will have to make is to find a broker. In this business, brokers act as intermediaries between traders and the market and represent your financial interests. Because forex market is the largest financial market in the world, the number of possibilities traders have when choosing their broker is exceptionally high. There are some very different offers, so you need to know exactly what you need and how to get it. That’s where we come in – this article will help you understand fundamental differences between various brokers and show you how to pick the right one. If you want to be sure you get this right, keep on reading.

How To Choose A Forex Broker? | Safety

As we have already said, forex market is the largest financial market in the world. Unfortunately, this also means that there are some people who claim to be legitimate brokers, but are in fact scammers who are just looking for unsuspecting victims. In order to avoid any unpleasant surprises, the first thing you have to do is research your broker and see how legitimate they really are. Checking the lists of regulatory institutions such as the FSA in the United Kingdom or the NFA in the United States is always a good idea because these agencies are pretty strict and if your broker checks out there, you can be sure they are a reliable company.
Demo accounts are another good way of checking your broker. First of all, if a broker doesn’t have it available you can’t count on a good customer support at the very least. Demo accounts provide you with an opportunity to see how the broker operates, to test all features available and test your trading skills with virtual money, so if a broker doesn’t have one you are denied some very important information. Good brokers will always want to show you what they have to offer and will try to be as open with you as possible. There is a lot of competition in this line of work, so every single trader matters.
It is also a good idea to check other traders’ comments online for some additional information on the quality of service a certain broker provides. This type of feedback is very common and easy to find, but you have to take it with a grain of salt because success or failure in trading may often influence people’s reviews.

How To Choose A Forex Broker? | Features

Some features of the brokers’ offer such as leverage, minimum deposit, payment methods, education materials etc may differ quite significantly. For example, some brokers demand a minimum deposit of $1000 or more, while others won’t ask you for more than a single dollar. But don’t make your decision based this amount alone because a cheap broker is not necessarily a good one. Sometimes it pays off to invest a bit of extra cash at the start to, for example, learn more from a better education center which will then lead you to some bigger profits later on.
The amount of leverage you get from a broker also varies, so this is also something to consider, and the payment methods are pretty important, as well. This is especially the case if you plan on using credit cards to perform your transactions because the number of credit cards can vary greatly from broker to broker. Education materials offered are also something that may interest you, especially if you’re a new and inexperienced broker. They go hand in hand with a demo account because this kind of account allows you to test your new knowledge or to see how your new trading strategies would fare in the real market.
In the end, everything is up to you, but the most important thing is that you have all the necessary information. This will help a lot in preventing any kind of scams and increase your chances of making a potentially very lucrative choice. The possibilities really are numerous, so you should definitely be able to find something that suits your every need.

How To Choose A Forex Broker? | Example

There are many websites out there dedicated to comparing various brokers and providing many useful information about them, but here’s an example of the choice you have, just to give you the general idea what to expect. Markets.com and FXCM both give you the same leverage, but the former demands a $100 deposit, while the latter only wants $50. However, with markets.com you have the option of getting a $2000 bonus once you meet certain trade volume while FXCM accepts US clients which is not the case with its counterpart. So if you know you’ll be doing this for a longer period of time, you might choose markets.com because of the bonus, whereas if you just want to check things out and see how it goes FXCM might be the better choice because of the lower minimum deposit.
This is just a small fraction of offers available to you on the market, so doing your research really becomes important here. But aside from that, it is also important that you also know what you want so that your search for the right broker can be as efficient as possible.

How To Choose A Forex Broker? | Conclusion

Good preparation is the key to success in any kind of trading business. Finding a good broker may have a huge impact on your trading career which makes the process of collecting information about every single candidate extremely important. Safety of transactions is the most important aspect you should check before opening an account while other features may depend on your ambitions and style of trading. In any case, there are more than enough companies to choose from, so you can be sure you will find the one that can meet all your demands – you just have to look for it. Once you find the right broker, however, trading becomes a great pleasure and a great opportunity for clever investments and if you continue with the same detailed and responsible approach, the profits will come very soon.

Is Forex Trading Gambling?

When it comes to any kind trading, a lot of people who know nothing about it think everything comes down to dumb luck or that the whole thing is somehow rigged to prevent you from earning any money. They have no idea how much preparation and research goes into every successful investment, what instruments are available to you to diminish the risks involved, nor do they know anything about education centers and demo accounts. Forex trading has very little in common with any form of gambling, it is the biggest financial market in the world and a serious business, so these kinds of comparisons can’t seem to be very well thought out to somebody who knows a thing or two about the way trades are conducted.

Is Forex Trading Gambling? | Comparison

The most important difference between forex trading and gambling is the element of randomness. If you go to a casino and want to play a game of roulette, you have no idea where the ball will land. There are no indications of a trend forming and every imaginable outcome has the same chance of happening. The chances for the ball to land on zero or on, for example, 37 black are exactly the same, from the mathematical point of view, and once the ball starts moving you are powerless to do anything. The same example can be made if we take a look at slot machines – there is absolutely nothing you can do there to increase your chances there; you can only hope to be at the right time in front of the right machine. All of this is not the case with forex trading.
When you’re trading forex, you have ways of making an educated guess about the way a certain price will behave. You can research all the economic factors that are expected to influence it and then make a very educated decision about your investment. There are always indicators that can show you what will happen next to the prices, you are not relying just on pure luck, but the knowledge you have about a particular asset also has a part to play. You also have the option of choosing between different levels of risk associated with your investment, because there are always some assets which are extremely likely to bring profit.

Is Forex Trading Gambling? | The Market

Another very important aspect of forex trading is the market’s behavior. Trading foreign exchange is the most stable type of trading available because the prices do not fluctuate as much. Unexpected price changes are much rarer than in, let’s say, stock markets and people can plan ahead much more reliably. This is because the daily turnover for global forex market amounts to 4 trillion dollars and this high liquidity is what keeps the prices stable. There are millions of people conducting millions of trades every day and the chances are you will be able to find somebody to trade with extremely quickly.
Even if something unexpected happens, which is rarely the case, the prices of the so called hard currencies will always remain stable. These currencies serve as a way to store your value because they will be equally worth or even more valuable later down the road. Such currencies include USD, EUR, GBP, JPY and more, but the thing that made them achieve this status is the political and fiscal stability of their respective countries. As you can see, there are always ways to achieve profit. You are completely in charge of managing your risk levels and there are always offers available which can help you preserve the value you have.

Is Forex Trading Gambling? | Education

You can also learn new strategies to increase your chances of becoming more profitable. Good brokers will always have some sort of education center and will go to great lengths to help both new traders and the more experienced ones. These education centers will often include videos, eBooks and even webinars for you to go through and maybe get some new ideas.
Demo accounts are icing on the cake of every broker’s education offer. With them you can test what you’ve learned and explore every nook and cranny of your broker’s website. You will also be able to experience trading in a controlled environment with some virtual money and absolutely no danger to your funds. They are also a good tool to verify how reliable your broker really is and to see whether or not a possibility for any kind of scam exists. Just the fact that this kind of account is available can tell you a lot about a broker because it is a sign of a well organized and dedicated company.
Compare this to casinos and other forms of gambling where you will rarely get an opportunity to practice without risking your money and you most certainly cannot count on any courses designed to increase your winnings. It is in your broker’s best interest that you become successful, but it is in the casino’s best interest that you lose your money.

Is Forex Trading Gambling? | Conclusion

Is forex trading gambling? Not even close. With forex trading you are able to predict the outcome of your investment with a reasonably high success rate because of your knowledge which can be increased significantly if you get your hands on some good educational materials. Gambling, on the other hand, always comes down to pure luck and there is very little you can do to increase your chances of winning. Forex assets have their trends, ways to predict the prices and a huge community dedicated to creating new ways to make money.
Because of its size, forex is an extremely liquid and stable market, so you can completely rely on some of its assets to bring you profit. Sudden shocks and big price changes are pretty rare and you even have currencies which can be used as a haven should a shock ever happen. With a bit of time and effort invested in educating yourself and researching all the right tools and methods needed for trading, this becomes a job like any other; sometimes even a very lucrative one.

How Much Do You Need To Start Trading Forex?

Forex market is well known as the largest and most liquid financial market in the world. It is also very stable, which means the prices don’t behave as unpredictably as in some other cases (stock markets, for example). This means that all predictions dealers make have a much greater chance for success which, in turn, will bring some profit to the investor. Liquidity and reliability are one of the most important features of this type of trading and they are the reason why millions of people around the world are eager to participate in the process.  But how do you start trading forex in the first place? And how much money do you need, exactly? Keep on reading to find out.

How much do you need? | Brokers

Foreign exchange market does provide you with some excellent opportunities for profit, but first you will need to find a broker. Brokers are your way of staying connected to the market – they execute your investment orders, sell your assets when the time is right and can even provide you with some helpful tips. But because of the size of this market, brokers are extremely numerous and you have to be careful when selecting the one which will represent you. Testing them out is absolutely crucial, because scams have been known to happen as some individuals took advantage of their unsuspecting clients. The good news is that you have ways of confirming how legit a broker is; checking the lists made by various regulatory agencies, using a demo account or recommendations made by some other traders on the internet are all reliable ways to acquire important information. In any case, be sure to check your broker thoroughly.
There are many factors which can influence your decision when choosing a broker: minimum deposit required, leverage offered, payment methods etc. Since we are talking about how much money is needed to start trading forex, minimum deposit amount is what interests us the most. This number is not fixed; some brokers may ask you to deposit a single dollar, some may ask for $100 or more and some may even offer you some free money to start trading with them, but the point is you have plenty of options. If you’re a new trader, starting out with a smaller amount seems like a good idea, while the more experienced traders may feel confident to invest several thousand dollars right at the beginning. The bottom line, however, is that you don’t need to invest a lot of money to begin your forex trading career. There are plenty of brokers out there which will be more than happy to have you on their team with almost no initial investment.

How much do you need? | Other features

Good brokers will always have some additional features to offer once you open an account with them. These may include demo accounts, education centers, trading signals and many more which are more often than not completely free. Again, this may vary from broker to broker, but the best ones, those which are really dedicated to you making a profit, will do their best to provide you with as much as free content as possible. So for a really low initial investment, you can get a lot of useful tools, just be careful which broker you choose. Also be sure to check withdrawal methods because they sometimes have some kind of fee associated with them. It usually isn’t very high, but having this information can’t hurt you.
All in all, forex trading offers some great starting possibilities because you can really get a lot out of your initial investment from some of the brokers.

How much do you need? | Time

Apart from money, another thing you will have to invest in forex is your time. If you’re a new trader, it is generally a good idea to educate yourself as much as you can before you start investing. Brokers often offer some pretty good education materials, so this may also be one of the factors to consider when choosing a new broker. Even more experienced traders can sometimes find good advice among these materials.
Another fact plays a more significant role here, however. Forex market is pretty stable compared to other financial market and even has the so called hard currencies which serve as a value-haven if something unexpected happens. This means it may take some time for you to start earning profit since the prices sometimes may not change much for a certain period of time. On the other hand, this also means that you know what to expect in the long run and you can count on your profits to start coming in after a while. It is extremely rare to make a fortune overnight in this business because extreme price fluctuations happen very rarely, but a lot of experienced traders know to appreciate this. Just be patient and the money will come.

How much do you need? | Conclusion

Starting your forex trading career generally does not require a lot of money. There are many brokers on the market which ask for some pretty low minimum deposits. Research them thoroughly, make sure they are not some sort of scam and then choose one which suits you best. You should not make this choice based on the minimum deposit amount alone, though, because the offer behind them can be pretty diverse as well. Think about the kind of trading you want and the methods you need because the chances are there is a broker perfect for you somewhere on the market.
One other thing that is certain you will need is time. Depending on the leverage your broker offers you, it may take some time before more substantial profits start coming your way. However, because of the market’s stability it is much easier to plan your moves ahead and rely on positive outcomes. Patience is vital in this business and you can be sure it will eventually pay off.
In the end, we can safely conclude that forex trading is, from a financial perspective, pretty much accessible to everybody. This is the reason for its immense popularity and the market’s size. Just be patient, educate yourself as much as you can and success will surely follow.

All You Need To Know Before You Start Trading Forex

Forex market is by far the largest financial market in the world with daily turnovers amounting to 4 trillion dollars. The market is open 24 hours a day, five days a week and millions of people all over the world participate in currency exchange on regular basis. With this kind of activity, there are some very interesting opportunities for traders to make money. If you are new to this type of business, but would love to try it out, this article will introduce you to the fundamental principles of foreign exchange and explain what to expect once you start trading.

Trading Forex – All you need to know | Getting started

The first decision you will have to make before you start trading is to choose your broker. Brokers are companies which serve as intermediaries between you and the market, but may even provide you with some helpful advice. There are many elements their offer can have and a lot of them differ when it comes to this. Minimum deposits, leverage rates, payment method and additional features will often be different with different brokers, so you have to check everything out thoroughly to see what fits your needs.
Good brokers often offer ways for new traders to educate themselves through various eBooks, videos and sometimes even webinars. These materials offer more than enough information for any new broker and once you go through that, you can test your knowledge with a demo account which simulates real trading conditions, but with no risk to your own money. Good preparation is extremely important before you start trading for real because it increases you chances for success exponentially.

Trading Forex – All you need to know | Advantages

Because of its immense size, forex market offers some unique possibilities to the traders. First of all, its liquidity is extremely high which means you can count on quickly finding a person to take you up on your proposed trade. People all over the world are trading 24 hours a day and any one of them is your potential partner. This also leads to some very stable prices compared to other markets because the sheer number of traders doesn’t allow speculation or manipulation of any kind. This stability is much appreciated among more experienced traders because it allows for long term planning and much more flexibility with your trading strategies.
Many brokers on the market means that there is a fierce competition among them and each of them will try to get you to open an account with them. This is great for all traders because all costs (deposits, commissions etc) are lowered to their absolute minimum. Beginning your trading career is actually quite cheap, so you can get a lot of value for your money when you’re choosing a broker. Always check what additional features are offered by the brokers and at what price and then compare multiple companies to determine which one is the best for you.

Trading Forex – All you need to know | Important terms

Obviously, if you are completely new to this, some terms and expressions will probably be unknown to you. Leverage is a good example of that because you need it to make some serious money on the market, but if you have never encountered this kind of trading, then you probably have no idea what it means. In short, leverage is a ratio applied to your investment (margin) in order to enable you trading with standard lots. You also have pips, which are fractions of a cent used to show changes in the exchange rates of a given currency pair. Because the pips are too small to offer any real profit, traders use standard lots and leverages to increase the amount of their profit. Then there are shorts and longs which are different types of investments available to the traders and the list just keeps going on and on.
You can check the glossary on our website for more of these terms, but don’t let them discourage you from trading in any way. It’s all part of the learning process needed to become a good trader and once you start researching them, you’ll realize things are indeed very logical and that you can wrap your head around them reasonably quickly.

Trading Forex – All you need to know | Attitude

Be aware that for success in forex trading patience is needed. Since the prices are stable and the volatility of the market is low, there are not too many sudden bursts of asset value which can lead to a quick profit. However, reliability of these prices enables long term planning and some of the prices are so firm that they are sometimes referred to as “value-havens”. There are even some studies that show how those investors who choose lower leverages and are more patient end up with much more money over longer periods of time. Be patient and play it safe and you will eventually end up with a hefty profit.

Trading Forex – All you need to know | Conclusion

In order to be successful, all new traders have to invest at least some time and effort at the beginning of their careers to educate themselves about this particular type of trading. This gives them much better chances to succeed in acquiring profit because they know what to expect and how to deal with it. Once you do that, you will know exactly which style of trading suits you and what kind of broker you want. Don’t let this initial learning effort scare you, because forex market offers plenty of advantages to those who know how to look for them. This market is very firm and stable, the prices don’t change as much as they do in some other forms of trading and you need to know how to take advantage of it. Knowledge, patience and perseverance are the qualities needed for this job and if you have them, all of your efforts will pay off eventually.

Forex Market Advantages

The foreign exchange (forex) market is a worldwide market focused on trading currencies. Hundreds of thousands of trades are conducted on daily basis and this kind of size of a market means that there must be some good opportunities for investors to make money. Indeed, forex market offers some unique advantages to people who decide to invest in these kinds of transactions and this article will try to bring these advantages closer to you, so you can be well prepared if you decide to jump in. If you can utilize the edge this market offers you, the profits can be very big in a very short period of time. We will try to show how most of these features work and how to best use them for your profit.

Forex Market Advantages | Liquidity

Liquidity is probably the most notable advantage of forex market. Because of its size, the money is constantly fluctuating and you are always able to find somebody on the other side to accept your trade. The situations in which you have to wait and hope for a trader to seal the deal with you are extremely rare precisely because so many people are involved in the business. You can always find somebody to trade with, no matter which currency you choose.
Another thing worth mentioning here is that the seven main currency pairs are extremely stable. This again is because of the size of the market which helps maintain the stability of prices. You know exactly what to expect from them because they have narrow spreads and little slippage, so there are no unpleasant surprises.

Forex Market Advantages | Global market

As we have already said, the forex trade is worldwide. This means that there are always people conducting trades which are willing to accept you as their newest partner. From Australia to Canada, from USA to Japan, the market is always open somewhere in the world. Part-time or smaller traders can make good use of this fact as they can choose when to trade. It doesn’t matter if they do it in the middle of the night or in broad daylight. This gives them a lot of flexibility and time to study the market and make the correct decisions which leads to some pretty nice profits. It is also a great way to make some extra money if you have another job during the day – you simply finish your work there, come home and start trading. You are in complete control here; trade whenever you feel like it, there are no restrictions.

Forex Market Advantages | Low cost

You generally don’t need a lot of money to start trading with forex. Minimum account deposits with the brokers are often very low, with some of them asking for as little as $25. Apart from that, commissions are practically non-existent which means no fees of any kind and the traders keep every last cent of their profits. You will, however, need to pay the so called bid/ask spread to your broker as a form of transaction costs, but this is also very low. If the conditions on the market are normal, the spread is only 0.1% and it may get even lower if you are dealing with a big broker.
It should also be mentioned that the demo accounts are usually completely free. These are a great way to test some of your theories or just to familiarize yourself with the way forex trading works because they give you some virtual money for trading. You therefore have no risk of suffering any losses with these accounts.

Forex Market Advantages | Leverage and profits

One of the most characteristic features of the forex market is the leverage system. Depending on the size of the leverage offered to the traders, they can control an exponentially larger total value of currencies. This can also increase the potential profits made by the trader by a significant amount. One should not get greedy with this system, because a lot of studies have shown that those traders who take smaller leverages and exercise greater care eventually end up with more profit. Patience is a key factor in this business, so don’t rush anything and you could be on your way to some very large profits.
As for the market, you can be sure that nobody can control the market prices, so your investments will be completely safe from any kind of manipulation. This is again because of the market’s size and sheer numbers involved with the trading. The force of objective demand keeps the prices real and with hundreds of thousands of traders doing trades every single day, the pressure would simply be too much on anyone who would try to control the prices.

Forex Market Advantages | Conclusion

As you can see, the forex market offers a lot of possibilities for a trader. These are only a few of the most important ones everybody needs to be aware of if they want to function successfully in the trading arena. From the sheer size of the market which automatically guarantees some very interesting aspects of the foreign exchange, down to the very core of the system of trading implemented in this business, the forex market offers opportunities for everyone. This is especially true because of its low prices and minimum deposits demanded by the broker which really make this line of work accessible to every trader willing to invest just a small part of their time and money. Not only that, but the flexibility which a trader can have in their everyday life with this work is unmatched – you get to decide when you want to trade, the market really doesn’t care. So if you want to get started with forex trading, do your research, visit our other articles on this website and get going. This really is a good opportunity.

What To Look At When Selecting A Forex Broker?

If you are new to the business of forex trading, one of the first things you will want to do is find a suitable broker to help you with your trades and to get you started as soon as possible. Since we are talking about the largest market in the world, it is to be expected that a lot of options will present themselves to you. The fact that so many people are dealing with forex trading means that many brokers out there are fighting for each client and the logical question that comes to mind is – how to pick the right one?

Selecting A Forex Broker | Questions

Before you compare them, you will want to acquire as much information as possible about your potential brokers. One of the most important things here is whether or not a broker is registered with any regulating organizations, such as the FSA in the United Kingdom or the CFTC in the United States. If they are, this will give brokers a lot of credibility, while in the other case you may want to cross out that broker from your list of candidates. Don’t forget, scams are possible and you need to protect yourself as much as you can – for more advice click here. Information on how much leverage a broker is prepared to give you can also be very useful, as well as the knowledge about their premium services. You also may want to know how wide are the spreads offered and are they fixed or non-fixed. In short, you need to research every broker thoroughly and only then will you be able to make the right decision.

Selecting A Forex Broker | Other Steps

Now that you have all the information you can simply compare the broker and see which one satisfies your needs and best suits your trading style. Check their account types, deposit and withdrawal options, trading platforms, customer services etc. Pick at least two that satisfy you criteria and then open a demo account with them, so that you can see how they really work. Demo accounts are usually offered by brokers and the let you test everything you want to see in action, but with no threat to your money.  Use these accounts to gain first-hand knowledge about how your chosen brokers operate and then compare them again. By this point you should be informed enough to make the right call and you can start thinking about making your first deposits.

Selecting A Forex Broker | Conclusion

Choosing a broker is something that should not be done in a hurry. You need to research everything right down to the smallest detail and do not be afraid to ask questions. Use every possible resource to gain information, feel free to contact customer supports and test brokers through their demo accounts. Your broker must fit your style and needs perfectly, only then you can get the most out of your investments.

Understanding Forex Leverage

Foreign exchange is the world’s largest financial market which deals with currencies on a global scale. Since we are talking here about trading which is a constant and present just about everywhere, it is no surprise that it elicited development of a huge industry aiming to make profit out of these trades. Naturally, this industry has a lot of tools for the job and one of the most common and significant ones is the concept of leverage, something that can help you increase your profits exponentially.

Understanding Forex Leverage | About

Forex leverage is basically just a loan you, as an investor, take from your broker in order to start trading with currencies. To do that, an investor must first open an account with their broker – find out more about brokers here  – and make a deposit, depending on how big a margin the broker needs. The margin is closely related to the total value of the trade, so if, for example, a broker asks for a 1% margin deposit and you deposit $1000, you will be able to make trades which are worth up to $100.000. This is where the leverage comes in because the trader can apply it up to a certain amount to his/her investment in order to substantially increase profit margins. This is needed because the currency prices usually change in pips (fractions of a cent) during the day and no real money can be made without the leverage.

Understanding Forex Leverage | Example

Suppose that we have applied a 50:1 leverage to our capital of $1000 and we have a ratio of currencies we want to invest in. We know how much a pip is worth for a predetermined standard lot (let’s say that a standard lot is $10000 and we have invested in five of them, because of the leverage;  50x$1000) and then we see by how many pips the ratio has changed. If we have guessed correctly the direction in which the ratio will go, we will earn the price of a single pip multiplied with the number of pips that have fluctuated and the number standard lots we used in this trade.

Understanding Forex Leverage | Use

Studies have shown that the more conservative and careful traders tend to be much more successful when it comes to forex trading. They usually take much smaller leverages which have a higher probability to yield some smaller profit and then continue building their fortune step by step. A smart implementation of stop and limit orders also plays a significant role here, as it helps prevent potential losses.

Understanding Forex Leverage | Conclusion

Leverage is almost a necessity when we’re talking about forex trading. It enables traders to make some decent profits with relatively small amounts of money invested. However, leverages should be used carefully because fortune in this kind of trading does not come overnight. As with many other things in life, patience and moderation are vital to a trader’s success.