Answers to FX Start-up Questions
Answers to some frequently asked FX trading questions from people starting out their careers in foreign exchange trading.
At first glance FX trading looks very daunting. It looks almost impossible for someone entirely new to the financial world to learn the ropes of the business. People who already have some sort of background or other in trading do not usually find it difficult to learn the workings of the FX market but, regardless of background, there are certain questions you must have answered before you successfully set off on your trading journey. We will be looking at some of the more common questions and providing simple and easy-to-understand answers to them.
What is Needed when Starting Out FX Trading?
Apart from having an account with a forex broker there is no other major requirement in trading. Most traders, during the course of their trading careers, end up using at least 3 different brokers. This goes to show how simple it is to set up a forex trading account. All that is required to sign up with most brokers is an internet-connected PC and a valid ID. The trading platforms are provided free of charge by the brokers, and quite a few of them only require a small amount of money as an initial deposit to begin trading.
What are the Costs of Placing FX Trades?
To place trades, you must pay the spread stipulated on each of the currency pairs. Besides this, there are really no other costs linked to FX trading. The spread is nothing more than the commission paid to the broker for opening the deal. There is no specific amount for this, as it is dependent on your broker and also the currency pair you are trading at the time. So, the main cost of trading is dependent on you and how much you are willing to start trading with.
People without large funds or those who intentionally want to start with smaller funds can trade smaller-sized ‘mini’ accounts. This type of account is now offered by most brokers today, as the emphasis on low minimum account requirement is increasing daily. While depositing such small amounts, however, do not forget that you will not be able to make reasonable profits from it until it grows to a few hundreds, at least.
How Easy is it to Open an Account?
As long as people from your country are accepted by the broker, the process is a straightforward one. Registration is essentially an online process where you will be asked questions regarding your bio-data, investment experience, etc. You will then be required to provide the broker with proof of residential address along with the ID proof we spoke of earlier.
Is it Possible to Test FX Trading with Practice Money?
Yes, it is possible and is even strongly advised before investing real money. The practice accounts are very important as they help the trader learn the basics of trading, test out trading strategies and also get to know the trading platform better, without risking real cash.
Are There any other Requirements to be Aware of?
After bringing your analytical level up to speed, the next thing you should do is to locate a good source of getting fundamental analysis. This is important, as the fundamentals are among the major reasons why the markets move as much as they do on highly volatile days. Keeping track of fundamentals would greatly benefit you and your trading experience.
Get a free Forex PDF PLUS:
- 14 Video Lessons
- Free One-on-One Training
- A 5000$ Training Account
- In-House Daily Analysis
- Get FULL ACCESS