What is Forex?
Forex, FX, Currency trading – it’s all the same thing
Put it simply FOREX — the foreign exchange market or currency market is the market where one currency is traded for another. It is the largest financial market in the world, with its $5 TRILLION a day trade volume. Yes, we said Trillion.
Don’t be intimated by the large numbers and complex terms; Forex is actually straightforward.
If you have ever traveled in a foreign country, you probably needed to exchange your money into the currency of the country you are visiting. With this one simple action, you have already participated in the Forex markets.
Before flying back home, you stop by the currency exchange booth to exchange the money that you have left over (from the visiting country) back to the currency of your country.
Now, imagine doing this every day on a platform– buying and selling one currency for another. This is Forex trading.
If you have decided to get into Forex trading, you might want to get familiar with Forex brokers first. A Forex broker means an intermediary who buys and sells a particular asset for a commission. You may think of a broker as a salesman of financial assets. Forex brokers will provide you with a platform, where you can actually do the trading.
Some of them will also offer free training and education and a demo account to try online trading, before you invest your own money.
As an online trader, your job is to exchange one currency for another in the expectation that the price will change. That price change helps you make money.
Let us give you an example: You purchase 10,000 euros at the EUR/USD exchange rate of 1.1800. Two weeks later, you exchange your 10,000 euros back into U.S. dollar at the exchange rate of 1.2500. You earn a profit of $700. Easy, right?
Why would trade currencies and not invest your money in stock? That’s a valid question and we have the answer.
There are approximately 2,800 stocks listed on the New York Stock exchange. Another 3,100 are listed on the NASDAQ.
This could be very overwhelming, compared to the four major pairs you can trade online. Much easier to follow.
Wait, we have more reasons:
You have access to profit opportunities any time. Yes, money never sleeps.
Minimal or No Commissions
Most Forex brokers charge no commission or additional transactions fees to trade currencies online.
Combined with the tight, consistent, and fully transparent spread, Forex trading costs are lower than those of any other market.
Instant Execution of Market Orders
The so called ‘’one-click ‘’ trading that no other type of investment can offer.
How To choose a Forex Broker
Choosing which Forex broker to trade with can be a very overwhelming task especially if you don’t know what you should be looking for.
We give you three crucial things to consider before you sign up with a broker.
The first and most important characteristic that a good broker must have is a high level of security. After all, you’re not going to hand over thousands of dollars to a person who you can’t trust, right?
Do your research and find out if the broker is legitimate. That’s your first job.
As we already said, most trading activity happens through the brokers’ trading platform. This means that the trading platform of your broker must be user-friendly and stable.
A word of advice; always check what its trading platform has to offer. What are the tools it offers? Is the platform suitable for beginners as well as experienced?
Choose a broker that you could easily contact when problems arise.
The ability of brokers to deal with account or technical support issues is just as important as their performance on executing trades.
These are the three most important characteristics of a good broker. Of course, there are those who can offer you more than that – bonuses, promotions, platform features and tools that no other broker have. So make sure you look for that.
What can you find on this blog
Everything you need to know about Forex and online trading – from interactive tutorials and easy to understand lessons to best FX broker’s review – all in one place.
If you are just stepping into the world of online trading, this is a great place to start. Learn the basics of trading, get familiar with the Forex language and gradually move to advanced level, where you will have the opportunity to dive deeper into online trading.
If you want to know which broker is best to choose, come to the blog and see reviews, regularly updated.