Before beginning to make any substantial winnings in the online trading industry, every trader needs to fully be aware and comprehend the basic concepts of Forex. Armed with the knowledge and the right weapons all traders stand an equal chance in becoming masters of the Forex Market.
Here is a list of all the necessary ‘what’s’, ‘whos’ and ‘hows’ you need to know about the industry.
What is Forex?
Forex stands for ‘Foreign Exchange’, also known as FX Exchange, it refers to the simultaneous buying and selling of currencies by investors and speculators at any given time when the markets are open. For instance, British pounds (GBP) are exchanged for Euros (EUR) = GBP/EUR; or United States Dollars (USD) are exchanged to Japanese Yens (JPY) =USD/JPY.
Interestingly enough, without even knowing it, we participate in the FX markets every time we exchange one currency for another; the same as travelers do when they want to sell their own currency to buy the currency of the country they are visiting. When we exchange currencies, we are charged with some inevitable ‘exchange rates’. These rates fluctuate daily, a fact that determines whether you earn or lose money from the given exchange rate.
Currently, the Forex market is the largest, most liquid financial market in the world with an average of 5 trillion dollars exchanged every day!
Who trades Forex?
Everyone can trade forex regardless of their level of experience and location. Since forex trading has no central market place, it operates 24 hours a day from Monday to Friday and all trading is carried out via online trading platforms.
How to trade Forex?
Trading on the Forex market is one of the most lucrative investments available.
The buying and selling of currencies is implemented in pairs of currencies. For example, you buy the EUR/USD currency at its lower price and you sell it at its highest price in order to earn money.
If, for instance, you bought 1000 USD (US dollars) last year and the equivalent at the time was 800 Euros, this year the value of the USD may be 900 or 700 Euros (EUR). In this way, if you decide to sell now you will lose or earn 100€ respectively.
A trader can only trade in the FX markets via an online trading platform and these are provided by FX brokers. The platforms offered by FX brokers are various, and the broker is responsible for providing brokerage services to the trader which will enable him to trade. The trader has the opportunity to select from a variety of different types of accounts, types of platforms and all trading conditions offered. In turn, the broker is responsible for assisting the client with his trading strategy and providing the best prices in the market to facilitate his trading.
How to select a Forex Broker?
It’s no secret that what can make or break a traders success is his / hers choice of the right FX Broker.
When it comes to choosing your Broker you need to be as demanding as you possibly can in finding the one that fulfills all your requirements and needs down to a‘t’, that is the only way that the trader and the broker can build a rewarding and understanding collaboration and make each other’s work as smooth and easy as possible.
Below you will find essential criteria which you should consider when selecting the ideal broker:
- Regulation – a broker needs to be properly registered and licensed by local regulating authorities.
- Spreads – low spreads are always an attractive feature
- Leverage – a flexible leverage is preferred
- Fast Execution policy – the speed at which trades are executed is always a star attraction when choosing a broker.
- Account types – a range of trading accounts should be available to cater the needs of all traders, irrelevant of your experience and knowledge in the field.
- Demo Accounts – these constitute a substantial tool for novice traders to acquire the necessary knowledge and trading experience without the risk of losing their real money.
- Trading platforms – best to offer modern, technically advanced online trading platforms, all facilitating the art of trading
- 24 hour customer support – this is essential! You have the knowledge that you can always contact someone for support and assistance. This feature provides a feeling of security and assurance.
And this is why MTNFX is the right broker for you:
- Pure ECN/STP trading environment
- Fast execution! No desk-dealing interventions
- Full Market Depth
- Direct access to live-stream prices
- Choice of modern forex trading platforms
- Choice of forex account types
- Range of essential trading tools
- 24 hour customer support