What is forex trading
Here is a quick guide to forex and currency trading. Find out how you can begin trading currencies over the internet via a web-based broker, and how to create profit (make money) on your trades.
It is easy to start with foreign exchange trading. You will need:
- currency (for example the US dollar).
- a trade account with an online broker.
- basic understanding on how to trade currencies.
How much money you need to engage in currency speculation?
We assume that you have some money already. You do not have to be rich to start with currency speculation. If you start with about US$100, you can open a full-fledged currency account with even the best currency brokers online. Some brokers will let you begin with even smaller amounts. It is obviously easier to earn a lot if you invest larger amounts.
How can I learn how to make money forex trading?
It takes time to become a good Forex trader, but there are also alternative solutions. Via social investment network s such as eToro you will have the ability to see and copying other traders, which requires no special skills. Even the best traders can be wrong, so there is of course no guarantee that you will make money by copying the experts, but it does at least a little easier to get started with forex trading.
All online brokers listed on this site has resources and guides that show you how to create profits in the currency market. We recommend that you read some of these guides. It may still be useful to get some experience with trade as early as possible. Practical experience makes it easier to understand the theoretical.
Finding your currency broker
Which online broker should I choose for currency trading?
We have examined several dozen online brokers that offer trading currencies online. Of these, this is the best one:
- easyMarkets is a leading provider of forex trading (trading in currency and commodity derivatives). As the name indicates, this service is designed to make forex easier. Of course it is not automatic to profit even if the service is easy to use, but most traders still appreciate services that are simple and practical in use and easyMarkets is unrivaled of this. A good online broker for beginners as well as for those with experience.
Best social trading website:
- eToro is a social investment network where you can see and copying other traders in the market. They have 2.5 million users and is the largest player in the online social trading. Worth a try.
Other good online brokers worth mentioning:
- AVATrade is a recognized forex broker offering CFD trading. Has fixed low spreads meaning reasonable trade regardless trading volume.
You've already tried forex trading
Most of us have already tried currency trading. You have probably already experienced having to exchange currencies.
You might discover that if you withdraw 100 USD, it will cost you 131 euros, depending on the current currency rate.
This guide is about how to make money on currency speculation, and part of this process is assessing the risk involved. It's fun there, just wait to see! The goal is not in itself to switch from one currency to another, but to make money on changes in exchange rates.
The exchange market is the world's largest financial market. Even the largest stock markets in the world are small in comparison. If the stock market is the moon, the sun would be the currency market.
The daily values traded in the forex market is about 20 trillion dollars every day (in just the foreign exchange market). All stock markets in the world combined is less than the foreign exchange market.
The easiest way to learn forex trading
One can read many books on currency trading, without being able to gain profit in the currency market. But it is also possible to make money in the currency market even without reading any financial non-fiction text.
Some very good traders started out simply by "playing" in the currency market. They used fictitious play money at first, and thus they will have saved their real money for the day they were ready to do the real thing.
A good way to get an idea of what forex trading is all about, is simply to create a demo account with an online broker offering forex.
Even if you know little or nothing about currency trading, it is to try out a free and risk free demo account is a great way to start. Why? Well, because you're going to ask yourself the question: Which currency should I buy now to make the most money? Which currency should I sell now to gain profit or lose less money?
A demo account is a risk-free tool to play around on the currency market. Think about it, both humans and animal plays and invent games when they are children. This was the strategy intended by nature, and the best way to learn anything at all is through play, even for adults. So start playing using play money in the forex market, right now (see how to do it below!)
Try forex for free right now
Not many online brokers offer a free and full featured demo account. At easyMarkets however, you can practice as much as you want. Moreover, you will get free trading money when testing their trading platform. Any profit you create with this money you get to keep for yourself!