Online Forex trade accounts for a massive proportion of all currency trading. That’s pretty remarkable considering that fifteen years ago online trading was still the stuff of science fiction. Not only has the online Forex trade transformed how we approach Forex, it has also had a transformative effect on the market itself with the number of people trading Forex doubling in the last ten years.
It’s never been simpler to open an account and start trading, so let’s take step by step look at how it’s done.
The first step to becoming an online trader is to open an account with a Forex broker. Take your time when considering brokers; you need a broker that is trustworthy, technically competent, well connected and customer oriented. Some new brokers lack the knowledge and experience to handle their customers well, others may be simple scams.
Once you’ve made your initial deposit your account will be opened. Most brokers will provide you with the popular trading application Metatrader 4. New traders should consider a stint with a practice account before trading for real. Practice accounts allow new traders to try out hypothetical trades and refine their strategies without going bankrupt in the process.
Now that you have everything you need to get started, it’s time to consider your trades. The fundamental idea of online Forex trade is that you buy currencies that you believe are going to increase in value and sell currencies that you believe are going to diminish in value.
Successful Forex traders look at what’s going on in the world in terms of economics and politics, and try to predict how these events will affect the values of different currencies. For example if you detect that an emerging economy is about to enter into an economic boom period, then it makes sense to buy up that country’s currency; when the price rises you’ll be left with a healthy profit.