Forex trading, also known as currency trading, is done for the purpose of generating profit. Those who are new to currency trading will have to deposit money in their account. There are a number of ways to do that, including through your checking account, by wire transfer, check or credit card.
Checking accounts and credit cards are quite similar in terms of depositing money. You will usually have a Visa card issued on opening your checking account. The type of credit card that many Forex brokers use is MasterCard or Visa. Given that your bank and credit card are issued by Visa, you can use both of them.
The best way to go about depositing is to use your checking account. The other methods incur additional costs. For example, if you choose to use a wire transfer, you will get charged before your order is being processed. Moreover, the deposit will not show immediately as it has to be verified. If you go for a deposit by check, you will have to mail it in an envelope. It will take about three days to process the check before the money is withdrawn from your account. In all, when you use a check deposit, you should allow a period of seven days before the deposit is made. Moreover, you will be using three additional resources – stamps, an envelope, and a check – to make a deposit. Doing it online will save you money and time. Traders that operate small businesses can go for a business checking account and then deposit money. This can be done at any banking institution close to their registered address or at a bank of choice.
Before you start trading, you should learn what spreads are. The spread is the dealing price or the difference between the buying and selling prices. When you see a two-sided quote, the bid represents the price at which the base currency is to be sold. The ask price is the opposite: the price at which this currency can be bought.
Then, you have to choose a currency pair and learn how you can trade with it. Naturally, EUR/USD is the most heavily traded currency pair. Due to high volatility, many Forex traders also go for the GBP/JPY currency pair.
As a next step, you have to decide on the trading platform you will use. Forexyard and Finexo are just two examples. In general, platforms determine the way your computer screen will look like when you are trading: how a currency pair performs, what the current sell and buy prices of different currency pairs are, how to keep track of funds, etc.
It is a good idea to first use a demo account rather than real money. When you become confident enough and make good trades most of the time, you can go live. Keep in mind that a number of factors have impact on currency prices, from political to economic conditions. Inflation rates, interest rates, and the overall stability of a country influence currency prices. Moreover, governments can also exert influence on currency values by trading on the currency exchange markets.
Live forex trading services are a good way to learn and comprehend forex trades in practice.
Free charting webinar
Mon, Nov 18th, 2013 12:00 PM - 1:00 PM EST
During the 60 minute session Paul Coghlan, founder of Coghlan Capital, looks at current charts for currencies, precious metals, US indices, highlighting turns and low risk entry points using the Median line analysis methodology.
Median line analysis reduces risk and increases the chartists ability to see trend direction, trend strength and highlight entry and exit levels.
Seats are limited so be sure to reserve your spot today. The webinar will be recorded, by signing up you'll receive an email with the webinar replay afterwards.