Step-by-Step Guide on How to Open a Forex Account
What is a Forex Account and Why do You Need it?
A Forex trading account is a client’s personal account opened on a broker’s platform. It stores the funds of the trader (you) for all your transactions. The funds deposited in the client’s trading account are his unconditional property and they remain at his full disposal.
How a trader uses his trading account:
Before starting to trade on the Forex market, a trader should choose a reliable broker to open an account with. Thereafter, the trader comes up with his main goals and chooses the appropriate type of account.
It is impossible to trade on Forex without opening an account, which stores the funds of the trader so he can conduct trading activities.
We recommend opening accounts with brokers through Traders Union. This allows you to get additional income in the future and have greater protections.
You can choose from among the list of top-ranked brokers.
Types of Forex Accounts
There are two types of Forex trading accounts: demo and real. A demo account is a training account and works exactly like a real one, except that the money you use is virtual (i.e., not real) money.
Real trading accounts are divided into Cent (micro), Standard or Classic, Professional, Crypto, ECN, and Swap-free Forex Islamic accounts. PAMM and RAMM accounts make up a separate group of accounts that provides the trader with passive investment income.
Demo Accounts on Forex
A demo account is a free training account with virtual currency that is useful to novice traders. With its help, a novice trader learns to trade on Forex in real market conditions and put the acquired theoretical knowledge into practice. The risk of losses is removed when using a demo account since you trade with virtual (and not real) cash.
A demo account allows you to:
- ● get familiar with the trading platform and the features of the Forex market;
- ● work out charts, monitor the situation on the market and analyze it;
- ● study and test the available financial instruments;
- ● polish up your technical skills before starting real trading;
A demo account has its pros and cons like any other type of account.
👍 Advantages of demo accounts:
- •almost every broker offers demo accounts;
- •no need to deposit real money;
- •allows you to polish up your trading skills in a comfortable environment and without risks;
- •study the features of the Forex market and its tools;
- •develop and test trading strategies;
- •most brokers do not limit your use of their/your demo account;
- •can be opened, closed, or reopened at any time;
- •virtual currency trading eliminates the problem of psychological pressure and stress.
- •long-term trading on demo accounts dulls your competitive skills and thwarts your Forex learning curve toward achieving successful trades (watching boxers in the ring and being a boxer in the ring are two different experiences);
- •lack of emotional stress makes the trader inattentive to his trading;
- •the trader gets used to the quick and high-quality opening of positions, which is not always possible when trading from a real account.
How to open a demo account?
A demo account can be opened not only on the broker's website but on all trading terminals.
Instructions for opening a demo account (the FxPro broker is used as an example):
Go to the broker’s website.
Register by providing your email, name, and phone number.
Click on the “Open Account” button.
Select “Demo” among the list of accounts and simultaneously mark the desired trading terminal in the drop-down list and then click the “Confirm” button.
After that, you will be assigned an account number and type, as well as a password. Enter these data when opening the trading platform.
The procedure for opening a demo account is simple and takes no more than 10 minutes.
There is a button opposite each broker’s name in the Forex brokers rating list on Traders Union’s website that allows you to open a demo account quickly.
Real Forex accounts
A real trading account allows you to trade in the Forex market using real money and receive real, not virtual, income. There are a few types of real accounts that differ in trading terms. All such accounts enable the trader to deposit funds for trading, perform trading operations, fill out applications for withdrawing profits, and also connect to various services for effective trading in Forex.
Main types of real trading accounts:
- ●Cent (micro, mini);
- ●Standard, Classic;
- ●Premium or Professional (Pro, VIP, Gold, and Premium).
Cent (micro, mini). Is an account with a minimum starting deposit, transaction number, and margin requirements. All trades on the market are displayed in cents and micro-lots. Opening a cent account is the best way for novice traders to practice real trading.
- •minimal investments;
- •optimal sizes for spreads and leverages;
- •training in actual trading conditions on a standard account;
- •testing and evaluation of trading conditions of a particular broker, including analysis of the effectiveness of advisers and robots.
- •trading conditions limitations — largely a reduction in transaction time and the assets number;
- •insignificant financial losses can make a trader too relaxed, which does not allow him to fully concentrate on trading.
Standard accounts (Standard, Classic). Are very popular among traders. They allow you to open transactions with a minimum amount of 0.01 lots, as well as work with instant and pending order executions.
- • most brokers have a constant spread level on these accounts;
- •it is suitable for non-aggressive medium- and long-term trading;
- •allows you to conduct auto trading on a daily, weekly, etc., basis and use trend advisers.
- •delays in the execution of orders when there are significant changes in the market;
- •not suitable for scalping and intraday trading.
Professional accounts. Are designed for professional traders. A few are: Professional, VIP, Pro, Gold, Premium accounts, as well as ECN and NDD. Their general characteristics are similar to standard accounts, but there are also some other differences, such as: the speed that orders are executed and increased accuracy of currency quotes.
- •wide range of financial instruments;
- •there are no limits on the duration of transactions;
- •access to quotes of the best liquidity providers;
- •can apply any strategies, including scalping, news trading, etc.;
- •social trading is available.
- •requires very large deposits.
You can find a broker for any size of deposit in the Traders Union rating list. For example, the Forex4you broker offers its customers a Cent type account with a minimum deposit of just $1, while Exness provides customers with standard accounts of $10 or more.
How to Open an Account on a Trading Platform?
A real account could be opened in the desktop version of the trading platform, as well as in the mobile applications MetaTrader 4 and MetaTrader 5. The account must be opened on the broker's website (instructions below) if trading is to be carried out using a web terminal.
To open an account in the MT4 and MT5 terminals:
How to Open an Account on a Forex broker’s Website?
To open an account on the broker’s website:
- ●register on the broker's official website by filling out a standard form with personal data: name, email, phone number;
- ●log in to your personal account by inserting your login and password;
- ●select the type of real account from the list and click "Open Account". After that, the account number will appear in your account, as well as the login and password for MT4 and MT5. Brokers recommend changing your password after the first login to the trading terminal.
Replenish your real account after opening in the currency specified in the corresponding window. When replenishing (in the payment purpose), you need to specify the number of the trading account.
Now you are ready to start trading on Forex. Congratulations.
PАММ Account for Investments on Forex
PAMM accounts are a type of trust management account that allows an investor to earn passive income. Even novice traders without any experience of independent trading can invest using the PAMM system.
The key point of the PAMM program is that one or more investors entrust their assets to a professional trader-manager. He carries out transactions from his account while using both his own funds and his investor’s funds. All investors share profits and losses in proportion to the amount invested. The manager gets a commission for successful transactions, the amount of which shall be agreed in advance and specified in the cooperation agreement.
How to Choose a PАММ Account
The key to success is to choose the right manager and PAMM broker. These are important criteria to evaluate brokers and their PAMM accounts:
How long in operation.
Choose PAMMs that have been opened for more than six months because accounts with a shorter operating period will not allow you to readily assess the profitability margins because their PAMM system has not yet obtained sufficient information and market statistics.
A PAMM account’s stability over the entire operation period matters more than its high indicators. An income of 100-400% indicates that the manager uses highly risky strategies leading to a quick deposit outflow;
There are no managers trading without losses. You should choose accounts whose drawdown levels do not exceed 40%;
Amount of the manager’s equity capital.
A trader who has invested big money will trade reasonably and as smoothly as possible.
Take the choice of a PAMM account seriously because the probability of achieving profits depends on it
How to Invest in PAMM
Simply deposit money into a PAMM account and start receiving passive income. To do that:
The investor (you) can withdraw funds from the PAMM account at any time. Therefore submit the appropriate application, indicating the amount required. In this case, it is up to the investor (you): to withdraw all the money, part of it or only the profit. When the money hits the broker’s account, the broker can invest them in other PAMM accounts or withdraw it in a conveniently accessible way.
Comparison of Training (Demo) and Real Accounts
A demo or so-called training account is the best option to start on Forex. Novice traders can test advisers, indicators, and their own trading strategies on a demo account.
|Account type||The need to invest real money||Ability to make trading transactions||Real trading income||Payments from Traders Union (rebate)|
Demo accounts have a lot of advantages but they all have one significant disadvantage. You are trading with virtual (imaginary) currency so it does not allow you to earn real money. That is why you should not use it for a long time.
Is it Better to Start with a Demo or Real Account?
You must open a trading account if you decide to start trading in the Forex market. However, before opening it, you must choose a reliable broker and determine your key goals as a trader, as well as define your financial capabilities.
Novice traders should start with a demo account. With the demo version, you will learn the key principles of Forex trading without risking your own funds and become familiar with the interface of your chosen broker.
Start with a Cent (micro or mini) account if you have a tight budget. Later you can increase investments step by step. This will protect you from serious financial losses.
We recommend investing in PAMM accounts or copying transactions of successful traders if you prefer to get a passive income rather than conducting your own trading.
Focus on trading conditions — the size of the minimum deposit, leverage, and the spread level — when choosing an account.
FAQs Regarding Opening an Account on Forex
I am a novice on Forex. What type of account should I choose?
Choose a reliable broker among the Traders Union ratings, and then open a demo account with digital funds.
What types of accounts are there on Forex?
There are demo and real accounts and Cent, Standard, and Premium real money accounts. Their respective trading conditions differ.
I plan to engage in passive investing. What type of account should I open?
Open a PAMM account with a trusted and reliable broker to get passive income.
How long does it take to open a trading account with a broker?
The whole procedure takes less than 10 minutes. You need to register on the broker's official website and install a trading terminal or open a web platform.