Why Now May Be the Time to Start Forex Trading

What exactly is Forex?

Forex (FX) is short for "foreign exchange." The name is also applied to the marketplace where foreign currency is traded. It is not actually a marketplace but rather a decentralized series of networks from around the world linked electronically by computer where buyers and sellers of the world's currency gather. In a global economy, currency is exchanged every day.

A German manufacturer buying American parts typically has to pay for them with American dollars, so it will exchange euros for dollars using Forex. Because currencies are bought and sold every minute of every day, there is a market for investors who want to capitalize on the demand and supply price movements of currencies by buying or selling them.

When one country's currency increases in value against another, traders can buy the stronger, short the weaker, or a combination of the two. Because currency exchange prices fluctuate constantly, most trades occur on the same day. Profits and losses are recorded daily, and traders can amass significant profits (or losses) over time.

Best Forex brokers

1

9.4/10

Go to broker

eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. Don’t invest unless you’re prepared to lose all the money you invest.

Minimum deposit:

$50, $100 (for UK clients)

Bonus for deposit:

0%

Regulation:

CySEC, FCA, ASIC

Review

The eToro broker was founded in 2007. The company promotes itself as a social trading platform working with traders from over 140 countries. The broker has several divisions operating under different jurisdictions and licensed by different regulators. For example, eToro (Europe) is licensed by the Cypriot regulator CySEC (109/10) and eToro (UK) is licensed by the British regulator FCA (583263). The broker also has a representative office in Australia and the USA. eToro Profile Details

Pros/Cons

•the minimum transaction amount for copying is $1;

•handy functionality for passive investing;

•regulated by independent monitors;

•it is possible to purchase contracts for fractional shares (that is, to invest amounts less than the cost of one share);

•it is possible to buy shares at once (not CFDs) on the US stock exchanges.

•high spreads;

•periodic technical failures in order execution;

•lack of the most popular platforms such as MetaTrader 4 and MetaTrader 5 in Europe and the CIS;

•no access to ECN systems, orders are processed only according to the STP (straight-through processing) scheme with access to specific liquidity providers;

•there is a commission for withdrawing funds;

•impolite support staff;

•inconvenient website.

Study Review

2

9.2/10

Go to broker

Your capital is at risk.

Minimum deposit:

No minimum

Bonus for deposit:

0%

Regulation:

FSC (BVI), ASIC, IIROC, FCA, CFTC, NFA

Review

The name OANDA is an acronym for “Olsen & Associates” or “Olsen AND Associates”. It is registered in the United States and provides its clients with a wide range of financial services in most countries of the world. The company was founded in 1996 and is currently regulated in four jurisdictions. The main regulator of the broker is the UK Financial Conduct Authority (FCA). Oanda Canada is licensed by IIROC. The company has several significant awards to its credit, including a victory in the category "Best Forex Trading Technologies" from the UK Forex Awards, "Best Trading Platform" from FX Week, as well as "Best Customer Service" from the US Foreign Exchange Report.

Pros/Cons

•Minimum deposit from 1 dollar.

•A large selection of the most popular trading instruments.

•Several reliable and reputable financial regulators.

•Inconvenient and poorly functioning site.

•Lack of cent accounts.

•Lack of bonus programs.

Study Review

Can anyone do Forex?

With the advent of online brokers and sophisticated software tools, Forex has gone mainstream to the point where just about anyone and their neighbor has the ability to participate. While it does require some knowledge of currency markets and attention to current economic conditions, much of Forex trading is done using "technical" tools that provide traders with analysis and trends.

Software programs assist traders in identifying buying or selling trends and then executing a trading strategy. It sounds very technical. However, these programs include in-depth training and tutorials to get anyone up and running within a few days.

One of the reasons why Forex is so popular is that it has a reasonably low capital requirement - $1,000 for most types of trading. If that's too much, "mini-Forex" also only requires $250 to start. With mini-Forex, everything is the same as in Forex, except it occurs at just 1/10th the amount. It's like Forex with training wheels.

There are a number of reasons why anyone should consider Forex as a way to earn extra money.

• You don't have to be rich to trade Forex. Forex trading doesn't require a massive amount of capital to get started. A regular Forex account can be established for $1,000, or you could go even smaller with a mini-Forex account for $250.

• You can trade on your schedule: The Forex markets never sleep. Currencies are traded 24/7 worldwide, so you can trade in the mornings or evenings, before or after work.

• You can get out whenever you want: The Forex market is highly liquid, so your funds are available anytime. Don't like what you see? Cash out and take your money elsewhere.

• Currency prices are relatively stable compared with other securities: Because the market is so massive, and the whole world trades in currencies, price movements are much less volatile than other markets, and trends are more predictable.

• Your expenses are minimal: Once you are up and running with a trading system, your only real costs are the brokerage fees, deducted from the bid price on each trade. It's a small percentage, but Forex brokers are competitive, and it's easy to find discounts.

• You can profit from both up and down movements: Depending on the strategy you choose, you can capitalize on rising or declining currency prices or both.

• You play on a level field: Unlike the stock market, where insiders and stock experts have an unfair advantage with their access to information, the news and information that affects the Forex market is equally accessible to everyone.

• You will always have time for Forex: The technology behind the Forex market enables traders to complete their transactions within microseconds. You could be in and out of trade within a matter of seconds or minutes. You could complete all your planned trades before your coffee stops brewing. You will likely spend more time learning, researching, and planning your trades, but even that can be done in a few hours a week.

• Forex trading doesn't discriminate: It doesn't matter about your occupation, your education, your income, your age, gender, race, or even your knowledge about financial markets. Forex trading is the most accommodating of all markets to anyone willing to learn.

On the downside, Forex requires some time commitment to learn the ropes and develop a profitable system. Traders who don't have a lot of discipline often find themselves chasing trades or staying with trades beyond what their systems tell them to do. And some consider it a form of gambling which can be trouble for people with addictive personalities.