Forex Trading

Foreign exchange (forex) trading has become increasingly popular over the past few years. The major reason for this upsurge in popularity is simply because more people are aware that you can make money trading currencies in the same way that you can trading stocks and other financial instruments.

But it is also fueled by the fact that forex trading is now accessible to virtually anyone with a computer and an Internet connection. In the past, only big institutions such as banks, multinational corporations and central banks traded in the forex markets. But the emergence of the Internet has made it possible for individual investors (also known as retail traders) to trade forex.

Best Brokers Forex Trading

BROKER

FEATURES

OVERALL RATING

24option Logotype
Minimum Deposit: €250
Regulated Broker
Mobile Trading
IQ option logo
€10 in Minimum Deposit
Regulated broker
Other trading products
eToro Logo
Minimum Deposit: $50 – $1000
Social Trading
Over 7m investors
BDSwiss Logo
Minimum Deposit: €200, $200 or £200
Authorised in the EU & US
Mobile Trading
24option Logotype

Minimum Deposit:
€ 250

Trading Options:
Forex, Cryptocurrencies, Stocks, Index, Commodities and CFD

BDSwiss Logo

Minimum Deposit:
$200, £200 or €200

Trading Options:
Forex Trading, Cryptocurrencies, Shares, Stocks, CFD

Introduction to Forex Trading

If you’ve ever had to exchange money, then you are familiar with the basics of currency trading. You use one currency to buy another. Currency traders make money by taking advantage of the changes in price between a pair of currencies. To illustrate, let’s say that one US dollar is worth 1.24 Canadian dollars. You spend $100 and get $124 Canadian dollars. If the US dollar is suddenly worth 1.20 Canadian dollars, you can sell your $124 Canadian dollars and get back $103.33. This means you’ve made a profit of $3.33.

One thing you will notice is that currency price fluctuations are very small. The value of one currency against another usually fluctuates less than 1% per day. While this makes the forex market one of the least volatile, and one of the safest, markets around, it is also difficult to make money from price movements unless you have access to large amounts of capital.

Thus, most retail traders rely on leverage from their broker. Leverage means using borrowed capital to make trades. Brokers provide leverage in amounts that range from 50:1, 100:1 up to 200:1. If you avail of leverage of 100:1, for instance, you can trade up to $100,000 by depositing just $1,000 into your trading account.

The ready availability of leverage is another reason why forex trading is so popular, since it allows traders with small amounts of capital to make larger trades and potentially make bigger profits. Of course, it also makes forex trading more risky since it also increases your potential losses. But this risk is moderated by the fact that currency prices generally experience only small daily fluctuations. In addition, responsible currency traders use risk management techniques such as placing take-profit and stop-loss orders in order to limit the amount of their losses if the price movement goes against them

Is It the Right Time to Invest in Forex?

The simple answer to this question is: are you ready? There is a number of things you have to be aware of before you start trading. The most important is that you won’t become a millionaire overnight, or maybe even in a year. If you believe that trading forex will generate instant wealth, you should probably not start trading at all since you will only be disappointed.

You should also realize that to be successful in forex trading, you have to treat it as if it were a career. This means that you have to devote time to learning about how to trade before you start, which requires a lot of patience on your part.

Forex trading also involves spending lots of time alone in front of a computer. Trading is not a social activity and if you do not work well alone, then it may not be for you. Being a successful forex trader means that you will have to be very self-disciplined, since there is no one to supervise you and you only have to answer to yourself.

If you need constant guidance or reassurance, then you should probably reconsider your decision to be a forex trader.

Another important thing to realize is that you will not be successful all the time. 

There are times when you may lose a lot of money in your trades and you have to accept this. If you are not able to accept losses, then you should not be trading.

As a corollary to the above, you also have to accept failure. When you trade, you will inevitably make mistakes, and these mistakes may cost you money. You have to take losses in stride in order to thrive as a trader. You have to learn from your mistakes, let go of your negative feelings and then move on.

Finally, you have to be emotionally stable in order to be a successful forex trader. If you are the type who loses their cool quickly, then forex trading is probably not for you. It can be a very fast-paced activity where you can lose money very quickly and you should not panic or give in to your emotions. Being emotional while trading can lead to mistakes that can cost you a lot of money.

There is a lot of information available on Binaly.com that you can read to help you decide if forex trading is really for you and if it is the right time for you to start trading. If you feel you are ready, then you can sign up for an account from one of the recommended brokers. You might want to choose a broker that offers a demo account, since this will allow you to practice trading using virtual money. Once you are ready, then you can start making live trades using real money.

How to Start with Forex Trading

One of the best things about forex trading is that the bar to entry is very low. You can easily sign up for an account with a forex broker and you can start trading as soon as you deposit money into your trading account. Many brokers provide educational resources on their site that you can study, so you can learn the fundamentals of forex trading before you start to make trades.

If the broker you choose provides demo accounts, then you should sign up for one before you start trading. A demo account gives you a certain amount of virtual money that you can use to make paper trades. You are free to practice trading and make mistakes without losing money. You should only start making live trades with real money once you feel ready.

You should also make sure to do your homework. There is a vast array of resources available online about forex trading that you can access. You can also look through the earlier sections of this guide since they will give you a quick overview of what forex trading is about and if it is something that is right for you.

Once you feel ready, feel free to look over the list of brokers presented on Binaly.com. These are reliable brokers that you can trust, since the curators on the site have made sure that they have a good reputation and are trustworthy since they are regulated. So you can sign up for an account with any of them without being afraid that you will be the victim of a scam.

Signing up for an account usually takes just a few minutes. You can start trading once you deposit money into your account. There is usually a minimum amount that you will need to deposit so you should familiarize yourself with these requirements.

You should also look at which payment options the site accepts for making deposits and withdrawals from your account. The usual payment solutions include credit and debit cards such as MasterCard and Visa, and payment solutions such as Neteller and Skrill, as well as bank transfers. However, not all these payment options are available for all countries so you should check if they are accepted in your home country.

How to Choose the Best Broker for Forex Trading

When you are looking at the list of brokers presented on Binaly.com, you may feel challenged as to which one to pick. Of course, the staff on the site has made sure to list all the best ones on the market so that new traders can enjoy peace of mind when they sign up for an account with them. But what are the other considerations to keep in mind?

Is the broker regulated? The best brokers are members of one or more recognized regulatory agencies. As members of these agencies, the broker agrees to adhere to their guidelines as well as the best practices of the industry. An important part of regulation is protecting traders against fraudulent and abusive practices, as well as ensuring that the markets behave in a transparent, open and financially sound manner.

Which regulatory body the broker is a member of usually depends on where they are registered and based. The most prominent ones are the Commodity Futures Trading Association (US), Financial Conduct Authority (UK), the Cyprus Securities and Exchange Commission (CySEC), and the International Financial Services Commission (Belize). The site should clearly state which agency or agencies they are a member of, as well as the member number. Every broker that is listed on the Binaly.com site is registered with at least one regulatory agency, and is generally licensed to operate in all EU states.

What are the transaction costs? Forex brokers do not charge commissions but instead make their money from the spreads, or the difference between the buying and selling prices of the currency you are trading. Try to look for the broker that offers the lowest rates since these costs may affect your profits over time.

Account details. You should look at how much leverage the broker offers as well as the minimum deposits required before you can start trading. Of course, you should also keep in mind that using higher amounts of leverage may result in having to accept greater risk in your trades.

Another consideration is what payment options the broker accepts for making deposits and withdrawals. The best brokers accept a wide range of payment solutions as well as bank transfers. You should also make sure that the process of depositing and withdrawing is easy and hassle-free.

What trading platform do they offer? The trading platform is your way of making trades and interacting with your broker, so it has to be user-friendly while still having all the tools that you need to analyze the markets and identify trading opportunities. The majority of brokers are likely to offer the industry standard MetaTrader 4, although some have their own proprietary platforms.

If possible, try using the platform first. Is the interface easy to use, with the important features such as Buy and Sell buttons easily accessible? Can you perform all your trading activities without making costly mistakes? What customization options are available?

What is their customer service like? Since forex trading is a 24-hour activity, you should be able to access customer support round-the-clock and not just during office hours. They should also offer a range of ways to get in touch with them, including live chat and contact numbers. Before signing up with a broker, try getting in touch with customer service to see how timely the response is and how knowledgeable their support agents are.

When you are looking at the list of brokers presented on Binaly.com, you may feel challenged as to which one to pick. Of course, the staff on the site has made sure to list all the best ones on the market so that new traders can enjoy peace of mind when they sign up for an account with them. But what are the other considerations to keep in mind?

Is the broker regulated? The best brokers are members of one or more recognized regulatory agencies. As members of these agencies, the broker agrees to adhere to their guidelines as well as the best practices of the industry. An important part of regulation is protecting traders against fraudulent and abusive practices, as well as ensuring that the markets behave in a transparent, open and financially sound manner.

Which regulatory body the broker is a member of usually depends on where they are registered and based. The most prominent ones are the Commodity Futures Trading Association (US), Financial Conduct Authority (UK), the Cyprus Securities and Exchange Commission (CySEC), and the International Financial Services Commission (Belize). The site should clearly state which agency or agencies they are a member of, as well as the member number. Every broker that is listed on the Binaly.com site is registered with at least one regulatory agency, and is generally licensed to operate in all EU states.

What are the transaction costs? Forex brokers do not charge commissions but instead make their money from the spreads, or the difference between the buying and selling prices of the currency you are trading. Try to look for the broker that offers the lowest rates since these costs may affect your profits over time.

Account details. You should look at how much leverage the broker offers as well as the minimum deposits required before you can start trading. Of course, you should also keep in mind that using higher amounts of leverage may result in having to accept greater risk in your trades.

Another consideration is what payment options the broker accepts for making deposits and withdrawals. The best brokers accept a wide range of payment solutions as well as bank transfers. You should also make sure that the process of depositing and withdrawing is easy and hassle-free.

What trading platform do they offer? The trading platform is your way of making trades and interacting with your broker, so it has to be user-friendly while still having all the tools that you need to analyze the markets and identify trading opportunities. The majority of brokers are likely to offer the industry standard MetaTrader 4, although some have their own proprietary platforms.

If possible, try using the platform first. Is the interface easy to use, with the important features such as Buy and Sell buttons easily accessible? Can you perform all your trading activities without making costly mistakes? What customization options are available?

What is their customer service like? Since forex trading is a 24-hour activity, you should be able to access customer support round-the-clock and not just during office hours. They should also offer a range of ways to get in touch with them, including live chat and contact numbers. Before signing up with a broker, try getting in touch with customer service to see how timely the response is and how knowledgeable their support agents are.

Why You Should Get Involved with Forex Trading

The forex market is the largest in the world. On average, trading volumes reach up to $2 trillion daily. This makes the forex market highly liquid, meaning that you can easily convert your currency positions into cash without suffering from a price discount. There is no possibility that your trade will be stuck since there is always someone who will buy when you are selling and vice-versa.  

You can trade 24-hours a day. Unlike other types of financial markets, there is no centralized exchange for trading forex. This means that you can usually find an open market no matter the time of day or night, five days a week.

There are four main trading sessions throughout the day, starting with Sydney, London, Tokyo and ending with New York, with each session lasting nine hours. There are also times when two sessions overlap and these are the best times to trade, since the market is busiest and there is more volume being traded.

There is no possibility for price manipulation. Unlike other markets such as the stock market, the forex market is so huge that it is impossible for a single entity or organization to control currency prices for a long period of time.

There is a low bar to entry. You don’t need to have a lot of capital in order to start trading forex. As we already discussed, forex brokers will provide you with leverage so that you can trade bigger lots while maintaining only a small percentage of the value in your trading account.

In addition, you can trade with smaller lot sizes, although doing so will also reduce your potential profits. The standard lot size for currencies is 100,000 units, but brokers also provide mini-lots of 10,000 units and micro-lots of 1,000 units. You also have the option to create your own lot sizes as long as they are larger than 1,000 units.

Brokers charge no commissions. Instead of a commission fee for every transaction, the forex broker makes his money from the difference between the buying and selling price of a currency. This usually amounts to 0.1% of the transaction cost, although with larger brokers, it could be as little as 0.07 percent.

There is a lot of profit potential in the forex markets. You can actually make money even if the value of a particular currency pair is going down, simply by selling it. This means that there are plenty of ways to make a profit by trading currencies.

Where and How to Purchase Currency

There are two ways you can purchase forex, as spot or as futures. Spot trading means that your broker directly buys currencies on your behalf from the markets. However, no currency actually changes hands as everything is done digitally. Futures trading, on the other hand, involves purchasing contracts that require you to buy or sell a certain number of units of a currency pair at a particular price and at a future date. These contracts are traded on futures exchanges that regulate their pricing and clearing. Most retail traders choose to spot trade since futures trading is riskier, with a higher potential for losses.

There are two main ways that you can analyze the currency markets to determine the best time to buy or sell currencies.

Fundamental analysis involves looking at external political and social factors that could affect the price of currencies. For example, a controversial national election could cause the value of a country’s currency to go down as market participants sell it due to uncertainty over the political situation. On the other hand, a rate hike by the central bank could increase the value of the national currency since higher interest rates attract more investors.

Technical analysis analyzes currency prices to find trends that could indicate future price movements. The basic principle behind this type of analysis is that price movements in the past will tend to repeat themselves at some point in the future. So, technical analysts will keep an eye out for patterns that could indicate that a particular price movement is about to happen again.

The most common tool used by traders who use technical analysis is charting software. This software takes historical price data and turns it into charts so that patterns can more easily be identified. This tool is available with most trading platforms, along with other tools such as access to daily news feeds.