The increasing number of online forex trading platforms has made the task of opening a forex account as easy as pie. Moreover, forex trading has become just as easy, given that these platforms offer round-the-clock access to trading charts, and some even provide live expert advice.
Before you set out to open a forex account, you must determine what type of trading account would be most appropriate for you. Online forex trading sites offer multiple account types to accommodate different investment sizes and trade patterns of investors. Generally, an investor needs to select from the following options:
Business account versus personal account. The former is mostly created by experienced traders investing large amounts of funds.
Spot trading versus futures trading account. The former is preferred by traders who want immediate gains.
Micro versus standard account. Since inexperienced traders typically start with a small trade capital, micro accounts are ideal for them. The deposit size in a micro forex account can be as low as $25 and as large as $10,000.
Having chosen a relevant type of account, follow these steps to open a forex account and commence trading:
Typically, forex account registration is done online, although you may be asked to register by fax in certain rare cases. The registration process basically entails furnishing personal and contact details and information regarding a valid credit card.
If you are seeking a third party, such as a commodity trading advisor, to execute transactions on your behalf, you will be required to furnish a power of attorney in writing. An investor with such a discretionary or managed account is freed from the hassles of monitoring and executing daily trades.
Before authorizing the terms and conditions of a forex trading account, you must understand the following basics of the platform:
Its hours of operation and availability of live support.
The bid spread available on it.
The minimum account and lot size requirement.
The general trading contract, which must be fully comprehended and saved on your PC.
Finally, practice on a demo account before blocking real money on the forex market. Most established online trading websites offer a demo account to first-time investors, enabling them to not only practice dummy trade but apply trade strategies like stop loss and trailing profits.