More than $4 trillion is traded in the Forex market every single day, so it isn’t difficult to understand why Forex trading is so attractive.
The principles of trading currency are the same as trading in stocks and shares, but the market is also very different. For one thing, stocks and shares are rarely traded for one another and their values are expressed in local currencies. On the other hand, currencies are valued relative to other currency and you can trade one currency for another.
One of the first decisions that anyone hoping to break into the Forex market needs to make is which broker they are going to use. Forex brokers provide the trading platforms used to exchange currencies. Unlike stocks and shares that are traded on a central stock exchange, currencies can be traded on any one of a number of Forex brokers. In fact, with so many to choose from, it can be hard to know where to begin.
What to look for
The first thing that you need to check is that the broker you are considering is legit and fully authorized to operate in the region where you live. This shouldn’t require anything more complicated than a quick Google search for the name of the broker and some online reviews. Don’t trust a broker just because they have a flashy website.
You also need to check out how it is that the Forex broker is making their money. A lot of the time, this is done through the use of commissions and spreads. Some brokers will use the fact that they don’t charge commissions as a means of enticing users in. While this might sound better for the user, these brokers will compensate with wider spreads that make earning a profit more difficult.
Finally, check the currency pairs that you can trade on the platform. The role of forex in an investment portfolio is usually to protect foreign investments, you can only do this if you are able to trade in the correct currencies.
Where to begin
As we said, there are a lot of Forex brokers out there. Here are some of the best places to begin your search.
IG is one of the oldest and most trusted online Forex brokers in the world. They offer a comprehensive roster of tradeable currencies and also provide users with the research tools and information that they need to take their trading to the next level.
easyMarkets began trading back in 2001. Since then, they have refined their platform into the sleek system that it is today. easyMarkets makes Forex trading accessible with a simple, easy-to-use trading platform available on desktop and mobile app. This is an excellent place to start.
CMC Markets is a truly global brand with offices around the world. Their platform is a great balance between simplicity and advanced features. The tools that are included are innovative and genuinely useful.
Choosing the right Forex broker is an important first step towards breaking into the currency trading game. It can be daunting at first, but as long as you do your research beforehand, you should be able to find the right broker for you.