Forex trading could prove to be quite tricky for someone who is only just starting out. Although, the movements or fluctuations are quite small, the losses or profits could get big based on exposure. If you have made up your mind to start trading, there are a few things that you need to consider before you are on your mark. The first thing to do would be to go through a list of forex brokers and pick the one who offers the most benefits. Choosing the right broker depends on many factors. You have to check the kind of platform offered by the broker, the tools that are at your disposal to assist you during trading and the leverage that is on offer.


Different forex brokers offer different levels of leverage, with 100:1 being an accepted leverage, where you need to pay a margin of $1000 for $100000 in forex trading value. Greater the leverage, greater is the amount for which you can have exposure, if you want to go for bigger profits. Similarly, you will have to consider and compare the tools on offer. You will need statistical analysis of the forex markets, price alerts, graphs, charts and other automated tools that can assist in decision making. Comparing the commissions will also give you an idea although, not all brokers charge exorbitant commissions. Moreover, some brokers also offer free demo accounts for your practice to help you get up to speed with currency trading.


You will also have to consider the currency pairs that you want to do forex trading in. In other words, you will have to pick a currency pair like Euro and US dollar, British Pound and US Dollar or US Dollar and Japanese Yen. Although, you can trade with multiple pairs, you have to start with a pair that you are comfortable with and have an understanding about. Success with currency trading largely depends on how well you can predict the movement of one currency with respect to another, based on which you either buy or sell the currency. Forex brokers can help you understand the fundamentals about currency trading including the understanding of exposure and leverage, stop losses, upward and downward trends and historical data.


Some forex brokers offer the option of downloading the FX trading terminal along with the tools that can help you analyze the trends. You will have to consider the tools that you will need and are comfortable with. You will also need to consider how much to start forex trading with. If you don’t have much experience it is important to either trade on demo accounts or trade with real money but in very small amounts. There are many different strategies to apply and hence you will have to choose whether you would be a risk-aware trader or whether you will go for bigger gains. Some platforms even offer safety nets like mechanisms that automatically exit when the price goes above or below a particular mark.

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