Friday, May 17, 2024

Opening a Forex account – all you need to know

Many novice traders in the financial markets ask themselves the question: “How to open a forex trading account?“, And we have an answer for them.

To trade in financial markets, including the international forex market, you need to find an intermediary between you (the trader) and the market itself. It is challenging to gain access to trading on the exchange and OTC markets without a broker (intermediary), and in most cases, it is unnecessary, especially for novice traders.

However, first of all, it is worth choosing a reliable forex broker since the quality of the services provided and the coverage of non-trading risks depend on him. Most often, registration with a brokerage company takes place via the Internet. Therefore, we advise you to study the broker before opening a trading account carefully.

Types of trading accounts

Standart, classic – the most common type of account. The minimum lot is 0.01, Stop Loss and Take Profit are set both when opening a deal and after it. As a rule, such accounts have a fixed spread level, making it easier to calculate price targets. There may be delays in execution in an active market. Suitable for trading on daily charts and non-aggressive intraday trading (Timeframe not lower than hourly charts). It can also be used when working with trendy forex advisors (not scalpers).

ECN accounts. They are especially suitable for intraday trading with frequent entries and short trades. And also for robotic scalpers. Distinctive features of such an account are lower than on the standard, but not a fixed spread and the presence of commissions per transaction. It is also worth noting that ECN accounts have better execution than classic ones, but there are slippages in an active market and spread widening.

Swap-free accounts do not have a swap (roughly speaking, the commission for moving a position to the next day). Swaps are so small and insignificant that a swap-free account is only a good choice if you or your advisor keep positions open for many weeks. This type of account is distinguished by an additional commission for opening transactions, compensating the broker for the absence of swaps.

Cent accounts are used most often for working with experts on martingale and testing Forex strategies in practice. Read more about cent accounts in this article.

Demo account. Virtual money, but everything is real: the same charts, the same prices. You can even open two terminals simultaneously: one with a real one and the other with a demo account and compare prices – everything will be the same. A demo account is needed first of all for beginner forex traders to figure out how to trade on the Forex market.

Choosing a broker

How to open a forex trading account? The first step is choosing a broker. Register with a trusted company that has been on the market for at least five years. It is good if the organization offers favorable conditions, provides bonuses to the account.

After choosing a suitable broker, follow these steps in sequence:

  • Registration with a broker. Click on the appropriate button and consistently fill in all the proposed documents. You will have to confirm the specified email address and the information provided. Come up with a username and password. Do not pass the information on to third parties under any circumstances.
  • Go to your document. All types of accounts are opened here. To do this, agree to a contract with the broker. This can be done with a simple mouse click. The specific interface differs from company to company. Most often, an account is opened with a simple “open an account” button.
  • Specify the details of your bank wallet. Sometimes it is allowed to use alternative payment systems- for example, Webmoney.
  • Indicate the type of account the trader opens. Compare the trading conditions beforehand.
  • Get your merchant account number. It is a unique identifier used to identify the available balance.
  • Top up your account in any convenient way.

Now get to work.

Sam Allcock
Sam Allcock
Sam heads up Cheshire-based PR Fire, an online platform that has already helped over 10,000 businesses to grab widespread media coverage on their news at an extremely accessible price point.

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