Online FOREX trading is one of the biggest changes to hit investing since the Internet became readily accessible. The foreign exchange market used to be off-limits to retail investors. Only large banks, hedge funds and governments played there, but with the advent of online FOREX trading, a whole generation of investors have been exposed to one of the most profitable (and riskiest) endeavors in all of finance. That said, online FOREX trading isn’t that difficult to understand, but investors do need to practice before trading for real money.
Understand What You’re Seeing
Upwards of 95 percent of online FOREX traders will trade currencies in pairs, meaning investors will buy one currency against another. On his screen, the investor would see a pair such as this: EUR/USD. This is the Euro/U.S. dollar pair. By going long in this pair, he wants the Euro to rise against the dollar. By selling short the pair, he would want the dollar to rise. When going long, the first currency in the pair is the one the investors always wants to go up. When selling short, the second currency in the pair is the one he wants to see rise.
Setting Up An Account
As the online FOREX industry has exploded, so has the number of online brokerages. The most important thing to remember when choosing a broker is finding a regulated broker. In the United States, investors should find brokers registered with the Commodities Trading Commission.
Unlike stocks or other assets, most online FOREX brokers give investors the opportunity to trade in a practice account with fake money for a limited period of time. The only thing that is fake is the money. The quotes and the charts are real, giving this simulated environment a real-world feel that cannot be beaten. Newcomers to the world of online FOREX trading should take advantage of this outlet.
Considering that online FOREX trading isn’t even 20 years old, there is a wealth of resources online for investors. Blogs, product reviews, trading services and anything related to online FOREX trading can be found by typing “FOREX trading” into any search engine. New traders should take advantage of this and do some research before jumping in with real money.
All Day, All Night Just Like The Market
The FOREX market is open 24 hours a day and so are online FOREX brokers. Investors wanting to trade as much as possible will love online trading. It is truly the best way to go to maximize access to the FOREX market.
Investors need to ensure they have the proper Java software running on their PCs to receive the best data and online FOREX quotes. If the quotes are bad, or not running in real-time, it’s going to be hard for the trader to make the right trades.
Is Online Forex Trading For Everyone?
Online FOREX trading requires plenty of capital, knowledge and steely nerves. It is fraught with risk and not for investors that haven’t spent at least a little bit of time studying the FOREX markets. Study the markets and various brokers. Then trade in a practice account before deciding whether online FOREX trading is right for you.