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Submitted by: John W.
There are a lot of things that you need to know and understand if you are just a beginner when it comes to foreign exchange trading. Forex is very complicated and often times confusing but it can be learned and mastered. It is a type of investment where you will be dealing with foreign currencies instead of shares or stocks so the principles as well as how trades are done are very different.
Forex of course requires an initial investment. Standard forex accounts require minimum deposits of $1,000 to $2,500. You don’t have to always start with a standard account though. You can initially start your trading with a micro account. A micro account only requires investments that range from $250 to $500. It is best that you begin with this micro account and gain some experience before you upgrade to a standard account. A micro account will give you an idea on the market environment and as to how trading is done. These prepare you to the rigors and complications of a standard account. This is how forex trading for beginners should start. Get experience and skills before you ante up the stakes on your trades.
Most forex trading platforms also offer what is called a demo account. You can look at it as a free forex trading practice session. In it you trade currencies with virtual money. This way you get to learn the ropes of trading before you get into the real thing. These demo accounts are often online so you need a computer set and a fast and reliable internet connection.
Compared to other types of investments, forex trading have obvious benefits and advantages. First, you have total control over your investment. Second, you have no need of a broker although you have the option to get the services of one. Third, it does not collect certain fees that are common among other kinds of investments. Fourth, the government does not collect fees from traders on foreign exchange markets. And last but not the least, you can trade pretty much on any time of the day or night for that matter. Most forex trading markets are open 24 hours a day of the week.
As with any industry or business, forex trading comes with its own risks. These risks include limited protection provided by regulators and the need to meet required margin for each investment made or you will have to pay for the losses.
If you are planning to be involved in forex trading, there are some things you need to make sure that you have or have done before you get yourself into the mix. First, you need to understand the terms and the jargon of forex trading. Second, learn all you can about forex trading before you even think of making your first trade. Third, always make use of the demo account or simulator to get a feel of the action so that you will know how things are done. This helps you go in prepared and with experience. As we stated earlier, forex trading for beginners can be very complicated but once you get used to it, it ceases to be.
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