What to Look for When Opening a Forex Trading Account
It’s easier than ever now to begin investing in the foreign exchange, but doing it right is critical. You have a few essential aspects to consider, such as what type of account to open and choose a good broker.
Find the Right Type of Trading Account
There are a few different types of Forex trading accounts. You can choose from a mini trading account, standard account, or a managed trading account. The struggle for most people is that they realize they started the wrong type of account when they are too far into their investments.
- A standard trading account allows traders with up-front and adequate capital to trade in full lots of $100,000. Brokers typically provide full services and offer perks for these investors. But, for this type of account, you usually have to have a minimum of $2,000 or $5,000 depending on the broker.
- A mini trading account gives traders access to mini lots of about $10,000 rather than full lots of $100,000. Most brokers don’t require thousands of dollars to open an account, and these accounts have a lot of flexibility.
- A managed account is when you decide to invest but give all the investing power to a professional. You will not make buying or selling decisions. These accounts can work in pooled funds, or through individual accounts.
Choose a Regulated Broker
Finding a reputable broker isn’t enough; plenty of reputable brokers can lose everything overnight. A regulated broker offers a safety net in so many ways. You’ll know that they are open to regular audits and have insurance. When choosing a broker get involved on Forex forums and put a bit of time into researching them before opening an account.
Access to Resources
Forex has some wonderful forums and a great community, but you need access to quality resources. Easymarkets.com has a massive library of videos explaining different aspects of Forex as well as their platform. Find a few high-quality resources for information before you open an account. Trading in Forex always has a learning curve, but getting to know the market and current trends before jumping in can make a huge difference in your trading experience.
Among resources, you’ll need to read Forex charts, which technical indicators to follow and calculate, and how to interpret the market. Trading in Forex will require a substantial amount of time unless you have a managed account, but having access to quality resources can eliminate time spent double-checking information.
Goal Setting
Traders often jump in with the idea that they want to make as much as possible. That’s unrealistic, and it means that you don’t have a plan. Before anything else, before finding a broker or opening a Forex account, set out a few goals. They could all be short term goals to test the market or long-term goals for a trading career.
After setting your goals, break those down into small milestones, and create a plan. Redraft and adjust your plan as you learn more about the market and as trends change. But when finding a broker discuss your plan and your goals with them when opening a trading account.
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