How to start forex trading | Choose a broker

Forex Trading is trading currencies from different countries against each other. Forex is acronym of Foreign Exchange.

Forex trading is not a regulated exchange. There are many risks associated with this market. Be prepared to lose when you first begin trading. Getting started in trading currency can be an extremely daunting task for someone with no experience in the forex market.

Currencies are always quoted in pairs, such as EUR/USD or GBP/USD. The reason they are quoted in pairs is because in every foreign exchange transaction you are simultaneously buying one currency and selling another.

Choose a broker:
Opening a brokerage account is similar to opening a bank account So the most important decision you will have to make is choosing the right brokerage firm. Look for good broker who has been in the industry for ten years or more. Experience indicates that the company knows what it’s doing and knows how to take care of clients.

Download trading platform:
After you choose a good brokerage and open demo account, the next thing you should do is download a trading platform first. All brokerage offers a range of trading platforms for the needs of all of their traders.

Open a Demo Account:
Most forex brokers offer demo accounts that let you experience the real-life price action of this market. Practice or demo accounts are funded with “virtual” money, so you’re able to make trades with no real money at stake and gain experience in how margin trading works.

It is time to open a demo account. Using a demo account is a good opportunity to make sure that you feel comfortable using forex. When you start a demo account, make sure to do it with a brokerage firm that you plan to stay with.

Currency Pairings:
one currency is always quoted against another. The ‘base’ currency is the one that can be thought of as the reference. For instance, in a GBP/USD quote, GBP is the base currency and the quote defines how many USD it costs to buy. Similarly, in EUR/USD, EUR is the base currency and the rate defines how many USD it costs to buy.

Note:
Before you start making trades you should get familiar with charts and how they work. It is a good idea to get familiar with the different time frames and the different types of charts.

I suggest you start trading for two or three month with a demo account before you invest real capital. That way, you can get a feel for the process and decide if trading forex if for you.