how to start forex trading

How To Trade Forex For Beginners

Trading forex, also known as foreign exchange can be an exciting hobby which can earn you an extra coin.We will teach you how to start forex trading even if you are a beginner.

No, many people actually rely on forex as the main source of income. To prove this is the rise in the amount of money that is traded on forex market trades on each day.

One can trade on foreign currencies in many ways through the available platforms online. Check out our top rated forex brokers.

Here are 7 simple steps on how to trade forex for beginners:

1) Examine the Trading Position

First, you need to take a look at the trading position of the country you are willing to trade the currency.

For instance, if the country produces many products that are constantly in demand, then there are high chances that the exported goods will help the country make good money.

A boost to a country’s trade in most cases translates into a boost in the value of the country’s currency.

2) Find out on the Country’s Economic Reports

Secondly, do a research on the economic reports of the country in question.

You can find comprehensive information by looking at the country’s GDP reports as well as reports on other important factors like inflation and employment status.

All these are likely to influence the value of the currency of the said country.

3) What Are The Possible Economic Trends?

Predict the economic trends of the country. For instance, should you feel that England’s economy will weaken, then you ought to know that this will cause a negative impact on the EUR, then it will be prudent to sell the EURs in exchange for a currency whose the economy is much stronger and may be more stable.

4) Study the Political Weather

Look at the country’s political climate. Should the country be in an election year, then there are two possibilities.

If the win goes to a leader who has great fiscal agenda then the value of the currency is likely to go up.

In many cases, the new governments will want to make the trading environment friendlier during such times, if this happens more people will venture into the trade markets something that is likely to boost the value of the currency in question.

5) You Will Be Calculating Profits, Learn How To

Learn how to calculate the possible profits. To avoid unnecessary losses as a beginner, then consider opening a demo trading account where you can do calculations using virtual funds.

Profits are calculated by determining the number of pips between a currency pair. A pip is a difference in value between two currencies that are in a currency pair.

In many cases, a pip is equivalent to 0.0001. This means that if a currency pair of EUR/USD moves from 1.354 to 1.356 then your pair has moved by 10 pips.

In order to know how much you have earned, you will need to multiply the number of pips earned from your account times the exchange rate. The result of this calculation is the indication of how much value has been gained or lost by your account.

6) Choose a Trusted Dealer

You also need to be careful as you select your preferred broker or dealer. The company has to be led by professionals who knowwhat they are doing.

We pride ourselves as a regulated dealer with a wide array of products at your disposal. We will also offer demo trading account which will help you in gaining some experience before you trade in real money.

7) Do a Research on the Available Account Types

Get information on the available accounts. Note that you can choose to register for a personal account where your trades are yours to make or a managed account where the dealer will offer insights and make the trade on your behalf.

While still on the account opening details, be sure to inquire about the associated costs such as the cost of transferring funds from a bank account to your forex account.

As proof of the account opened, you can ask for documentation. This can always be sent to you by email.

The next step is to activate your account. This is the final step to you accessing your account. The access link will be sent to you by the broker by email.

Follow the link and all the instructions and you are good to start trading.

Always remain calm, remember to always analyze the market before casting the dice.

Best Forex Brokers 2024

Forex trading is a process of exchanging currencies. FX trading has never been easier and perhaps you want a piece of the action.

best forex brokers

This article will help you understand the elementary matter of getting into the game with a reputed and established broker. This page contains all the tools you need to make it as a successful trader.

So let’s get right into it.

Top Rated Forex Brokers

Rank Broker Min. Deposit Regulated Features Review
1
review $100 YES + BEST SUPPORT
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(Futures only)
1
review $200 YES + CRYPTO TRADING
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2
review $100 YES + CRYPTO
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3
review $100 YES + GREAT PROMOS
VISIT

76% of retail investors accounts lose money when trading CFDs with this provider. eToro USA LLC does not offer CFDs, only real Crypto assets available for US traders. AFSL 491139.Capital at risk. See PDS and TMD.

Choosing A Forex Broker

Forex brokers are numerous all over the world. However, whichever one you choose will be a decisive move indeed in your career as a trader. All of them look promising, but not all of them deliver on their promises. So your best choice lies with a broker that is strictly regulated by the government and has superb reviews from the majority of clients.

Once some fitting candidates are selected, you can get a little nit-picky and scrutinize these details to cipher out the right one for you.

  • Service quality: A lot of this depends on whether the broker is licensed and regulated by an authority such as the CFTC and registered with the FCM. Usually you do not have to pry any further than the broker’s official website to find out what’s what?
  • Spreads: A spread explains the discrepancy between the buying price of a currency and its selling price. It is calculated in ‘pips’. A spread essentially how the brokers earn money in lieu of receiving a commission. So unless you have a soft spot for your broker at the expense of your own financial returns – unlikely – you should look for a broker with as low a spread as can be found.
  • An assortment of tools and information: Each Forex broker has its own trading platform online that customers can access to do their trading. Usually, this platform contains additional information such as charts and other kinds of data in real time and commentaries.
  • Options in leverage:Leverage is a huge deal in Forex trading. It comes across as a ratio between the total capital relative to the real capital – the amount lent to you by the broker to trade. With ratios expressed up to 250:1, it exponentially enlarges your winning potential but also your loss if the trade does not work out as you has predicted.
  • Types of accounts: Forex Brokers usually afford multiple accounts to their traders. There is the mini account which requires a minimum trade of around $250 to activate at high leverage. The standard account enables you to work different leverages but requires a much higher initial deposit of $2000. Finally, there is the premium account which requires a still higher initial deposit to be activated and comes with more tools and services along with differing leverages.

What To Look For In A Forex Broker

Now that we have covered the essential features to look for in a broker, let us now learn what we hope not to see in a Forex broker.

  • Sniping/Hunting: These terms describe dodgy moves made by brokers to make some extra green for themselves. Naturally, no broker has readily admitted to have ever done it but no of them can be totally cleared of suspicion. The only way to pinpoint the issue is by talking to other traders who have been unfortunate enough to experience it.
  • Rigid terms on margins: If the funds you are trading with have been lent, your broker has some control over the amount of risk you stake it at. And so, the broker can buy or sell on its own terms and that can be a costly error for you. Again talk to other traders and find filter out potentially crooked brokers.

Hopefully now you have a better understanding of how to go about selecting your broker to give you a good start into the Forex market.

How We Test Forex Brokers at ForexBrokers.com

At ForexBrokers.com we understand the importance of thorough research and testing when it comes to choosing a Forex broker.

That’s why our team of experts follows a comprehensive and rigorous process to evaluate each broker and provide accurate and unbiased reviews.

Our evaluation process covers various factors including the overall offering of investments commissions and fees platform and tools research education mobile trading and trust score.

We analyze each broker’s strengths and weaknesses in these areas to give you a clear and objective picture of their services.

To ensure transparency and reliability we use extensive data points and research requirements to evaluate and compare brokers.

Our team conducts hands-on testing of trading platforms executes real trades and interacts with customer support to assess the quality of services.

We also consider user feedback and ratings alongside our own findings to form an in-depth evaluation.

By doing so we aim to provide you with the most accurate and comprehensive information to make an informed decision when choosing a Forex broker.

At ForexBrokers.com we are committed to delivering the toughest broker reviews in the industry so that you can trade with confidence and trust.

Forex Trading Strategy

Getting a forex trading account is really not far off from signing up for an equity account. There is one very real difference. And that is with a Forex account, you will need to sign an agreement that specifies that the funds you are trading with are lent to you by your broker that therefore retains the right to interfere with a trade to prevent any losses on its part.

A Basic strategy for Forex trading

Coming up with strategy for Forex trading can be a part of two kinds: technical analysis and fundamental analysis. It is worth noting that with Forex markets, technical analysis appears to be the more prevalent type of strategy used by traders. Nevertheless, it is helpful to understand both in some measurable detail regarding how they affect Forex trades.

Technical analysis

Similar to equity markets, technical analysis has a lot to do with price trends in Forex markets. However, unlike equity markets, Forex markets function 24 hours a day so some elements of the methods of technical analysis would invariably require some tweaking and adjusting. We have listed some of the most popular forms of technical analysis below.

  • Parabolic SAR
  • Fibonacci studies
  • Pivot points
  • The Elliot Waves

Such studies are combined by technical analysts to draw out sharp predictions regarding the market.

Fundamental analysis

If you have ever undertaken fundamental analysis, you might get why technical analysis is usually the more preferable strategy with Forex Trading. Fundamental analysis here is a lot more complicated but getting it right enables you to see clearly into long term trends. There are several different indicators of currency values. We have listed a few of them below.

  • Durable goods
  • Consumer Price Index
  • Non-farm Payrolls
  • Purchasing Managers Index
  • Retail sales

Aside from the aforementioned reports, other factors such as commentary from meetings can have a similar influence on the market. The meetings in question are often prompted by a need to talk about matters that deal with currency values such as inflation and interest rates. We would humbly remind the chairman of the Federal Reserve that with great power comes great responsibility.

So what is your strategy?

The truth is your strategy is bound to be as unique as you are. Pretty much any successful forex trader has been working on their trading strategy overtime and perfecting it as they go along. Experts suggest employing elements of both technical and fundamental analysis so that traders have an accurate idea of long-term happenings as well. As far as we are concerned though, there is no greater teacher here than the simple trial and error method. Only you as a trader can truly know which strategy will best serve your interests.

Just be careful to consider the following.

  1. Start off with a demo account work with it until you are confident enough to trade with real funds. That leverage potential is always intimidating enough for you to hold off yur real funds until you have gotten enough practice.
  2. Remember that facts do not care about your feelings. If you make a move based on how you feel instead what is logically valid, you just increased you chances of making a loss. Stay sober about reality and make your trades about little else except cold hard math.
  3. Always keep a watchful eye on the trends. There is no good reason to swim upstream here. Going with the trend almost always gives you a much higher success rate.

Conclusion

And that is just about all you need to know about coming up with your ideal Forex trading strategy.

How to Choose a Forex Broker

If you want to be involved in forex trading, one of the first things that you will need to do is to find yourself a broker. Now, these types of brokers are a dime of dozen. What you need to focus on is how to choose a forex broker that is right for you.

How to Choose a Forex Broker That is Right for You

By employing a broker that is compatible with your needs and expertise level, you are much likely to be able to trade more successfully. Here are some of the tips you can follow for finding your best possible option:

Is the Broker Regulated?

As mentioned, you will find no shortage of brokers on the internet. This can make deciding between the legitimate ones and the scams quite difficult. If you want to be assured that you are making the right decision, then it is best to opt for a broker that is regulated by an authoritative agency.

Each country has a regulatory association that is responsible for forex brokers within their borders. For the United States, this is the National Futures Association and the U.S. Commodity Futures Trading Commission, while in the UK it is the Financial Conduct Authority and the Prudential Regulation Authority.Australian brokers are managed by the Australian Securities and Investment Commission whereas the Swiss brokers have to be regulated by the Swiss Federal Banking Commission.

In Germany, there is the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) while France and Canada adhere to rules set by the Autorité des Marchés Financiers.

What are the Account Offerings Like?

Each broker is going to make various promises regarding the leverage and margin, commissions and spreads, as well as the minimum initial deposit. It is a good idea to make comparisons between the brokers to decide which one is making the best offerings for you.

Each broker is going to have different accounts and then ask for varying minimal deposits. It is always a good idea to stick with an account that you can afford so that you don’t run out of cash too quickly.

If the leverage that is offered is competitive, then you can significantly increase on your initial deposit. However, to avoid falling into debt, you should remember to limit how you use the leverage.

There are two ways that brokers make money – commissions and spreads. Those that are involved in commissions generally charge a certain percentage of the spread. The brokers that don’t charge commissions, though, and make money from wide spreads. As such, it is best to stick with more popular currency pairs with these type of brokers.

What Currency Pairs are Offered?

There are some currency pairs that are known as majors. These include the EUR/USD, USD/JPY, GBP/USD, and USD/CHF. If you are interested in trading with these or others that are similarly popular, you are in luck as almost every broker is offering these. If you want something more exotic, though, you will have to first ascertain that a broker that you are interested in actually offers these pairings.

What is the Trading Platform Like?

If you aren’t able to use a particular trade properly, there is a good chance that you will make numerous mistakes with your trades. As a result, you can lose a lot of money. To avoid this, you will need to find a trading platform that you are comfortable using. All of the controls and features must be easy to use and you should have no problem entering or exiting a trade. Similarly, it should offer you a lot of trading tools to choose from. Trading alerts and automated trading options can also help you a great deal when trading.

How Easy it to Deposit and Withdraw Money?

To make quick trades, you are going to need to deposit money into your account quite quickly. So, in addition to bank transfers and checks, you should also be able to place money into your account via credit cards and PayPal for faster options. Now, you should also look at the methods as well as the terms and conditions surrounding your withdrawal options. These tend to be tricky so you should ensure that you can take your money out with minimal hassle and cost to you.

This is how to choose a forex broker that is right for you. With some research and due diligence, you should be able to decide on one that is reliable as well as profitable.

Forex vs Stock Exchange

brokersWhich is best for you – Foreign Exchange or Stock Exchange? To answer that question, we must weigh both of them on the same scale and see if one can tip the balance over the other.

If you are the conventional ‘long only’ or buy-and-hold investor, you have some very good reasons for staying involved in the stock market. Statistically speaking, investors tend to get profitable returns from stocks and the taxation is sufferable.

But if it is trading you are keen on, you might want to hold your horses and take long hard look at Foreign exchange as well because it too has its own share of unique benefits.

Let us now go over some of the considerations that you would have need before choosing between them. Is it going to be Forex or Stock? Let’s find out.

1.Do you prefer fundamental analysis or technical?

If you are into assessing things in technical terms, then Forex is the better suited art form for you. On the other hand, if you are more about inherent value and subjective evaluation, your trading strategy is better suited to stock exchange. Your preferred method of analysis will come in very handy in your activities as a trader.

2.Leverage

Forex markets differ a lot here from any other kind. While in stocks you will usually  come across a ratio along the lines of 2:1, Forex can give you ludicrous ratios up to 100:1. So with Forex trading, whatever returns you get are exponential as per the given ratio of leverage. The upside is, you can make a heck of lot of green off of a very small seed. The downside is you can lose the same amount if your trade goes south.

3.Self-control

Bad trades come with the burning desire to make up for lost bounty. But can you actively control and suppress that desire when logic dictates you take leave it alone and reassess your trading strategy. You can never really know until the situation presents itself. This is an essential skill you need to make Forex trading work for you. With stocks, any potential losses are unlikely to go beyond your initial investment.

4.Bearish bets

Bearish bets with Forex trading is a rather simple matter. For instance, if you are predicting the Canadian dollar will end up higher compared to the US dollar, simply sell the Canadian dollar vs. US Dollar in the market.


Also read:

5.Number of positions

Number of currencies you can trade in a Forex market is obviously finite. In fact, as of 2013, only four of them account over three quarters of the trillions of dollar worth of trades executed each day. They are the US dollar, Euro, Japanese Yen and the English pound. Other major currencies include the Australian dollar, Swiss Franc, and Canadian dollar. A stock trader however has a veritable options list numbering in the thousands, and that is just in US.

6.News feed

Is your focus more toward a macroeconomic perspective on events or do you prefer doing some thorough searching in the sewers of whatever corporation or industry you are trading in? If you prefer the former, currency exchange should be right up your street.

7.Risk management

Your approach toward potential risks is a key factor to consider when choosing between trading stocks and trading currencies. If you are not suited to taking on risky moves, do yourself a favor and play stocks instead of Forex.

So which is it to be then? Hopefully, with the considerations listed above, you now have a clearer idea of which kind of trading would suit you best.

Best Forex Brokers

If you are new to the world of Forex trading or perhaps an experienced player who has hit a bit of a rough patch financially, you might find it helpful to reconsider your strategy in the game.

A big part of that strategy involves what broker you choose to get you into the game and equip you with the tools.

Choosing the right broker is not an exact science. While there are official ratings of brokers to consider how good their services are, what really matters is how well equipped they are to comply with your personal trading style. Before you take a look at the types of accounts on offer, bonuses, trading assets, platforms and so forth you need to find out it if the broker is licensed and regulated by a government agency. No matter how attractive the other features are, the lack of official regulation can make you a lot more vulnerable to being scammed.

Once you know the broker is legitimate, you can probe into its other features to find out how well it will stack up with your preferred financial strategies and devices. Here are our top candidates for you to consider as your ideal broker in Forex trading.

And now, onto our top three selections of the best Forex brokers you can trade with right now.

AvaTrade

Founded in 2006, AvaTrade is one of the world’s leading Forex brokers with subsidiaries in Dublin, New York, Sydney, Tokyo, Milan and more. It is a regulated Forex broker under the Central Bank of Ireland, Australia’s ASIC, Japan’s FSC, the B.V.I Financial Services Commission and is licensed by the MiFID of the European Union.

Traders get just one account to trade with which requires a minimum initial deposit of $100. Leverage stands at 1:400. Beginning from 0.9 pips, both fixed and floating spreads are available by this broker, some of the most competent spreads anywhere.

AvaTrade is one of the pioneering brokers in implementing CFD trades and trading in digital currencies making Bitcoin accessible to retail traders. Their trading platform is user-friendly and available in English, French, Spanish, Portuguese, German, Italian, Chinese, Japanese, Taiwanese, Russian and Arabic.

The types of orders a trader can make on the AvaTrade platform include Entry Stops and Trailing Stops, Stop Loss orders, Limit orders, Entry Limits and Market orders. More advanced orders like IF Done orders and One Cancels Other orders can also be made.

Conclusion

These are currently some of the most reputed and highly rated Forex brokers you can select right now, but of course, the really important thing to know about any of them is that they are compliant with your own personal tactics and strategies as a Forex trader.

How We Test and Review Forex Brokers

When evaluating forex brokers we at ForexBrokers.com employ a thorough and objective review process to ensure that we provide accurate and reliable information to our readers.

Our team of experts thoroughly researches each broker taking into consideration factors such as the offering of investments commissions and fees platform and tools research education mobile trading and trust score.

We also employ advanced techniques such as Latent Semantic Indexing (LSI) and Natural Language Processing (NLP) to analyze the content and structure of each broker’s website ensuring that our reviews are comprehensive and reflective of their offerings.

Additionally we consider the experience and expertise of industry professionals such as Blain Reinkensmeyer Steven Hatzakis and John Bringans to provide valuable insights and recommendations.

Our goal is to provide traders with unbiased and accurate information so that they can make informed decisions when choosing a forex broker that suits their needs and investment style.

By considering the regulatory compliance trading platforms tools and educational resources of each broker we aim to assist traders in finding the best forex broker for their trading journey.

US Forex Brokers

us forex brokers

Picking the right US Forex Broker is very important, because there are big differences between the platforms.

There aren’t many Forex brokers available to traders from the United States (not licensed and regulated ones at least).

Regulated US Forex Brokers

Why are there so few regulated forex brokers? It’s because the US imposes strict regulations and laws on its finance industry. This provides financial security to all of its citizens.

The advantage of these strict regulations is that you can feel safe with the US brokers that are regulated and licensed.

Rank Broker Min. Deposit Regulated Trust Score Review
1
review $50 YES 99
TRADE NOW

A variety of trading forms have provided the need for establishing different governing bodies that offer licenses and regulations.

USA Forex Brokers

There are many trading forms operating in the United States and Forex trading is one of the most popular.

It is in fact the leading form of online trading internationally.

The U.S is fairly limited compared to many other countries, a testament to the rigorous standard upheld by prevailing government agencies.

The Primary authorities in charge of overseeing all Forex trading activities in the United States are:

  • the National Futures Association or NFA
  • the Commodities Futures Trading Commission or CFTC.

The key thing to understand about these institutions is that their regulations are not based so much off legal procedures so much as ethical ones for the online trading community.

Forex Brokers That Accept US Traders

Here are some of the top Forex Brokers currently available for traders based in the United States.

1. Forex.com

Forex.com has been around since 1999 and is run by Gain Capital Holdings. It is one of the highest rated Forex brokers anywhere in the world and it meets the licensing and regulatory protocols under the jurisdictions of seven government authorities including the NFA, CFTC, FCA and ASIC.

At Forex.com the types of accounts available to traders are a standard trading account and an Active trader account.

Where the standard trading account requires minimum of $50 worth of an initial deposit to be activated, the Active Trader account requires $20,000. The added benefit of the latter is that traders are supplied with a so called ‘Relationship Manager’ to further assist their trading activities.

There is also a demo account available for all traders with an initial deposit of $50,000.

When it comes to trading costs, spreads and commissions are two very important factors a trader must consider when choosing a Forex broker to work with.

  • For currency pairs such as EUR/USD and USD/JPY, the usual floating spread charged by Forex.com is 1.7 pips.
  • The GBP/USD pair, it is normally 2.1 pips.
  • Active trader account, have a lower spread. For instance for EUR/USD currency pair, it can go down to 0.4 pips.

The trading platform is another important feature offered by a broker. The one offered by forex.com is simple and easy to operate with virtually no room for confusion. Trading options are available in binary, spot forex and CFDs in over 3200 markets.

The main criticisms with this broker is that it offers no bonuses or promotions and variety of available accounts is limited to just two.

2. FXCM

FXCM or Forex Capital Markets is one of the first brokers to implement online trade. It was started in 1999 and is based in the United States. Its headquarters are situated in New York and subsidiaries in the United Kingdom, Australia, France and Italy. It is licensed and regulated by the authorities of each jurisdiction that it operates in, most notably the FCA, NFA, and ASIC.

A diverse range of account types are offered by FXCM to suit novice traders as well as experienced traders.

The standard account requires an initial deposit of $5000 to be activated while the Active Trader account requires $25,000. A mini-account is available as well and requires a minimum deposit of $50. It offers 50:1 leverage for traders based in the United States and 1:200 for traders based overseas. Training accounts are also available at FXCM for 30 days. There are also two types of demo accounts: the standard demo account is available with $50,000 and the mini-demo account comes with $2000. The trading platform used on all these accounts is exactly the same. However, you do need a separate password and ID to access each one.

When it comes to trading platforms, FXCM offers the widely used MT4 platform. It is quite easy to navigate and can be customized to your individual preferences. The available assets to trade include day trading, trailing stop/limit orders and entry orders, and stop loss and take profit.

Customer support from FXCM is available 24/7 in over 20 languages inclusive of weekends and other days when the market is closed. As a trader, you can get in touch over the phone, through email or online chat.

3. Nadex

Nadex is part of the global financial services provider, IG which is worth over 2.2 billion pounds and based in Chicago.

It is a derivatives exchange regulated by the CFTC and only offers assets with limited risks. Its design is mostly in the interests of retail traders. Although, primarily a binary options broker, Nadex offers traders access to financial markets including Forex, commodities, stock indices and crypto currency bitcoins with over 2400 binary option contracts on a daily basis.

When it comes to accounts, traders can maintain just one completely free until they place their first trade.

To continue thereby would require an initial deposit of $250. Apart from that, the account must also hold enough capital to pay off any loss that may result from a trading position. Fortunately, a demo account is available with a handsome deposit of $25,000.

The contracts on offer at Nadex can last anywhere from 5 minutes to a week so traders have numerous trading options to consider as well as being able close off a position before its designated time of expiry.

Bonuses are available here as well. The offer from Nadex rather peculiar. Called the Free Holiday Bonus, it involves traders getting full days where they can trade without being charged with any exchange fees.

Nadex offers support to its customers via phone and email 24 hours a day starting from 6 pm on Sunday to 4:15 pm on Friday.

Pick One Of The Top Rated US Forex Brokers

These Forex brokers are currently some of the best ones operating in the United States as well as internationally. However, as a trader what is most important to consider when choosing which one to trade with is not their popularity so much as how well they can suit your trading style.