Thanks to the websites of specialized brokers, trading on the foreign exchange market is as simple as buying or selling stocks on the stock exchange. Ultra-modern trading platforms allow you to place your orders on stocks, trackers, futures or Forex.
Forex is lately particularly popular among ordinary people. That’s because of its accessibility and the fact that you can learn its ins and outs pretty quickly.
But first of all, you have to understand what the Forex market is, the small name given to the international currency market.
In 2016, all the players involved in Forex traded an average of 5.100 billion dollars per day, including 1.650 billion dollars on the spot market, in other words, in cash. We meet there the central banks, the big commercial banks, multinational companies, hedge funds… but also, for some years now, brokers for private investors.
Open to individuals
The first Forex brokers had the brilliant idea of connecting individuals to Forex.
With the development of the Internet and the increase in connection speeds, a simple computer connected to the web and equipped with a trading platform was enough to invest in the currency market. Provided, of course, that you have opened an account with an intermediary.
In barely ten years, the technological environment, in particular allowing access to Forex, has improved considerably. Not only are the trading platforms much more fluid, but they have also been adapted to smartphones and tablets.
But what is a trading platform? To put it simply, it is an interface accessible from a digital terminal (PC, Mac, Smartphone, tablet, etc.) that is opened from executable software, an application or a website, and which displays live prices, charts, trading account status, news feeds… and of course order windows.
Choose the platform, namely a broker that complies with the regulations imposed by financial authorities in your country. If you want to know if the broker is regulated and offers all necessary trading features, make sure to read Forex broker reviews such as Trader House review.
Choose a broker that offers both stock market and Forex.
Ideally, choose a broker who offers both to invest on the stock market but also on Forex. This allows you to move from one market to another depending on the volatility of different assets.
Indeed, it sometimes happens that investing in the stock market is quite boring when the price variations are too low. In this case, a round trip on the euro dollar with a little leverage can get your adrenaline pumping.
Currency or equity trading with leverage requires good knowledge of how the markets work and involves some risks that you need to know how to measure.
We must also mention margin accounts and leverage. To trade Forex directly in cash or via CFDs, you must open a margin account.
You deposit a certain amount of money there, which will serve as a guarantee with the broker. This sum is actually deposited in a so-called “segregated” account, in other words, in an account opened with a traditional banking establishment.