Forex Trading Accounts

Did you know that over the last few years, the total value of the forex market has grown to over $1.4 trillion? That’s an astronomical sum, even in global financial terms. What’s most interesting about the forex market, however, isn’t that it’s immensely valuable or loaded with size, but that it’s accessible to any investor with the time, knowledge, and skill to make it work successfully.

Unlike the stock market, which leaps around all the time and is packed with expensive barriers to entry, the forex market truly is universally accessible. With low minimum deposits and a range of low to moderate-value currencies to purchase and invest in, it’s a fantastic place to begin trading as a new investor, and an ideal place to hone your skills as a mid to high-volume day trading investor.

In this brief guide, we’ll look at the in’s and out’s of entering the forex industry. We’ll see how easy it can be to open a forex account, how simple it is to complete your first trades, and the exact facts you need to know before starting out. Ready to start investing? Gather your bankroll and jump right in – it’s going to be a lucrative, financially exciting, and very mathematically-focused ride.

Before you open a forex account, it’s important that you understand both the risks of trading and the best ways to manage your income and expenses as a trader. Assuming you go on to relative success in forex trading, remember that as an individual you may be liable for a large tax bill. Due to this, a great deal of forex traders incorporate an LLC to assist with their taxes while working as traders.

This plays into the forms given out by most online forex brokerages – most of which will ask you to declare your LLC or S-Corp business as part of the application process. If you’d like to trade as your own individual name, that’s fine. However, remember that it’s worth incorporating a business if over time you increase your trading volume, and thus send and receive greater amounts of money.

Then there’s the account type – would you like a managed account or a non-managed clients-only trading account? The first is a relatively passive investment account, one that’s managed by a CTA instead of yourself. These people – commodity trading advisors – can manage your account instead of you, although the vast majority of traders instead opt to use their own non-managed accounts.

Beyond this, there’s a final requirement set out by many forex trading platforms – disclosure of the fact that you are or aren’t trading using an automated system. Many traders now opt to use software in order to track and predict their trades. This software sends out automated requests to a brokerage firm online – ticking this box allows the brokerage to know that the requests are being automated.

This whole process can seem somewhat confusing, particularly for beginners. While experienced forex traders may balk at the idea of a sign-up process being difficult, it’s important to remember that many of the terms used in forex are confusing and unfamiliar for new traders. To assist with signing up for a forex account, many online brokers now offer live chat or phone-based support.

Depending on your country, you may be required to submit your application using an offline paper-based form. This is particularly true for non-US and non-EU residents, who may fall under different financial regulations than those in other countries. In some cases, this form needs to be followed by documentation from a bank or forex partner in that country. This is uncommon, albeit still possible.

This is all fine, assuming your a trader with money to invest and risk to manage. But what if you’re new to the game – so new, in fact, that you’re unable to spend any money on forex trading? To help you with your trading as a beginner, many forex brokerages offer ‘training accounts.’ These type of accounts have all the functionality of a normal account, without the financial requirements.

They also lack the financial benefits – every trade completed within one of these accounts is done using fake – imaginary – money. The purpose of this is to allow new traders to get familiar with a trading interface, or trading as a whole. These accounts take mere minutes to set up, and over time can be tweaked into a proper ‘real money’ forex trading account, at the wish of the account holder.

Forex accounts can be opened at a variety of different trading platforms and through a wide range of different brokerages. Generally speaking, most offer the same basic benefits, although it’s worth reading up on the specifics of your preferred platform. Many offer deposit bonuses, and some will even offer phone-based support and training for their traders, provided you reach a volume level.

As scary, tough, and difficult as forex trading can seem, it’s a relatively simple and rewarding type of business with the right platform and people on your side. Invest your time in forex and you can build up a sizable fortune. It only takes one step to begin this journey, and that step is creating your forex account. Get out there, get busy researching, get busy trading, and start doing likewise.