Posted by forex at 5:14 AM
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1. Select an online forex broker. There is a large number of brokers to choose from so compare the features of several. Important considerations are the deposit required to open an account, sizes of trades allowed, trading spreads and the brokers trading system. Some offer downloadable software, and others are web-based platforms.
2. Apply for a trading account, and fund it with your starting money for trading. For the new forex trader, the broker should allow 10,000 unit trade sizes and a minimum account balance of $250 to $500.
3. Familazarize yourself with the broker's trading platform. Forex trading is done with currency pairs and their relative value. Popular pairs are the EUR/USD for the euro and U.S. Dollar, USD/JPY for U.S. dollar and Japanese yen and GBP/USD for British pound and U.S. dollar. Each pair will have a bid and an ask price that changes with the market quotes. You sell at the bid and buy at the ask.
4. Decide which currency pair you want to trade and what direction you think it will move. Forex traders analyze global financial news and currency technical factors to predict currency rates. Forex trading uses the same currency pair to trade either currency in either direction. For example, using the EUR/USD pair, if you think the euro will go up, use a buy order, if you think the dollar will go up, use a sell order.
5. Place the forex order by selecting Bid/Sell or Ask/Buy on the trading screen. You will get a confirmation box with the size of the order, the margin requirement and the current price. Click on submit or confirm to place the order. The margin requirement is how much cash you need in your account to place the order.