In the past, Forex was supposedly off limits for individual investors; Forex was something to be exploited only by large multinationals, banks, and private hedge funds. However the online trading revolution has brought Forex trading within the reach of retail traders, and individual investors. A lot of interest has been generated in internet based currency trading, and new investors are spending their money in the currency exchange markets and building their Forex portfolio.
For the first time investor, it is wise to look around for the most suitable Forex brokerage that will comply with the personal needs of that particular investor. Forex brokerage firms offering online Forex trading platforms might look inviting at first, but make sure that you are aware of your limitations in terms of capital outlay and spot trading capacity. Choosing a Forex brokerage that offers low spreads, and high leverage levels is vital. As a first time investor, you should avoid brokers with strict margin rules and who take a large chunk of the spread. When you are offered low spreads, a spread being the difference between the ask and bid prices, you stand a chance of gaining high profits, as opposed to the broker making profits off the spread.
It is of paramount importance that you try trading via a demo account, if the brokerage does not offer this do not choose it for your trading. There is something called the Easy Forex, which allows people to start trading with small position amounts, as low as USD 25, and where stop losses are standard. In selecting the right trading brokerage firm, make sure that you are aware of the pips spread, and the trailing stops and the guaranteed stops that are available for use. Look for margin provided, which should usually fall between 1-4%, amount required to open an account, spreads for the currency pair you want to trade in, and total fees that you have to pay to the brokerage for the transactions you make via your broker.
It is wise to opt for a broker that does not decide how much risk to take automatically, without your referral. When you are trading with money that is borrowed, this might cause possible losses for you. Even if you have enough cash to liquidate, the broker should not buy or sell at their discretion. You might look at Forex Yard to see the pips spread, and Forex Web Trader in case you want a mobile trading platform. Ultimately, choosing the trading platform will depend on your individual needs, but taking the aforementioned steps will get you the most suitable brokerage services.
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