Forex is short for foreign exchange and it refers to the financial trade of foreign currencies. Today forex is by far the largest financial market in the world with an average daily turnover of over $3 trillion. This means that the forex market provides virtually infinite liquidity and is too huge to ever be cornered by any one trading body. In forex, traders use one currency to buy another currency, or sell one currency for another currency. Either way, a forex trade always consists of two transactions: the buying of one currency and the selling of another currency. For this reason forex trading is always relative and can be no such thing as a forex market crash.

Forex is a 24 hour market that provides profit opportunities in most market conditions. Unlike other financial markets, traders can profit whether the forex market is rising or falling since the values of currencies are always relative to other currencies. The forex market also gives you the opportunity to leverage your trades so you can make trades without a huge investment capital. The market circles around give or take 8 major currencies, so it’s not too difficult to analyze due to the small amount of investment instruments. Since the stock market crash in 2008, the forex market has also experienced some volatility. However, volatility in the forex market is actually a good thing since it presents more profit opportunity, although it may also be riskier to trade during these market conditions.

That depends on your forex provider. Some brokers require you to provide documentation to open any account at all, some require documentation before you are able to fund your account and some don’t require any at all as long as you’re not depositing too large a sum. All forex brokers however, require documents before cashing out. With our sponsor platform eToro for example, you can open a demo account and a real trading account without providing any documents at all.

A lot of online forex providers today enable traders to trade virtual currencies with live rates on a demo version of their platform. These demo platforms are a fantastic opportunity to: a) Get to know the platform you’re considering trading with; b) Practice forex trading if you’re not sure of your forex skills; c) Test out forex strategies and theories without wasting any of your real account balance. Some forex platforms provide a limited trial period of the demo platform or a limited amount of virtual money. The general rule is – the more opportunity to trade with the demo platform, the better. You never know when you might need it.

This used to be the consensus in the forex world until a few years ago. Since then forex has been democratized and stripped to basics to provide novice traders the opportunity to pick up the ropes as they went along. Forex platforms still provide advanced charting and analysis tools that would probably take a while to understand, but some platforms offer easily comprehensible trade visualizations, free forex guides, tutorials, personal forex tutors and more, just to accommodate traders with no formal forex knowledge. Given a good platform intended for novices, even a complete novice will be able to make their first trade confidently within an hour of registration.

With many platforms today providing the option of trading in micro lots, the minimum amount needed to open a forex trade can go as low as $2.5. This however doesn’t mean that you can open a forex account with such a low amount. Forex accounts in the low range usually vary between $50 and $100. With our sponsor broker RetailFX, for example, you can open an account with as little as $50. You should however find out about any special offers your broker is offering for your first deposit because a lot of the time it might be worth it to deposit more in order to get a bigger bonus. You might also consider the minimum amount of investment per trade offered by your broker, since depositing $50 with a minimum investment of $25 per trade (the minimum investment for a mini lot), doesn’t give you much of a chance for profit.

That depends on the funding means that you have at your disposal. Most forex brokers allow you to fund your account by major credit cards, wire transfer, and PayPal. Some also provide less common methods such as Neteller, Moneybookers, Western Union and MoneyGram. In any case, forex brokers want your business and can usually find some way or other for you to fund your account.

Forex trading is risky since you’re putting your money in a live market, however as far as the money in your account is concerned, it’s perfectly safe. Today’s encryption methods make sure that no one can access your account or your account information. Just make sure that your broker is using proper SSL encryption technology and that they’re a reputable broker. It doesn’t take a lot of time to look up opinions and reviews about a particular broker, but it can save you from falling into a forex scam and losing all your money.

Choosing your leverage depends on your trading strategy. Whether you’re trading in the short term or in the long term, whether you’re confident about your trade or not, whether you like to trade safely or take risks, all these factors influence your choice of leverage. The main thing to remember is: the higher your leverage, the higher your risk.

Most brokers don’t charge a commission for forex trades. Instead they put spreads between the ask price and the bid price for a currency pair. These spreads is how forex brokers make money. Naturally, as a forex trader you want to find a broker with the lowest spreads on the currency pairs you’re most likely to trade. Spreads are measured in pips (percentage in points), which are the numbers of the fourth digit to the right of the decimal point in a regular price quote (first digit to the right of the decimal point for the Yen). Spreads vary from broker to broker and can go as low as 1 pip to as high as 15 pips on the major currency pairs. Customarily, the more exotic or rare a currency pair is, the bigger the spread.

You can always leave a position open overnight, although not all brokers allow you to keep the position open over the weekend. This is called a rollover. Some brokers charge overnight and weekend rollover commissions, some charge only for the weekend rollover, some don’t charge any commission at all. Obviously you’d want to find the broker with the least rollover commissions.

Recognizing a forex scam is usually quite easy. Since it takes a lot of effort and investment to obtain a forex license, to build a forex site and to develop a forex trading platform, it becomes obvious when there’s something not quite right with the broker. Always look for a demo platform so you can see that the broker actually has one, look at the professionalism of the site and make sure that the broker is licensed by an official trading authority. It also doesn’t hurt to read web reviews, however keep in mind that there will always be at least one blogger claiming that the broker you’re looking up is a forex scam due to personal reasons.

In principle yes, any exchange of one currency for another is considered a forex trade. In the online reality of today, however, there are eight major currencies traded against each other. These currencies are the US Dollar, the Euro, the British Pound Sterling, the Yen, the Swiss Franc, the Canadian Dollar, the Australian Dollar, and the New Zealand Dollar. Some forex brokers provide the opportunity to trade other more exotic currencies such as the South African Rand, the Swedish Krona, the Brazilian Real and others, but these are much less common, come with massive spreads and don’t have as much information available about them.

There are several criteria for judging the quality of a forex broker, and these differ according to your trading tactic and style. The main criteria are low spreads, a wide range of leverages, no commissions and accurate trade execution. The individual criteria may include whether the trading software provided by the broker suits you, whether you get good account benefits for larger accounts, the availability of personal account managers, and whether the broker provides the information you need for trading.

Several forex platforms today include community features in their software as a means of keeping up with the communal nature of web 2.0. These can not only help you pass the time while you’re trading, but can give you an opportunity to learn other traders’ trading secret, to learn new information about the market and to get a sense of investor sentiment. Some platforms even provide community based tools that allow you to see the currencies traded by the top profiting traders, allowing you to imitate and analyze their winning strategy.

Investing in forex is very possible, and can be a great and increasingly popular way to diversify an investment portfolio. All you need is to find a forex broker that offers low leverage options so as to minimize the risk of your long term investment.

First of all you can find various live streams of forex data on the widget page of this website. Secondly, your forex provider probably has many available types of forex info. If you’re not satisfied you can also search forex blogs and forums, or go to other forex providers’ websites where you can often find free live forex data.

Most forex brokers require to receive a copy of your I.D. and, if you deposited by credit card, a copy of your credit card.

That depends on your forex provider. Some platforms place an automatic stop loss order that prevents you from losing more than your investment on any one trade. Other brokers require that you maintain a certain account margin in order to make sure that you can cover any extra losses on your trades. In any case, even if your broker doesn’t have an automatic stop loss order, you can always place one yourself to prevent you from suffering further losses than necessary.

Most professional traders check up on what’s happening in the market at least on a daily basis. Ultimately it’s your choice. The forex market has a rather limited number of trading instruments, so even if you haven’t been watching the market closely for a long period of time, it’s quite easy to catch up on everything you’ve missed and to keep up to date on current trends and forex events.