eToro

Forex Trading Account

Table of contents

Intro to the Forex market

The Forex market is a very liquid market for traders and an indispensable tool for businesses and individuals doing business in foreign countries. Through experienced forex currency trading, traders can amass large profits in speculative portfolios or hedge business transactions transacted in foreign currencies.

What is Forex?

Forex Trading AccountThe Forex market, unlike other stock or commodity markets, is decentralized and based on an electronic network of banks and brokers around the globe. Forex is in operation around the clock from Sunday night to Friday 5:00 PM ET. Trading opens in Syndey and moves around the world to Tokyo, and New York. Trades in the Majors are usually very liquid. When macroeconomic news happens, the global currency market is there to adjust.

Leveraged Forex Trading

Forex Currency Trading is a highly leveraged form of trading. Leverage can work in the favor of the trader in that you don’t need a lot of capital to begin trading large sums of money. However, with high leverage comes substantial risk; it is possible in some types of Foreign Exchange accounts to lose more than the amount you placed in your trading account.

Forex Risk Controls

As a trader of highly leveraged investment vehicles like foreign exchange currency pairs, it is extremely important to have a clear strategy for risk control to avoid a catastrophic loss of capital. This is because tiny movements in currency values, down to five decimal places or more, can be leveraged into profits of much larger dollar amounts. While this may be a trader’s dream, this can only happen (consistently, at least) by limiting position size and using stops.

Open a Forex Trading Account

It is possible to open a Forex currency trading account for as little as $250, however experts recommend that you fund a much larger amount than that to make risk control easier to achieve. There are a number of good Forex currency trading Introducing Brokers that have excellent customer service, which we can recommend here.