When you land in a new country and exchange your Dollars for the local currency, you are practically trading Forex. However, as you would have figured out by now, that is not a very practical way to trade in the market with large quantities of funds.
The good news is that as trading foreign exchange became very popular over the last decade, it has encouraged a large number of online brokers to offer a low cost solution to trading currencies over the Internet.
In order to access the global foreign exchange market and start trading Forex, the first thing you need to do is open a brokerage account with a Forex broker, who will provide you with the software and connect you to global banks, dealers, and other liquidity providers.
As there are literally thousands of Forex brokers offering their service, it is a rather difficult and time consuming task to pick the right broker. In order to make it easier for our readers, we have spent a significant time researching about the best Forex brokers for the Australian traders. You can take a look at our shortlist of top Forex brokers in the review section and pick the right broker.
Trade Forex in 3 Easy Steps:
Step # 1: Open a Live Trading Account
Opening a Live account is easy and you would only need to provide your personal details, such as verify your address and identify in order to open an account.
Once you select a Forex broker and open a live account, the broker will provide you with an account number and login details to access your brokerage account.
Step # 2: Access Your Brokerage Account
Most modern Forex brokers offer web based trading platforms. But, professional traders often prefer to install the trading platform on their computer for ease of access and reliability.
Depending on the type of trading platform offered by your Forex broker, you would have to enter your personal account number and password to login to your account, either via a web browser or with the provided software.
Step # 3: Learn How to Place and Modify Orders
Most Forex brokers offer knowledge banks that provide the details regarding how to operate their trading platform. But, you will find that across all the major trading platforms, trading is done with some basic features and it takes few minutes to understand the commands.
For example, on the most popular trading platform, MetaTrader 4, you can either place a market order or a pending order with your Forex broker.
With market orders, your order is filled by the broker the market price. With pending orders, you can place a “standing order” with your broker to fill your order either at a higher or lower price compared to the current market price. These two types of orders are known as a STOP order and LIMIT order, respectively.
If you place a buy order and the price goes up, you would make a profit. By contrast, if you place a sell order and the price goes down, you would also make a profit. You can also set a STOP LOSS order to minimize the risks and a TAKE PROFIT order to get out of the market with a profit automatically.
Moreover, all Forex brokers will allow you to modify these “standing orders” at any time during the official trading hours.
We recommend that you open a “demo account” with your Forex broker and play around with the trading platform and familiarize yourself with trading platform before placing any Live orders.
Trading Forex is easy, but learning to trade Forex profitability may take some time. Having said that, there are numerous profitable trading strategies available for FREE on the Internet. You can also join several dedicated Forex forums to interact with other traders and learn from their experiences.
Now that you know how to trade Forex, feel free to share your own experience in the comments section below!