Forex Funds Tips For First Time Traders
Trading in Forex funds means trading on the world's largest trading market. The Forex, or foreign exchange (FX) market, trades in foreign currencies and is in many ways similar to trading in the equities market. If you are considering trading in the Forex market or starting with a Forex hedge fund, here are some simple tips for starting Forex fund trading.
You will first have to choose a broker and there are some things to look for when choosing one. The brokers on the Forex market do not charge commissions for their work, but make money in "pips", meaning the difference between a currency's selling and buying prices. Look out for the broker's spread, which is calculated in the pips, and the lower the broker's spread is the better for you.
Make sure that the broker you choose is regulated with the CFTC (Commodity Futures Trading Commission) and if the broker is registered with the FCM (Futures Commission Merchant). Brokers also usually have links to lending institutions or banks because of the large amounts of money involved, so make sure your chosen broker is tied to a reputable and reliable financial institution.
Before making a decision, request a trial on the trading platforms the broker offers. The brokers on the Forex market have a range of trading platforms that usually give you a chance to try trading on the market with a free demo account. These platforms feature all the tools you need, and you can try trading in with real time data, charts and tools for technical analysis. You can try trading with Forex hedge funds or find out how Forex managed funds work, and you should be able to have a free test run with your broker.
You can also choose from several account types. A mini account has a minimum trading amount and has a high leverage amount, the standard account allows for a variety of leverages but you will need to invest more than for a mini account. A premium account is available if you have a large amount of capital to invest, and it offers the largest variety of leverages and services. The type of account you choose depends on the amount of money you can invest.
The Forex market is open around the clock and you can trade from wherever you are in the world. It also involves high risks, so make sure you understand what your financial limits are before starting trading in Forex funds.
Posted on: 9/17/2016