What is a forex account
Foreign exchange (forex) trading is widely advertised as a quick and easy way to make a large amount of money. Individuals who wish to start forex trading are told that they should first open a forex account. Since most of them are not familiar with forex they often ask, What is a forex account? A forex account is an online platform account used for holding the forex currencies and trading them. A trader will usually open a forex account, deposit money in the account using the currency of the home country and then sell or buy currency pairs. Though every trade is hoping to make a profit, the majority of forex traders are losing money. On average, a forex account is used only for four months. Though forex trading is not a scam, making money using currency trading is fairly difficult and requires a lot of expertise.
Opening a forex trading account
Video instructions on how to open HF account:
Step 1: Go to Hotforex registration page :
Ste 2: Fill all fields and wait for a confirmation email.
Online forex trading has grown rapidly and this has made it easier to open a forex account online. The process of opening a forex account is similar to opening a bank account. The new trader should first find a suitable forex broker. Some brokerages for stock market trading, investing, also offer a forex account while some brokers are only specializing in forex. While opening the forex account, some questions on financial knowledge, trading plans may be asked. ID proof is required, along with a minimum deposit, required by the broker. After this, the account holder can start trading.
In some cases, the forex broker may accept debit or credit card details instead of the initial cash deposit. However, this is not recommended for new traders who do not have cash. The new traders are likely to make losses, and if they do not have cash, they will have to use their credit card, which has a very high-interest rate.
When compared to trading in the stock market, forex trading is considered riskier because there are very few regulations, and in case of specific types of trading there are no regulations at all. Hence traders who do not check the reputation of the forex broker who they have selected, may get defrauded and lose their money. Some tips for avoiding this problem are
– trading with a general brokerage dealing in the stock market in the United States, and hence regulated by the US Securities & exchange commission
– traders should be very careful if they are interested in choosing a brokerage specializing in Forex only. It is recommended that they open the account only with a US-based broker, who is a member of the National Futures Association (NFA). NFA has an information center for checking background affiliation. This center can be used for verifying a brokerage and compliance-related record.
One of the most reputed Forex brokers is Hotforex worldwide except the USA and in USA – Forex Capital markets, FXCM which offers a free account for practice, so trading can try different trades without risking the capital. The TDAmeritrade division, Thinkorswim, and CitiFXPRO, affiliated with Citibank are some of the other reputed Forex brokers in the USA. Before finalizing a broker, it is advisable to compare the commission rates charged since these transaction charges determine the profit made to a large extent while trading in forex.