Real Money Forex Trading
Is Forex Trading Profitable
What Is Forex Trading

With an average daily turnover of more than $5.1 trillion, the foreign exchange market is the largest financial market in the world. Available to both institutional and retail traders, it gives them the opportunity to trade a huge variety of currency pairs and to make substantial profits while speculating on economic events and the relative strength of currencies. To enter this exciting business field, however, retail traders need to sign up with an online Forex broker and open a live, real money account.

Most Forex brokers offer two main types of accounts – demo accounts and real money accounts. Demo accounts are mostly used to try out different strategies and tactics or to get familiar with the trading platform used by the broker. On the other hand, real money accounts allow you to really participate in the Forex market. When you open a real money account, you will have to deposit money in it in order to be able to start making trades.

Many people like trading foreign currencies on the foreign exchange (forex) market because it requires the least amount of capital to start day trading.Forex trades 24 hours a day during the week and offers a lot of profit potential due to the leverage provided by forex brokers. The normal trend was to sign up with a broker and make some deposits in your real account before you can start trading the forex market, but things has changed and broker have devised new ways of getting new clients every day. Once you sign up with the broker, you get real money in your account with which you can trade the forex market with.

While demo accounts and simulated trading do not involve any actual money, trading from a real money account without the proper knowledge and strategy poses a real financial risk. This is why prospective traders who wish to enter the world of Forex should be aware of the dangers they will face once they start trading with their own money.

When to Open a Real Money Forex Account

If you have never traded on the Forex market before it is a good idea to start with a demo account until you get familiar with the market and the trading platform your broker offers. Of course, many novices decide to directly start trading with real money and in most cases, they end up losing their initial investment. Trading currencies is difficult and requires knowledge, skill, and experience – after all, there are more losers in the world of Forex than there are winners.

This is why it is essential to know when you are ready to open a live account – until you develop a solid, reliable and profitable system for trading, you should stick to practicing with a demo account. Some traders claim a couple of weeks are sufficient for beginners to learn the mechanics of currency trading. Others believe that this “pretend” trading should continue for anything between 3 and 12 months.

The truth is that some traders never become successful even if they practice for years, whereas some people find it easy to understand the inner workings of the foreign exchange market. Those who want to succeed in this field in the long term should know that if they are not capable of making profitable trades with a demo account, they will certainly lose their investment once real money and emotions are involved.

Things to Consider When Signing Up

Once traders decide to transition from demo accounts to live trading with real money, they need to take a few things into account – what type of trading account they will need, what payment options they have, and how to protect themselves from financial ruin. Depending on the Forex broker they choose to sign up with, they will be offered different trading conditions, although most real money accounts are pretty similar to each other.

It is always a good idea to read the broker’s terms and conditions and make research into the origins of the firm, whether it is regulated, and its overall reputation. This is an essential step, especially with fairly new Forex brokerages. Many traders have been scammed in the past, so it is advisable to try and stick with reputable brokers who have proven their reliability and trustworthiness over the years.

Account Types

As we have mentioned above, Forex trading can be exceptionally exciting and profitable but to be successful, individual traders need to compete with large banks, hedge funds, and other institutional traders. For this, they need to select the right type of account for themselves since this will directly affect the volumes they will be able to trade, the spreads they will pay, and the level of leverage they will be able to take advantage of.

Based on the minimum and maximum requirements for trading lots, there may be many different account types – standard, mini, micro or VIP accounts, professional accounts, etc. Brokers have different tiered programs for their clients but usually, most traders start with the smallest possible account. This allows them to invest relatively small amounts of money and make small-sized trades.

The different types of accounts have different requirements regarding the initial capital held by the trader, the margin percentage, the minimum required deposit, etc. They also affect the pricing – smaller-sized accounts usually come with higher spreads even on major currency pairs

Banking

Another important aspect of real money accounts is banking – what payment options are available, how much the minimum deposit is, etc. In order to invest in a real money Forex account, traders need to check the payment methods accepted by the broker.

Most brokers work with bank transfers, credit cards, and digital wallets. Popular banking solutions include credit and debit cards by leading brands such as Amex, Visa, and Mastercard or e-wallets, including Skrill (formerly MoneyBookers), Neteller, and PayPal. Some brokers’ websites also process Bitcoin deposits and withdrawals. Various other cryptocurrencies are gaining popularity, as well.

However, not all payment methods would support withdrawals, which is why traders should always check the deposit and withdrawal options available. In addition, Forex traders need to check the minimum deposit amount that is required to open a real money trading account. It will vary, depending on the particular broker and the type of account one chooses to register. Beginner traders are advised to start with small deposits of $10 or $50 and gradually advance to higher-tier accounts that require greater minimum deposits.

Pricing

Using the services of a professional Forex broker is not free, although registering a standard real money account is free of charge. Brokers used to impose fees on every trade but with the emergence of the Internet and online Forex brokers, firms began offering competitive pricing plans to new clients. One of these changes was the removal of these fees – this is specific to currency trading though, there are still different fees when it comes to stock trading, for instance.

Nowadays, most brokers make a profit from Forex trades by making traders pay the spread – the spread is simply the difference in the price asked by the seller and the price offered by the buyer. Sometimes referred to as the bid/ask spread, it is displayed in pips and may range between 0.0 pips for institutional traders to more than 20 pips for trading exotic pairs by retail clients.

Pips (short for point in percentage) are the smallest price movements that an exchange rate can make for a particular currency pair. A pip is usually $0.0001 for major pairs involving the US dollar – if the EUR/USD moves from 1.1050 to 1.1052, for example, then this is a rise in the value of 2 pips. As you can see, paying 3 pips for a trade does not seem to be very costly but it may affect one’s profits significantly in the long term.

Leverage

Another thing traders must keep in mind about real money Forex accounts is that they will be using leverage, which is among the most attractive and risky aspects of currency trading. In short, brokers offer leverage to their clients by allowing them to trade with borrowed funds. This money on credit is used to control larger volumes than one could afford normally with their own capital alone. For instance, if a trader has a capital of $100 and is offered 10:1 leverage, he or she could conduct a trade worth $1,000.

Traders often see this as a great opportunity to make a lot of money but they risk losing their entire investment in just one or two trades. Although leverage may multiply the profits from a successful transaction, it may also multiply one’s losses. This is why traders should use this powerful tool cautiously after determining the proper leverage level that suits the

Real Money Trading Forex