Forex Trading For Beginners & Dummies

67% of all retail investor accounts lose money when trading CFDs with this provider.

Founded in 2006 and headquartered in Dublin, Ireland, AvaTrade is a privately held CFD and forex broker. Its offering includes a wide variety of tradable instruments spanning across asset classes such as commodities, forex, stocks, cryptocurrencies and indices. The platform is perfect for novice investors who are trying to gain insight into the world of CFD and forex trading. AvaTrade provides a default interface via WebTrader as well as both Metatrader 4 and 5 for traders wanting to execute traditional technical or fundamental trading strategies.

AvaTrade offers over 1250 financial instruments spread across ETFs, bonds, stocks, commodities, indices, forex, options and cryptocurrencies. Spread betting is available for UK and Ireland based traders. You can also access third-party platforms for social/copy trading with ZuluTrade, DupliTrade, MQL5 and AvaSocial. AvaTrade’s trading signals and analysis is provided by Trading Central.

The broker is regulated by the Central Bank of Ireland, ASIC and the FSB. They offer two account types: standard and demo. You can fund as little as $100 to begin trading with AvaTrade. You can fund your account using e-wallets such as PayPal, Skrill, NETELLER and WebMoney in addition to bank wire transfers and credit card. They also provide very responsive customer service, via chat, email, social media, fax, telephone and others. Telephone support is provided to 21 different countries around the world.

9 – LonghornFX

 

67% of all retail investor accounts lose money when trading CFDs with this provider.

LonghornFX is a new forex broker, launched in 2020. As a true ECN broker, its extensive offering includes stocks, indices, commodities, digital assets, exotic pairs and currency pairs. You can trade more than 150 tradable instruments, 60 currency pairs, 35 cryptocurrencies, 11 commodities/indices and 64 stocks.

LonghornFX provides the MT4 platform, where you can access a wide range of indicators to map out their trades. You can also use customisable charts based on your preferences. LonghornFX also provides a free demo account. The support team is available 24/7 via chat, email or phone call. The broker offers leverage of up to 500:1 on currency pairs and 100:1 on cryptocurrency trading.

The minimum required deposit for this broker is fixed at $10. You can access a variety of technical tools in MetaTrader 4 such as SL & TP values, Breakout zones, Xandra Summary, Position Size Calculator, SHI Channel true, Orders Indicator, Autofibo, NewsCal, i-Profit Tracker and Undock Chart just to name a few. In addition to this, you can use indicators such as Money Flow Index, Market Facilitation Index, Trendline, Accelerator Oscillator, Envelopes, RSI, Fibonacci, Stochastic, ZigZag, the On Balance Volume indicator (OBV) and others.

Pros	Cons
LonghornFX offers a demo account through the MetaTrader 4 and WebTrader application.	The broker does not provide a FIX API for DMA
The broker offers a very simple signing up process.	It is largely beyond the jurisdiction of most major regulatory bodies.
You can open as many trading accounts as you wish with Bitcoin as a base currency.
You get access to shares of major international companies such as Alibaba Group Holding Ltd and Volkswagen AG

How to Trade Forex?

The first thing you will have to do is choose an appropriate forex broker to sign up with. There are many considerations for making this decision such as:

• Regulation: Ensure that the broker you choose follows regulations that require it to verify new accounts, hold funds in segregated bank accounts, and get audited on a regular basis. For UK-based users, their best bet is to choose brokers regulated by the Financial Conduct Authority.
• Range of offerings: If it’s forex trading you are interested in, make sure that the broker can present a range of options for you to choose from. This includes most major and minor pairs. Some brokers might even offer exotic pairs which are far more volatile.
• Fees: Fees can play a major role in your trading success as it eats away on your profits. Fees include commissions, spreads and other non-trading fees like currency conversion fees, inactivity fee and fees for deposits and withdrawals.
• Trading tools: As you become an expert in forex trading, you’ll soon require a bunch of additional trading tools for technical analysis. The broker should be able to provide you with popular trading tools and indicators such as MACD, Bollinger bands and moving averages.
• Customer service: Always ensure that your broker is able to provide a responsive customer service team. They should be able to answer your queries from the moment you start to open your account till you find your first trading pair.
• Payment methods: You’ll need to deposit and withdraw money several times during the course of your trading. So make sure that the broker provides a seamless payment method. Most reliable brokers offer payment options that cater to traders of all levels.

You will have to carefully evaluate each of the brokers you have shortlisted before you make the final decision. The success of your trading will depend greatly on the quality of the broker you select.

After you’ve decided on a particular broker, it’s time for you to sign up with them and start your trading journey. Even though the signup process differs from broker to broker, the basic principle behind the process remains the same.

In this guide, we’ll be using eToro as an example.

STEP 1: Open an account

67% of all retail investor accounts lose money when trading CFDs with this provider.

The first thing you need to do is open a forex account with the broker you have chosen. In this case, head on over to eToro’s official website and click on the “join now” button. You will be required to enter your username, a password and some personal information such as name, phone number and email.

As the Financial Conduct Authority of the UK regulates eToro, you will be required to verify your identity before you proceed. Upload a copy of your driver’s license or passport along with a copy of a financial statement or utility bill.

STEP 2: Start Funding Your Account

The broker requires you to deposit a minimum of £140 when live trading. You can choose from any one of the available funding methods: debit/credit card, bank transfer, wire transfer, Skrill and Neteller.

STEP 3: Place Your First Forex Trade

After the funding has been complete, you can start to place trades. To check out eToro’s dashboard, go to Top markets>Currencies, which displays the most traded currencies at the moment. Click on any currency pair to start a new order form.

You can enter how much money you would like to dedicate to trade and your desired leverage in the order form. If your trading strategy requires it, choose a stop loss or take profit level. To place your first trade, simply click on “Open Trade”.

Conclusion

With trades valued at over £4 trillion per day, the forex market is very widely traded across the world. Forex trading creates the basis of the universal economy by allowing businesses, governments, individuals, and banks to swap currencies seamlessly. A trader takes risks in the markets to earn profits via forex trading. To learn to manage these risks, start practising trading on a demo account with a reliable broker.

Start Trading Forex with eToro.com, the World’s Leading Trading Platform!

FAQs

How do different FX brokers make money?

There are two primary revenue streams for forex brokers: The first is by charging a commission on every trade entry and exit. It is calculated as a percentage of your total order size. Secondly, forex brokers get their revenue from the spread, which is the difference between the buy price and sell price of a pair.

What is the role of forex brokers?

Forex brokers act as a bridge between the buyers and sellers of currencies. They facilitate the trades and ensure that all orders are covered by enough liquidity.

Are UK-based brokers regulated?

The majority of brokers based in the UK fall under the jurisdiction of the Financial Conduct Authority (FCA).

How much money do I need to open a forex account?

The amount depends on the minimum deposit requirement of the broker. However, it is recommended that you deposit at least $100 to have some room for making profits and to apply better risk management.

Why should I use a demo account?

A demo account provides you with the chance to test out the platform and experience a real-time market environment in a risk-free way. You can easily test out strategies, execute trades and get a feel for the market without the worry of losing funds.