Forex trading can be a little difficult to understand for new traders but is really very simple in its operation. Unlike traditional stock market trading where you are buying a position in a company through stock, Forex trading is based on the difference between two international currency values and you profit by being on the right side of their movement in value. In essence you are making a bet on a set of currency pairs and hoping the one you chose becomes more valuable. Forex trading is done through a comparison of these currency pairs and your profit lies in the movement of one of the pair over the other. These movements might be very small and for you to make a larger profit from these minor movements, you’ll need to have a larger position than you might with additional stocks. Many Forex brokers will also extend you a measure of leverage that allows your investment to control a larger portion of stock than it actually represents. This leverage enables you to collect a substantial profit from very small movements in currency values, in a very short amount of time. Most movement into and out of a position lasts less than a day in the Forex market unlike traditional stocks that you may hold for months.
Best Forex Brokers
| Broker | Overview | More Info | Open an Account |
|---|---|---|---|
 | Min. Deposit: €100 Margin, leverage, spread: see website for actual values | Plus500 is a CFD service Commodities: Yes FX-Pairs: 59 Unlimited demo account | www.plus500.com Open a Demo or Live Account Plus500 Review |
 | Min. Deposit: €250 Min. Margin: 0,5% Max. Leverage: 1:200 Spread EUR/USD: 3 Pips | FX-Pairs: 44 Commodities: Yes CFD: Yes Special Features: Metatrader | www.avatrade.com Open a Demo or Live Account AvaTrade Review |
 | Min. Deposit: €100 Min. Margin: 0,25% Max. Leverage: 1:400 Spread EUR/USD: 2 Pips | FX-Pairs: 136 Commodities: Yes CFD: Yes Special Features: Guest-Account | www.easymarkets.com Open a Demo or Live Account easyMarkets Review |
| CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money. |
Best Social Trading Broker
| Broker | Overview | More Info | Open an Account |
|---|---|---|---|
 | Min. Deposit: €50 Min. Margin: 0,25% Max. Leverage: 1:400 Spread EUR/USD: 3 Pips | FX-Pairs: 16 Commodities: Yes CFD: No Special Features: CopyTrader | www.etoro.com Open a Demo or Live Account Trading involves risk eToro Review |
Trade Forex Longer
The Forex market also differs from other stock markets in that it’s available around the clock for most of the week. This means you can make trades at all hours of the day and night because of this extended trading time. This is a welcome change for many investors who may not have the time to trade during a busy workday.
Research Is Simpler
The advantage of only having to research a set of currencies makes Forex trading simpler for most investors. Even though this comparison can involve a lot of work, there are a large number of tools and programs to help you spot opportunities for profit in this market. Some investors will do this research themselves and others use a brokerage service to guide them on the proper investments to make.
Understand How To Identify The Best Trades
With Forex investing you initially compare a set of currencies that are traded together in a currency pair. The value of these two currencies is set when you make your investment and will change over time. For your trade to be profitable, you’ll want to own the currency in the pair that increases in value against the other currency so you can exit the position with a profit. This change in value can happen very quickly due to events inside and outside of the country the currency represents so you’ll need to monitor your investment regularly for these movements and take as much profit from the trade as possible. There are a number of tools and programs you can use to help you make these trades automatically. As you gain more experience with Forex trading you can start to use these automated tools to help you with your trades.
