Currency Trading Account - Make Sure You Pick The Right One
Any trader who has interest towards currency trading should know that opening a currency trading account has to be done carefully. Cheat brokerage and trading companies are in every street corner of the internet and if you don't come with good preparations, they will eat you alive. If somehow you can pass them and introduced to a real broker, I suggest you to check the broker features first to make sure that you get the most benefits from them.
These are some factors that need to be considered when you opened a currency trading account:
1. Leverage
Leverage means the use of various financial instruments or borrowed capital, such as margin, to increase the potential return of an investment. In forex market, it means a loan that is provided to an investor by the broker that is handling his forex account.
Example: Leverage 200:1 where 1 standard lot is $10,000. This means that you will need $10,000 /200 = $50 in your equity to open 1 standard lot.
Different account will offer you different leverage; pay attention to this factor.
2. Spreads
Spread indicates the difference between buy and sell price. Ask is the price when you buy while bid is the price when you sell. Different trading companies offer different spread and took compensation from it. Some other brokerages will charge commissions for each trade in addition from this spread. The higher the spread, the harder it will get to gain profit, so this is an important factor to check.
3. Currencies to Trade
Usually, standard trading account allow major currency pairs such as USD/JPY or EUR/USD, but other currency pairs such as EUR/CAD or EUR/AUD can also offer large profits and you may want to give it a try. It is purely personal preferences; if you don't have any interest towards the other currency pairs, then just leave it be.
4. Reliable Support from the Staff
It is important to know that you are deal with a real company with real person behind it so you will want to have direct contact means such as live chat or telephones. This is an vital factor to consider since you can't solve your problem fast if you have to wait for email replies for days or weeks; it is just not how a credible company ways to do things.
5. Software
When you open a currency trading account, some companies will provide necessary software for free, the others don’t. Unless there are significant benefits, I suggest you just take the free software.
6. Funding Option
Most of the companies are accepting funding in many major ways; some others only receive funding via paypal and bank. Use whichever fit your preferences and convenience.
7. Have Practice/Dummy/Demo Trading Account
In a practice account, you can get access to the trading platforms and start practicing online trading. This feature also have other uses:
-To facilitate your strategies/trading signals/forex robots testing. This practice account also backed up by real live data, so you can get real test results.
-While using the practice account, you can see if the trading platform is easy to use or not. Some platforms are more difficult to use than the others.
8. Support Many Languages
This is particularly useful for anyone who doesn't speak English as their native tongue.
Opening a currency trading account doesn’t has to be difficult or complicated; just make sure the account support all that you need in currency trading.
About the Author
As a trader, Matthew Johnson is always play safe when opening an account. The next thing to do is selecting a good trading system, read about it at forex trading systems; If you still confuse, read AvaFX Review, you can learn about good trading account from it
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