KNOWLEDGE CENTER

Among the unique features of the forex market is that it trades 24 hours a day. Unlike stocks, which are limited to national exchanges, currencies are traded on exchanges all around the world. This means that you can trade at all hours of the day.

In addition, there are many currency pairs you can trade to make money, such as:

USD/JPY – Buying this pair means going long the US Dollar, and going short the Japanese Yen.

GBP/USD – Buying this pair means going long the British Pound and going short the US Dollar.

CNY/USD – Buying this pair means going long the Chinese Yuan and going short the US Dollar.

There are countless other currency pairs you can trade. In addition, the forex market has tremendous liquidity, which makes it suitable for large institutional investors looking to take gigantic positions

How to Open a Brokerage Account for Trading Forex

To begin trading forex in the US, you need to open an account with a registered forex broker. There are many brokers to choose from. They vary based on their reputation in the market, the size of the brokerage firm, as well as the trading conditions they give you.

For example, you will want to compare the margin requirements and leverage conditions that different brokers give. Some forex brokers will give you leverage of as much as 500:1 while others will only allow leverage of 50:1.

A high leverage such as 500:1 means you can control up to $500 of trade position for every $1 of margin you deposit in your account. This is attractive since leverage can make your successful trades more profitable. You should be careful with leverage, however, because a small move against your position can wipe out your margin entirely and lose you trading capital.

Basic Strategies for Trading Forex

A good beginner’s approach in the forex market is to select a winning strategy and master it. What you should not do is deploy a random mix of strategies, or, even worse, trade with no strategy at all.