It’s not rocket science, but it still helps to learn the steps of opening a currency trading account if you are planning to trade in the forex market.
Forex market, the short for the foreign exchange market, is the largest market on the planet with a history that goes back to the time when national currencies emerged. It’s where organisations and traders exchange currencies – some for business purposes like money transfer, some for making a profit. Thanks to the digitisation of the retail forex brokerages, it’s now also more accessible than ever to trade in the currency market.
To trade in the forex market, you would need a few things. An internet connection, the know-how of a reliable online broker, some initial capital, and a currency trading account. To that point, we are looking into the steps required to open an account and start trading currencies in detail below.
Steps to Opening a Forex Trading Account
To open an account, first, you have to find a reliable broker. Doing some research on the internet can certainly help, while you should also be reading the fine prints to check whether they are regulated. They also should be reliable, with services that not only suit your needs but also efficient, cost-effective, and consistent.
Once you find a broker you like, you can start the process of opening a currency trading account. The steps may vary from brokerage to brokerage, but it includes a few common things in general. Those are:
- Choosing an Account Type: brokers often offer different accounts to suit the different needs of their customers. These accounts are differentiated by things like deposit amounts, access to news and analysis, beginners and professionals, etc. So, check the account types available and choose one.
- Filling Up an Application Form: just like a bank account, you then have to fill up a form with personal and financial information. Some brokerages may allow you to leave the financial information part for later.
- Providing a Proof of Address: depending on the location and your broker, you may have to provide one or more proofs of identity and your address. It may include a copy of your passport or driving license.
- Accessing the Platform: once you register with a broker, they would most likely give you a username and password to log in to their online forex trading portal. This information may be sent in your email as soon as the account is created.
- Depositing Initial Funds: to start trading on currencies, you have to have some capital. It no longer needs to be a hefty sum, but the minimum amount depends on the broker, location, and account type. Once you deposit the money, you are now all set to start trading with your currency trading account.
There you go, all set to get your hands on trading currencies! Make sure you understand the platform’s interface well before making your first trade to avoid any costly errors.