How to open a forex account
Unlike in the past, now it is way too simple to open a forex account. With the activation of the internet, the doors for the forex market got wide open. The users can now simply open an account through any online forex platform. As collateral, the customer has to pay off a small amount to the forex broker. With the deposit of money, they can open an account. The forex broker also offers leverages to the customer. This enables small retail traders to make trades with large amounts. The leverage offered to the traders depends on which country they are from.
In most cases, the leverage offered to the traders ranges between 30 to 400 times the money they have with them in the deposition for the trading. Forex trading involves a lot of risks. It means that if you use high leverage for your trading, the risks involved will also be huge. There are two ways in which a Forex broker makes money through trading. One is by charging additional fees to the traders and the other is by the bid-ask spreading of the currency pairs. In the bid-ask price, the pairs will have a bid and ask price. There is a spread between these prices and it is the forex broker who collects this spread amount.
An additional fee can be charged by the broker in the form of collecting fees from the client as a monthly fee to access a particular software, to make the purchase of a particular trading product, as a part of the transaction fees, etc… The regulation of the forex industry is done by the Commodity Futures Trading Commission and the National Futures Association. As there are numerous forex brokers available, the competition between them is very high. So these brokers are trying to eliminate as many fees as possible to attract more customers. Because of this reason, many forex brokers offer trading for a very small fee.
