- Best Forex Brokers
- Forex for Beginners
Forex for Beginners
We have put together a introduction to forex trading. Learn the basics of foreign exchange trading through the lessons below. For further forex education, you can visit our other “Learn Forex” sections.
|Rank||Broker Name||Trust Score||Reviews|
|1||XM||99 / 100||XM Reviews|
|2||Xtrade||94 / 100||Xtrade Reviews|
|3||HotForex||94 / 100||HotForex Reviews|
|4||Plus500||89 / 100||Plus500 Reviews|
|5||InstaForex||80 / 100||InstaForex Reviews|
Why trade forex?
The foreign currency exchange market is the most liquid financial market in the world. This means that on a daily basis the amount of money traded in forex far exceeds any other financial market – an estimated $5.1 trillion dollars is turned over each day. (Source: Wikipedia)
What exactly does this mean for the forex trader? It means that the opportunities to trade are vast, and most importantly the market is free of any single handed operation controlling prices. There is no “insider trading” when investing in currency so that leaves each trader on their own to become a profitable trader. This of course is the ultimate challenge and what attracts millions of every day people into the forex trading game.
The potential profits can be huge because of high leverages offered by brokers but be warned that the same leverage can lead to huge losses very quickly if you don’t have the right trading discipline. Due to the risky nature of any form of financial investment, a good solid education in the basics of forex trading and reading charts is a must for every new trader. We recommend spending a month or two in learning & practising on a demo account so that you have a feel for the market and understand how to make & manage your trades.
Start with a demo account
A demo forex account is freely provided by most brokers and will give you access to their trading platform using virtual money. With this account, you can place trades exactly as you would with a real account, using up to date prices from the live markets. Spending at least a month on a demo account is essential for most beginning traders unless you have prior experience in other financial markets such as stocks.
Treat your virtual currency as if it were your own. One of the most important attributes of a good forex trader is controlling emotions – when to cut losses and not allow emotions get in the way of making the correct decisions. It would be a bad habit to treat the demo account as “play money” and thus make trading decisions you may not otherwise do with real money. So remember to mentally focus on the demo account as if it were your hard earned savings.
Choose a beginner friendly broker
Another tip for complete beginners to forex trading is to choose a beginner friendly broker. What do we mean by that? There are brokers, then there are brokers who offer support and a lot of educational material for new traders. Take full advantage of brokers who offer live webinars and training sessions with their expert traders. Some brokers don’t even require you to make a real money deposit in order to access their materials (you may need to sign up and send the relevant identification documents).
Most brokers want to have good traders as their clients because the longer they stay, the more trades they will make and the more commission the broker will earn.
The above table contains the top ranked forex brokers in our database for beginners.
What’s important for forex beginners?
Forex trading isn’t a get rich quick scheme. It’s extremely challenging and requires a lot of discipline. It’s also the reason why it’s extremely rewarding and traders will tell you that they get a lot of satisfaction out of completing a successful trade.
For beginners in forex, the hurdles can appear very high. They must learn all the terminology, trading styles, how to read news, how to read charts, how to identify patterns, risk management, money management and more. For the majority of new traders, it’s not reasonable for them to be able to spot the best forex broker to use to start with and sometimes they will eventually end up at a different broker in the long term.
The most important thing for a new trader to look for in a forex broker is a consistent experience. That covers every aspect of a trade from the beginning to the end, which we have set out below to base our rankings on:
- Trading platform – Must be stable and fast. No misquotes, slippage, downtime, etc.
- Customer service – Being accessible when help is required
- Educational materials – Live webinars, tutorials, videos
- Spreads – Low competitive spreads on major pairs
The last thing a new trader needs is an unexpected outcome. It’s hard enough learning the ropes that you don’t need crashes, orders not executing, slow chart updates, etc.
On this page for rankings, we preference forex brokers who are willing to nurture new traders and help them realise their potential through education and patience. Ultimately, they are the traders who will end up becoming the biggest clients.