So after demo trading on at least three broker platforms, you’ve narrowed down your choice to a single forex broker?
After finding the right broker for you, you can open a forex trading account in three simple steps:
- Selecting an account type
- Activating your account
This is worth repeating so it shall be repeated. Before trading a dime of your hard-earned money, open up two or three demos.
Why not? It’s all FREE! Make sure to try out and “kick the tires” of several different brokers to get a feel for the right one for you.
Choosing an Account Type
When you’re ready to open a live account, you have to choose which type of forex trading account you want: a personal account or a business (aka corporate) account.
In the past, when opening a forex trading account, you’d also have to choose whether you wanted to open a “standard” account, a “mini” account, or a “micro” account.
Now, that isn’t much of a problem since most brokers allow you to trade custom lots.
This is great for newbie and inexperienced traders who only have a small account of capital.
This provides you great flexibility, as you won’t have to trade bigger than you’re comfortable with.
Also, always, always, always remember: Always read the fine print.
Some brokers have a “managed account” option in their application forms. If you want the broker to trade your account for you, you can pick this.
But is this what you really want? After all, you didn’t read through the whole School of Pipsology just to have someone else trade for you!
Besides, opening a managed account requires a pretty big minimum deposit, normally $25,000 or higher. Also, the manager will also take a cut out of any profits.
Lastly, make sure you open a forex spot account and not a forwards or futures account.
You will have to submit paperwork in order to open an account and the forms will vary from broker to broker.
They are usually provided in PDF format and can be viewed and printed using Adobe Acrobat Reader program.
Also, make sure you know all the associated costs, like how much your banks charges for a bank wire transfer. You’d be surprised how much these actually costs, and they may actually take up a significant portion of your trading capital.
Once the broker has received all the necessary paperwork, you should receive an email with instructions on completing your account activation.
After these steps have been completed, you will receive a final email with your username, password, and instructions on how to fund your account.
So all that’s left is for you to login and start trading. Pretty easy huh?
Time to log in, pop open those charts, and start trading!
But wait just one minute!
We strongly advise you DEMO trade first. There’s no shame in demo trading – everyone has to start somewhere.
If you have been demo trading for at LEAST six months, then maybe you can dip your feet into live trading. Even then, we suggest you go in the shallow end and consider how much you want to risk.
Trading live is a different beast altogether. It’s like the difference between sparring against your kid brother (or sister) and fighting Manny Pacquiao.
If you start trading live without any demo trading experience, this is what usually happens:
But no matter how successful you were in demo trading, nothing can replace the feeling of having real money on the line.
And once you’ve started trading on a live account, never get too comfortable. Always remain vigilant and use proper risk management.
Otherwise, this might happen: