Foreign Exchange, or as you dearly call Forex is your market for playing with currencies. If we say play, then you should necessary play it for winning. It is not a casino play where you place a bid and earn payouts. This is real money you are handling and you do not get a second chance or bonus. You are playing with really big guns in the biggest financial market where you simply cannot afford to depend on your luck.
Trade in it if you know how to or trade through someone who knows how to. That someone is exactly called a broker. The big layers will be trading as a part of their business operations internationally or import and export their products and services. These global traders once exclusively ruled the market and the conditions turned favorable for single traders largely due to the retail brokers. So, unless you know the basics and have the financial presence of mind, it is better to avoid attempting a mindless trade.
With a recent introduction to the history of Forex market, retail brokers have made it possible for the individuals to invest and reap in quick profits alongside the strong companies. The trading platform provided by the Forex broker allows the traders to actively participate in the transaction process and speculate currency or simply to bring home the profit. He will represent you in the trade, bid for you, and buy or sell the currency on your behalf, without letting you feel the pressure of market ups and downs. Before hurrying to fix the broker, scan through the key criteria to decide how trustworthy and reliable the broker is.
As everyone is aware, different countries have different currencies. The value of every currency is not the same; some may be worth of hundreds of units of another. The most popular and traded currency is the US Dollar (USD), called a major, accounting for almost 80% of the transactions. Other highly reputed currencies are Euro, Japanese Yen, Pound Sterling, Australian Dollar, Swiss franc etc.
While pairing currencies, go for the majors. Lower-rated currencies can also be traded with USD and will be called minors. You can trade a minor with a currency cross if the major is not USD. Brokers may not be offering all the pairs, the more the number of currency pairs they offer the more reputed they are. Hence, that ensure the broker allows the pair of your choice.
Some put forth incredibly low amounts as initial deposit, which you can consider if you are taking infant steps into the trading market. Before fixing a broker, also check on the policies of withdrawing your deposit after you commence trading through them, including the profit and bonuses. Some brokers may keep monthly or weekly limits on the number and amount of withdrawals while few may also go to the extent of levying fees on withdrawals.
So the clever option is to approach a broker who is more concerned about the welfare of their clients and let you avail your currency without any extra commission. Legal authority This is quite important since you are dealing with actual currency and transmit it internationally involving different countries. Look for appropriate certification or license from the concerned regulatory authority before you get carried away with their offers.
Leverage is like a loan given to you by the broker. The higher the leverage is, the higher the chances are of earning more profit and sometimes higher risk. You can find different leverages in the offers such as 1:100, 1:200, 1:500 etc. As a trader, you are actually investing in the expected fluctuation of the value of the two paired currencies. Traders trade multiple numbers of currency units called lot size. A lot size may be 100, 1000 or more units of the second currency. A good broker will offer a variety of lot sizes and also smaller unit, thus giving flexibility to the trader to take the lesser risk. You can visit any of the good Forex broker reviewing sites such as the trustedforexbroker.com for assistance.