If you are looking for a way to make extra income, you may want to look into the exciting and fast paced world of Forex trading. This is simply the art of investing in the foreign exchange market. You buy and sell world currencies as one increases in value against another with the goal of making a profit. It is not for everyone, but if you can afford to risk some of your money to take advantage of the opportunity to make a good profit, then you might be cut out for the world of Forex trading.
You will enter the Forex market as an individual or retail trader. That means you will have to find a broker to handle transactions for you. There are many brokers providing various Forex trading services online. However you have to make sure that the broker you choose is registered as a Futures Commission Merchant with the CFTC (Commodity Futures Trading Commission). The Forex trading websites are also useful resources for the beginning trader, and many of them provide training services to introduce you to the concepts involved in Forex trading. You can even take online courses in Forex trading so that you will be better prepared to handle yourself in this market. The websites may also offer software demos in which you can practice virtual Forex trading without having to risk any of your actual capital.
If you decide to go ahead and get into Forex trading, then you need to open your own Forex account. To do this, you usually just need to fill up a form and provide proper identification. You may also have to sign a margin agreement included on the form. This agreement gives your broker permission to obstruct a currency trade if they consider its risk to be too great.
There are several types of Forex accounts. A standard account can be opened with a minimum investment of $2500 in most cases. A few websites now allow you to open a standard account with only $1000. However, if you are just starting out, or if you plan to invest less than $10,000 in Forex trading, then you should probably get a mini account. The minimum investment for a mini account is generally $250. Some brokers may even allow you to invest as little as $100, although such a small amount will limit your flexibility in trading. The advantage of getting a mini account is that it gives you more flexibility in trading several different Forex lots at the time for a comparatively smaller investment in your part.
