If you spend any time on investment blogs, you have seen Forex mentioned at least a few times. For people unfamiliar with this fast paced financial process, it can be a little intimidating. However, most Forex brokers make it easy enough for newbies to get started. If you want to learn the ropes, the best thing you can do is sign up. But with so many brokers to choose from, and so many differing options depending on which broker you choose, it’s important to take a little time to understand what makes a good Forex broker and what makes a bad one. We’ll cover some of these basics below. Also check out the best Forex platform for beginners, according to popular usage.
Understand the Process: Forex is about looking at the present values of currencies, stocks, and other financial options, then guessing that the price is going to go up or down during a specific interval of time. You get to pick the time interval and the direction of value change, either up or down. There are two threshold above and below the present value, called the Bid and Ask. The change in value at the end of the time you selected must have gone above or below the relevant line. If the value continues to go in your chosen direction, you receive dividends depending on how far the value went. Losses are totalled the same way.
Look for Beginner Opportunities: The best Forex platform for beginners will always offer educational resources and “Free play” accounts. These tutorial accounts will give you a chance to learn the platform, as well as all of the considerations that go into choosing consistent winners in Forex. If a platform doesn’t let you try out the service without first depositing money, this probably isn’t the place for a beginner to learn the game.
Understand the Finances: Not all forex brokers approach user finances the same way. Some require large initial deposits. Others have wide spreads between the Bid and Ask prices, meaning that it is harder to win. These spreads are measured in “Pips”, so the more pips that your price has to travel before it starts to make your money, the less money you will make. You want to look for “narrow spreads”. Also pay attention to the speed and ease with which the broker allows users to withdraw money. More than one phony brokerage service has sprung up in the Forex sphere, taking some or all of users’ money with it. These are very much the exception. Forex brokers are generally very reliable. To ease your mind, select a company that has been in operation for more than a few months, and which has many positive, independent reviews.
There are loads of other details we could get into, but these three criteria are sufficient to help you understand the basics of finding a reputable Forex brokerage service, that’s also good for beginners. Not every company will fit that bill. Just don’t stop looking until you find the one for you.