Since the rise of retail forex brokers in the 1990s, anyone with access to a computer and internet connection can begin trading currencies. Opening a forex trading account is similar to opening a stock brokerage account; both can be completed quickly in just a few steps. Before traders begin trading currencies though, they must verify their identity, address and source of funding their account – typically by providing multiple documents or going through a verification process that may vary by broker.
After filling out and submitting their online application form, traders will receive access to their brokerage’s client portal and can arrange to transfer funds from their bank account into their forex trading account. Most brokers offer various funding methods including credit cards or electronic payment systems so traders should carefully consider any fees, processing times or availability issues when selecting their preferred method for depositing funds into their forex account.
As part of their online application process, traders will typically need to provide various documents and verification information in order to open a forex trading account. This may include providing proof of identity (i.e. government issued ID card or passport), address proof (such as utility bills or rent/lease agreements, voter’s ID cards or driving licenses), financial income verification proofs such as current income tax return acknowledgement slips or certificate, recent salary slips or bank account statements) etc. Verification procedures vary between brokers and may take several days or even weeks depending on when opening an account is opened.
Before investing, a trader should carefully read through their forex broker’s risk disclosures on their website. Forex can be an extremely volatile market with many more losers than winners among beginners – therefore only invest with money you can afford to lose and refrain from using leverage which could dramatically magnify both gains and losses.
Beginners to forex trading must also remember that mastering it takes both time and effort, making a reliable broker that prioritises security paramount for successful trading.
Apart from choosing a reliable broker, traders must also select an account type that fits their individual needs. A standard retail forex account (commonly referred to as classic) may be suitable for beginners looking to learn the fundamentals and develop strategies before investing a substantial sum of capital; however, standard accounts should not be used with automated trading software as they cannot meet quick money making targets quickly enough. Swap-free forex accounts provide Islamic traders an alternative option as these help eliminate interest charges associated with overnight positions.