Are you a beginner looking to jump into Forex trading? Those who have a bit of experience will tell you that choosing the best forex trading account is as important as trading Forex. The Forex market is not centralized (no trading houses or central authority). Instead, trades are facilitated using brokers through a trading account.
With millions of Forex trading accounts out there, it can be challenging to tell good from bad and even harder to find the best one. At the same time, Forex trading accounts are not the same from one broker to another broker. Some offer beginner-friendly features like copy trading, while others provide sophisticated trading modules.
To help beginners have a smooth transition into real-life Forex trading, this guide will outline some of the things you need to keep in mind when choosing the best Forex trading account.
Tip #1- Look for Beginner Friendly Features
There is no denying the fact that Forex trading can be challenging for those new to the industry. From reading metrics to devising exit strategies, to understanding pips and closing trades, many beginners end up making costly mistakes that wipe out their entire trading account.
When choosing the forex account, look out for one that has beginner-friendly features that include the following:
- Demo features– The chosen account should have a demo account feature. This allows you to practice forex trading with free virtual money as you build your confidence. You might discover some mistakes that could have cost you thousands of dollars if it were a live account.
- Copy-trading– This is a relatively new trend in the online forex industry. Copy-trading allows beginners or those who do not understand Forex trading to mirror another trader’s trades. A beginner-friendly account should have some form of mirror trading as a core feature of its platform.
Tip #2 Easy Account Management
This might seem obvious, but some forex trading accounts have complicated account management modules that can confuse new traders. Look for a Forex account that shows you how much you have in your live account, how much you have made in a given period, and how much you have available to withdraw.
Tip #3-Best Forex Trading Account -Choose the Right Account Type
There are different types of Forex account which you need to choose from. Some are tailor-made for certain types of traders, while others may cater to specific trading strategies. Which account type should you choose as a beginner?
While there are probably thousands of account types out there, the most popular include standard accounts, mini accounts, micro accounts, and managed accounts. Standard accounts are the most common, with minimum balances ranging from $1000 to $5000. They also have a more comprehensive currency spread and trading features.
Managed accounts are, by far, the most beginner-friendly accounts out there. A managed account allows you to make a deposit, and the trading is done on your behalf. You can use a managed account if you don’t want to get your hands dirty or as a learning platform. However, it’s advisable to move into a more hands-on approach after learning the ropes.
Tip #4 Choose Licensed Forex Brokerage Accounts Only
Perhaps this is the most important tip on this list. While Forex trading is not centrally managed, there are regulatory bodies that license and oversight all Forex brokers. There are millions of Forex accounts out there to choose from. Depending on your location, you should register with a Forex account that is managed by a recognized and licensed broker.
For instance, the National Futures Association registers Forex brokers in the US while the Australian Securities and Investments Commission regulates Australian Forex brokers.
Tip #5-Trading Platform Features- Value Addition
Anyone can launch a barebones trading platform and market it as “the best Forex trading account”. A good Forex account must provide extra important features such as real-time Forex charts, indicators, news, and account trading features.
Forex trading can be a lucrative activity for you if you get it right from the word go. Choosing the best Forex trading account is, therefore, one of the most important decisions you will have to make as a beginner.