Forex or foreign exchange deals with a kind of trading where traders buy currency pairs, for example, EUR/USD, USD/INR, etc. and make profits from the fluctuations in the foreign currency market. These trades depend on the supply-demand of the currencies among the group of decentralized banks that control their pricing.
One term that will often pop up when trading in the forex is “pip”. Pip stands for percentage in point or price interest point and it is the smallest unit of trade. That is, a change of 1 pip would usually mean a $0.0001 fluctuation in a currency pair (USD/CAD), for example. But this is subject to change for other currency pairs. When the Japanese Yen is involved a pip could stand for ¥0.01. It is strongly advisable to check and understand the value of a pip for every currency pair to correctly recognize the value involved in the trade.
The next word we would need to understand is “spread”. A spread in forex means the difference between the buying price and selling price of the currency pairs for a trader. There are fixed and floating spreads and as their names suggest, the fixed spread does not change much except in events of recession or changes in financial policies of the Nations, while the floating spreads are considered volatile, affected by factors like market trends. Traders are to be mindful of market stability while calculating their spreads or margins.
Many platforms offer forex trading options. Here are some of the best.
• IG (Previously Investors Gold Index)
Offering an account with a minimum deposit of $250, the IG has several admirable features. It offers a wide range of tradable instruments, a demo account with a $10000 virtual value, allows copy trading and has several other options that make it well-preferred among most traders. They also offer 24/7 customer service and come with a wide array of educational resources for new traders.
• Exness –
Requiring a minimum of $10 as deposit, the Exness has a commission-based pricing model for trading costs. They offer unlimited maximum leverage, have demo/dummy accounts and have a copy trading option.
• Interactive Brokers
IB charges $250 as a deposit for its accounts. They boast a highly competitive trading cost, efficient customer support and extensive materials for the traders to learn more about their craft. Though they do not have exclusive copy trading features, they do provide demo accounts for the practice of new traders.
• Saxo –
They have a $0 minimum deposit accounts, have the option of using demo accounts but miss features for copy trading. They also host a good collection of videos and other material for information about trading.
• CMC Markets
CMC Markets offers $0 minimum deposit accounts along with provisions for demo accounts, copy trading and allowing maximum leverage of up to 30 times.
• FOREX.com
A minimum $100 deposit is expected for trading here. They offer attractive spreads and have demo accounts with a virtual $10000 for trading practice. Although they don’t have a dedicated copy trading platform, they do support multiple tools for market research.
• Charles Schwab
They have a minimum $0 deposit account. They do not have copy trading options but they provide demo account and have a collection of market research resources available for traders to use and improve.
• eToro
A pioneer in social and copy trading, they charge upwards of $50 for minimum deposit. They also provide a $100000 virtually funded demo account for practicing trades. They lack in tools and educational resources. They have spreads that start at 1 pip for popular pairs.
• FXTM
With a $10 minimum deposit for some accounts, they have features supporting copy trading and provide demo accounts for sharpening the traders’ skills. They usually have options for maximum leveraging of 30 times with most regulators.
• Fidelity Investments
They don’t require a minimum deposit for their accounts. They do not support copy trading and maximum limit for leveraging changes with the region of the trader. They provide a demo account for traders and have spreads that are market relevant.
