Forex Trading Account
Forex is the most popular of all the financial trading markets and because of its popularity; you will find a huge number of forex trading account providers. These will range from spread betting companies, Contract For Difference brokers, options and binary options brokers and also companies solely offering foreign exchange trading.
As we can see there is a multitude of competition and it is important that prior to embarking on trading forex, you choose the account that is best for you.
What should you look for In a Forex Trading Account?
There are a number of key things you should be aware of before trading your hard earned cash. We will go over each of these in turn.
The amount you will pay to open and close trades will depend on a number of things: the derivative you choose to trade, the company in question and the currency pairing. Spread betting companies charge a spread on every bet you make and the number of points charged will depend on the company and the pairing. Similarly CFD brokers will often charge a spread and also a commission for opening a contract. Vanilla options brokers charge a premium but work differently to other derivatives providers as this premium basically protects you from vast losses if the market were to go against you.
If you are solely looking to trade forex then you are probably advised to go for an out and out forex trading account that offers nothing but the ability to trade currency pairs. Costs will probably be less than with other derivatives and the overall package will often be better suited to someone who is looking to only trade currencies. Make sure you have a think about which pairs you are planning to trade as companies offer headline rates on particular currencies and a little bit of research on this can save you considerable sums of money in the long run.