Phase 1: What Is Forex Trading?
Before starting Forex Trading, you must have all information and knowledge about it that what is this business, how to do this business, who involves in it and where it is done in the world.
What Is Forex Trading?
Forex Trading is highly profitable business. It is an international business which is very simple and easy. To do this business, you neither a huge office setup nor a huge amount for investment. You can start this business from your home with a small amount of capital. You only need computer and internet for this because this is online business. Since this is an international business, there is no restriction on time. That is why, its market is open 24 hours and you can trade whenever you wish with your ease and comfort.Forex market is online whether you are online or offline, your computer is switched off or turned on but the server always remain online. Good thing about Forex Trading which differentiate it from other business is that you control the profit and loss of business in your hand.
What To Do In This Business?
Certainly, you know the business of Money Changing. This business is flourishing in every corner of the roads. If someone from abroad lands in your country, he posses the currency of his country. In order to shop in your country, he need currency of your country, so what will he do. He go to Money Changer and convert his currency into your currency. For example, if a person come from USA to UK, he have US Dollars and he needs to convert into Pound Sterling. So, when he go to Money Changer to convert the currency then there will be 2 trades in it as follows:
Trade 1: He give US Dollar to Money Changer or in other words, he sale US Dollar.
Trade 2: He take Pound Sterling from Money Changer or in other words, he buy Pound Sterling.
Difference In these two trades of Selling and Buying produces small saving for Money Changer which is called Profit. Similarly, a lot of persons come to Money Changer to convert the currency and at the end of the day these small savings or profits become a huge profit for Money Changer. Forex Trading is exactly same kind of business in which you trade in currencies. You buy one currency and sale other.
In Money Changer business, there is less profit because you deal in local currency, no of persons for converting currencies are less, business market is relatively small so business volume is little as well. Also, rates changes after a day which means you do not know whether value of the currency will rise or fall.
In contrary to this, such things do not happen in Forex Trading. Since this business operates internationally at the same time, so the rates changes in every second, its market and its participants are the whole world and it is opened 24 hours, therefore,you can achieve your target profit in 15 minutes. In Forex Trading, apart from currencies, you can trade in Gold, Silver, Oil and the other commodities.
How To Start The Business?
Having understood the Forex Trading business, next step is how to start this business. For example, for money Changer business, along with good capital, you need a office in such an area where you expect a large number of people to come for currency converting. You also need a high level of security. And above all, you need to get registration from government authorities and work any financial organization.
Exactly same is required for Forex Trading Business. You need to get registered with a company that is not just good in their business but also give such benefits that is helpful for the growth of your business. To find such company for the registration, you have to consider the following factors:
- Initial Amount to Open Account
- Methods to Deposit / Withdraw Funds
- Forex Trading Software
- Customer Service
- Commission and Fees
- Market Prediction, Analysis Reports
1) Initial Amount to Open Account: Just like any other business, you need initial capital to start Forex Trading business. But, in this business the initial investment is not that much as compared to other businesses. This is because, if you get lost, then you do not loss a lot of money. Therefore, you search for company that opens you Forex trading account with minimum amount of money.
2) Methods to Deposit / Withdraw Funds: Another important factor is to analyze what are the methods used to Deposit and Withdraw the funds. There are different methods available including Bank Transfers. You have to look for the best method for you that should be safe enough as well.
3) Forex Trading Software: You earn money by using Forex Trading Software. Therefore, the software should be so simple and easy to use that you understand it in a short while. You seek company whose Forex Trading Software is small in size, easy to install with minimum configuration.
4) Customer Service: It is necessary that the company should have best customer service experience. Its attitude towards clients should be nice and positive, clients email should be respond immediately and online chat service is also available.
5) Commission and Fees: Good Forex Companies do not charge their clients to open Forex Trading Account with them. They also do not charge any hidden commission or fees during Forex Trading.
6) Spread: Important factor that you understand while Forex Trading is Spread which means different between Sell and buy of currency. This difference can be from 0 to 6. For Example, you want to buy US Dollar which is at price of 1.3104 and when you want to sell US Dollar which is at price of 1.3101, so the difference between the Buy and Sell rates is 3. In Forex language, this is called Spread. A good company always offer less spread which results in more profit for your Forex Trading business.
7) Market Prediction and Analysis Reports: For Forex Trading, apart from personal experience, you require latest trends in market and situations in different countries. If you are not aware of upcoming situations, then you cannot do successful Forex Trading. Therefore, you need such a company that also predicts the Forex market based on news and its analysis.
8) Spillage: For example, you placed an order to buy US Dollar at price of 1.3104, but instead, this order is not executed instantly and your order is placed at 1.3109 or above, this will result in loss of your trade. Therefore, you require such company that execute your order instantly and do no let you loss due to delay in order execution.
These were the key factors for any Forex company. We, at CF Merchants, contains all such good characteristics. Therefore, we encourage you to start you Forex Trading Business with us today.