A foreign exchange trader or Forex trader, is a person who traders, buys and/or sells currencies on the foreign exchange. In other words, it is a currency trader.
Currency traders include professionals employed to trade for a financial firm or group of clients. But, they also include amateur traders who trade for their own financial gain either as a hobby or to make a living.
There are things you need to know about Forex currency trader according to thebalance.com.
How the Forex Market Works
The majority of the world’s currency is traded through this huge, highly decentralized marketplace. The Forex market has several trading centers, but the main ones are located in Tokyo, London, and New York. This allows the market to operate 24 hours per day.
The most well-known currencies represented by three-letter abbreviations. For instance, USD for the U.S. dollar, EUR for the euro, so the abbreviation is EUR/USD.
How to Become a Forex Currency Trader
There are three ways to trade foreign currency exchange rates, namely on an exchange regulated by the Commodity Futures Trading Commission, on an exchange regulated by the U.S. Securities and Exchange Commission, and in the off-market exchange (over-the-counter trades).
If you currently have a brokerage account, it’s likely you can begin Forex trading through your stockbroker. In most cases, you just need to simply fill out a short online currency-trading application. If you’re opening a new Forex account, you’ll begin by making a small deposit.
Currencies on the Forex always come in pairs. As the value of one of the currency pairs rises, the other falls. Most beginning traders should trade only the most-widely traded currencies, such as the U.S. dollar, the British pound (GBP), or the euro because they tend to be the most liquid and have the smallest spreads.
The forex spread is the charge that the trading specialist, effectively a middleman, charges both the buyer and seller for managing the trade.
One thing you need to highlight is that some brokers will allow you to open an account with as little as 50 of your base currency, though they may recommend you deposit more in order to have more flexibility and risk management with trades.
