Day Trading Forex
Forex or FX is an acronym of Foreign Exchange and Forex day trading means to trade on this market. Day trading takes place by predicting how one currency performs against another in a Forex pair. It is the largest market in the world with average daily trading volumes exceeding trillions of dollars.
For those who know what they are doing, Forex day trading can be a very profitable activity although it doesn't come without risks. To get the best out of your trading experience, it is critical that you choose a Forex broker that can offer you everything you need from demo platforms to educational tools.
Selecting the right broker can be a time-consuming process. That is where we come in. Our team of experts scour the internet reviewing and rating all of the Forex brokers so that we only present you with the best of them. It is then up to you to make an informed decision as to who to trade with.
In this article, you will learn:
- The top features when selecting a broker
- All the different bonuses, deals and offers
- How choosing a broker impacts your profit
Benefits of Using a Top Broker
There are many benefits to using a good Forex broker. It can mean the difference between a good day trading experience and a not so good one. We take a look at the key features to look out for when selecting the best one for you.
Some brokers offer more currency pairs than others. For many, they like to deal with the major currencies and perhaps some of the minor ones. Other brokers will provide more than 300 currency pairs. If an extensive range is essential to you, then this is something to consider.
Licensing And Regulation
Making sure that your investment is safe is paramount to many traders. You need to know that your money is not going to disappear into a black hole, never to be seen again. To ensure that you select a trustworthy and reliable broker, confirm registration with the regulator in their country of origin. CySEC licenses many brokers in Cyprus with this regulation carrying a lot of weight in the industry.
To be able to test the platform is an essential factor. You need to be sure that you don't waste your money just by making mistakes and misreading an unfamiliar platform. A demo account with virtual funds usually has a limited period of use. A demo account is an excellent way to get used to day trading before you risk any of your funds.
Trading on The go
If a Forex broker doesn't have an app or a mobile-friendly website, then you aren't going to be able to trade on the go. If you, like many others, don't want to be tied to one location on a laptop or computer, or restricted by lack of internet access, then you need to make sure that you can access the website on a mobile phone or tablet. It is very unusual now for brokers not to have an excellent mobile offering.
Forex Bonuses And Deals
Forex brokers are all competing in a very saturated market for the same business just like binary options brokers. They all want you to open an account with them and to do so they offer incentives. These incentives take the form of welcome bonuses to entice you to open an account. When you compare most brokers, the rewards are all very similar.
Now more than ever, brokers are offering a no deposit bonus to encourage you to try the website. A no deposit bonus is ideal for new traders as it allows you the option to try before you buy. A no deposit bonus combined with a demo account gives you the opportunity to get some Forex day trading experience before you spend your own money.
Often you will find a no deposit bonus of around $25-$50 will be available. However, these may differ. Another common form of reward is the deposit bonus. The no deposit bonus is made up of a percentage of the amount that you deposit and can be as high as 100% or a match-deposit bonus.
Withdrawals can only take place once you trade the bonus a certain number of times. You can't just open an account, get the bonus and run. You are also expected to make a cash deposit within a particular time frame as another condition of withdrawing the bonus.
How Forex Trading Works
Forex day trading works by selecting currency pairs and predicting the performance of one currency against another. There are many different currency pairs to choose from, but they fall into three main categories:
The main currency pairs tend to produce lower spreads but are more straightforward to predict than exotic pairs which tend to have larger spreads. To put it in basic terms you are dealing with two currencies per trade. Let's take a look at the GBP/USD pair. GBP/USD means that you are selling GBP in return for USD. The spread is the money that you make from the trade.
Knowing when to sell is the key to successful day trading. Waiting until the spread is at its highest will return the best profit, and this is when you need to have confidence in what you are doing. This confidence will come with practice.
For those who know what they are doing, Forex day trading can be a very profitable activity.
How to Find The Right Broker
That is the easy bit. If you use our helpful advice and recommendations, you will have no trouble in selecting the right broker for you. You can spend time trawling the web looking at all the different brokers, but it will take you hours, even days to complete. Instead, we do it for you.
Our team of experts scour the internet looking at all of the Forex brokers and testing them all out to ensure that we only bring you the best. We aren't just looking for online reviews from others. We trade on the platforms to get the first-hand experience. We don't put our name to anything that we haven't tested out first ourselves.
When we review a broker, we are looking at everything mentioned above plus so much more. You need to know that your money is safe, that you will get good payouts, that the customer service is excellent and that the platform is easy to use. Our tests involve us day trading on the platforms, as well as researching what we can about them to make sure that we give you a full and frank review of what they have to offer.
We then rate and recommend based on our findings, making your task of choosing so much easier. Rather than choosing from hundreds, you can narrow down your selection to a few and then select the best. If you want the best Forex day trading experience then picking the right broker is vital.
Frequently Asked Questions
Is Forex day trading regulated and safe?
Forex day trading is legal in most countries; however, in some, stringent rules govern it. Your money is safe as long as you choose your broker carefully.
Can I trade without downloading software?
Yes, in most cases you will be able to log on and start day trading. Most brokers don't require you to download software unless you are using trading software like a robot trader.
Do I need to start trading with real money?
No, you can start day trading without using real money in two different ways. Firstly, you can choose a broker that offers a demo account. Secondly, you can open an account that provides a no deposit bonus.
How can I make deposits and withdrawals?
Making deposits and withdrawals is easy. Depositing using debit/credit cards, wire transfer or e-wallets like Paypal is commonplace. The withdrawal is sent to the original deposit payment method usually.
What is a Forex broker welcome bonus?
A Forex welcome bonus is a bonus that you receive for opening an account. Often it is a no deposit bonus which means that you don't have to deposit to secure the incentive.
Shane’s contributions to the site have proven incredibly popular, and he’s been with us since 2014. Having a background as a Money Manager for five different brokers, three of them household names, it’s clear that Shane has the substance to back up the knowledge he shares.