So today I will talk about 3 most common forex instruments.
The most common forex instruments that almost all traders choose are:
This is simply currency trading. You buy a currency with another currency. This exchange usually lasts for only one or two business days.
Traders make profits from spot transaction by buying low then selling high.
Forwards transactions will last for at least 3 business days. The buyer and the seller will make an agreement on what price they will exchange. The agreement can predict even up to a year.
Therefore, no matter how the market goes, you will be safe because the price is decided in advance.
A future transaction is basically the same as forwards transaction. However, there will be more things to be decided than just exchange rate.
In this contract, the currency amount, the maturity date, as well as the interest amount will be pre-determined. This contract often lasts for 3 months.
HOW BEGINNERS SUCCEED IN FOREX
Once you choose wrong, you can easily lose all the money you invest in.
But it is a different case for beginners as they only put a small fund so brokers will not cheat them.
Therefore, $100 or less is the amount that I believe new traders should deposit in the early stage (3 months), because you won’t need to care about the trading cost if you only put a small fund into the broker.
Small trading lot required
I hate to repeat the “95% of new traders will lose” but I want to remind you to keep your feet on the ground.
When you start trading, it is better to open as small positions as possible.
100,000 USD is the standard lot and yes, it is too much but you can still trade with Micro account which allows you to open positions with the lowest amount of 0.00001 Lot USD such as XM.
Exness and FSB also have Cent accounts with the minimum lot trade of only 0.0001 Lot USD.
When you trade with Micro account and Cent account, you should only deposit maximum of $10 for a month of practicing, and if you win, you can withdraw the winning money as well.
Moreover, brokers don’t set minimum deposit requirement for these accounts so you can freely deposit whatever amount you want.
Good local support
When I started trading, I also encountered some simple and stupid problems like installing MT4, login or Credit Card 3D security so I think many new traders will face the same problems as well, …
… so I would be much easier and faster if brokers can support new traders in their local languages.