Forex trading is an intriguing financial opportunity for those hearing about it for the first time. The prospect of trading large amounts of high money sparks the imagination, but most who find the prospects of this market attractive soon discover they are surrounded by online promotion and exaggeration.
Typical Requirements to Get Started
The first thing you will do is set up an account with a forex broker. You will need to provide a lot of personal information to set up your account, including the following:
- Name
- Address
- Phone number
- Account currency type
- Trading account password
- Date of birth
- Country of citizenship
- Social security number or tax ID
- Employment status
You will also need to answer some financial questions, such as:
- Annual income
- Net worth
- Trading experience
- Trading goals
Industry Compliance
You may wonder why forex brokers want to know all this information. The simple answer is legal compliance. The forex trading market has a relatively low degree of regulation, but in recent years, more regulations have been put in place to provide a degree of protection or assurance for account holders. Additionally, forex brokers need to ask these questions to protect themselves from loss risks. They want to ensure that clients who exceed their risk tolerance will be able to cover any unexpected losses.
You are unlikely to find any broker willing to open your trading account without asking you to answer these questions. If you happen to find a broker that doesn’t ask many questions, you should be suspicious. If at any time you feel concerned about a specific broker, you can research them through the National Futures Association to check their status.
Forex Trading and Risks
During the final steps of opening your account, you will see risk disclosures. Please take these disclosures seriously. Forex trading can be challenging for beginners. It tends to eat them for dinner if they are not careful. There are generally more losers than winners on average. The broker is required to remind you of the risks involved in forex.
Once you submit all your information for processing, the broker will verify it and often ask you to send some verification documents like a government-issued ID, and perhaps a utility bill to verify your name and address. This can slow the process down by a few days, but there is no need to worry.
Once your information is verified, you can fund your account and start trading. One common piece of advice for new traders is to not put any money in the trading account that you cannot afford to lose.
This seems like obvious advice, but some people start to feel they know more than they do and take unnecessary risks. Start with a reasonable amount of money and trade in small quantities. Nothing can prepare you for the emotions you feel when your money is truly at risk, so start slowly at first.
Forex Trading Should Be Boring
Forex trading seems very exciting, but in reality, it should be boring and straightforward. If you find yourself feeling extremely anxious when making trades, be cautious. It’s common to become overly excited about winning trades or turn into a destructive trader over losing trades.
It would be best to learn how to make trades using research and systematic logic rather than relying on emotion to guide your trading. Forex trading should involve simple and systematic decisions with precautionary steps in case of failure. Although this may seem boring to you, you will last longer if you approach the market this way.
Stay Calm
If you find yourself making common mistakes in forex trading and feeling frustrated overall, stop trading and review the basics again. Forex trading is one of those industries where people need to reassess their methods from time to time to ensure they are meeting their desired goals. Try not to feel too frustrated and remain methodical and rational in your approach.
Source:
https://www.thebalancemoney.com/how-to-open-a-forex-trading-account-1344881
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