By creating a forex account you can partake in all leading financial markets across the world. With over 3 trillion dollars traded daily in the U.S. foreign exchange markets that are bigger in both volume and price than the combination of U.S. stock markets and U.S. commodity markets.
If you want to participate in this huge market, you must open an account with a repduted forex broker. Here are the tips on opening such an account.
· Check broker reviews – First of all, you need to go through broker reviews. There are many sites like Elitetrader and Trade2win where you can find reviews on various brokers written by people having personal experience with them. from those reviews, you can get a clear idea of different broker firms in terms of the reliability of the software they offer, customer care and withdrawal process.
· Find a broker registered as FCM – You should find and work with a broker registered as Futures Commission Merchant or FCM broker. FCM is regulated by Commodity Futures Trading Commission or CFTC and a member of National Futures Association. When it comes to forex market and thus the brokers, they are lot less regulated in comparison to the stock market and its brokers. Therefore, make sure you choose one that is a member of at least one or two of these organizations. Unlike banks, your dollars are not federally insured with the forex brokers and thus you must not work with a non-registered broker.
· Fill out application form – Fill out the online application form available on the broker’s official website. You can, however, obtain printout of the form and fax the form in. All you require to give your name, contact address, level of trading experience and bank details for monetary transaction.
· Send in identity proofs – In order to create forex accounts you’re required to send in proofs of two types of identification. You need to send in copy of photo ID like driver license and bill or bank statement as proof of residential address. Brokers typically don’t accept cell phone bill as identity proof. You need to fax these documents to the respective broker’s email address provided on the form and on the website as well.
· Deposit the money – After you send in the filled out application form, you will need to wait for 3 to 5 days for getting your application processed and accepted as well. Once the application is accepted, you will be provided with a login ID along with the deposit options. Many online forex brokers accept both wire transfer and credit card options. There are some firms that require a deposit of only $25, while there are brokers that require the customers to deposit 2,500 USD in the trading account before they can start trading. The minimum requirement criterion varies greatly from broker to broker.
Discussed above are some points that you must observe before opening forex accounts with any of the reputed forex brokerage firms.