Maybe you already have experience trading stocks, and are now looking for ways to diversify your investment portfolio. Or, maybe you’ve been fascinated at how events in one part of the world – such as the recent Brexit vote in the UK – can reverberate in currency markets around the world. That could mean you’re ready to trade forex.
Getting started in the forex market is easier than it sounds. For one, if you already have experience trading stocks, the process of setting up a forex brokerage account is similar. There’s just one main difference – when you sign up for an account, you will also need to sign a margin agreement.
This is because leverage is an important part of the forex trading world. When you trade stocks, every $1 of risk capital is used to trade $1 in stocks. However, in the forex world, every account has a certain amount of leverage, usually 50:1 or higher. That means