Why You Need A Forex Account To Trade
A forex account is an account used to hold and trade foreign currencies. Typically, you open an account, deposit money denominated in your home country currency, and then buy and sell currency pairs.
Your purpose, of course, is to make money on your trades. Unfortunately, the majority of forex traders lose money; the average length of a forex trading account is only about four months. This doesn't mean that the forex is a scam as some critics have maintained, but forex scams do abound.
Making money on highly-leveraged currency trades is harder than it looks and, at a minimum, requires developing an expertise that many novice traders fail to acquire.
How You Open a Forex Trading Account
The requirements for opening a forex account have become simpler since the growth of online forex trading. Today, Opening a forex account is almost as simple as opening a bank account.
First, of course, you'll need to find a forex broker -- all retail forex trading goes through and is managed by a brokerage, which may be a specialized forex broker or the same brokerage you use for stock market investing and trading.
You'll need to fill out a brief questionnaire about your financial knowledge and trading intentions. You'll also need to provide an ID and the minimum deposit your forex account institution requires. That's it. You're now free to trade. Incidentally, many forex brokers will take your credit or debit card in lieu of cash, so, you really don't need to deposit any money at all -- not that this is a good idea.
If you don't have the cash now, how will you pay for losses later? Credit card debt carries high-interest rates.