Do I need a broker?

If you want to trade in forex, you will need a broker simply because trading is not the same as a one time currency exchange you do at your bank before travelling to another country. The forex market is considered the ideal place to trade.

The top reasons are:
1. Currencies are ever-changing. You need a trading platform that can provide you currency values in near real-time.

2. Leverage is another reason to choose a broker. You need $10,000 or more to start trading currencies and brokers lend you money up to a ratio of 1:500 (we do not recommend taking more than 1:100) so that you can start a trade with as little as $20.

3. Regulatory compliance is an important part of forex trading. As an individual, it is not practical to get regulated. So operating through well regulated forex brokers is necessary.

4. Charts and technical indicators are necessary tools for trading. Forex brokers have these integrated into their trading platforms.

Comparing stocks to forex is the easiest answer to forex trading. Most of us think of stocks when it comes to trading and investing. This is a big mistake! Stocks are ideal vehicles for investment. The value of a company rises steadily with performance and over years can give you handsome returns. However, if you trade on stocks you might get stuck in a trade simply because the prices are volatile and the market not as liquid as forex.

Before you open a forex account and start tracing price charts, there are few things you need to do. First let's set reasonable expectations. Do not use money you have set aside for any activity or investment over the next 3 years. That would be a gamble. Also, since you are new at this, it's better to start small or even better with a practice demo account.

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