Online forex refers to the trading of foreign currencies through the internet. Forex is derived from the terms foreign (for) and exchange (ex). Most of the time, forex is abbreviated into a simplest form FX.
The traders can either sell the currency at a higher rate to make profit or exchange it by buying different currencies. The purpose of the forex trading is to buy the currency at the lowest possible price and sell it for a higher price so that you can make profit.
Forex trading is conducted through the forex accounts which are managed by the forex brokers. There are several types of forex accounts. Some brokers introduce demo accounts to demonstrate the execution method of the account. The most popular types of forex trading accounts include forex mini account, forex full account, and forex managed account. Mini accounts require lesser initial deposit. In addition, it offers more risk customizations. Forex mini account is suitable for beginners that are new to the foreign exchange market. Managed account is an account that is maintained by a hired money manager. In a managed account, the money manager will trades the forex account based on the demands of the clients for a fee.
Before trading, you should learn the basics of forex. You should become familiar with the industry terms used in forex trading. Once you understand forex, you can open a new account. As a beginner, you should start with a small opening amount, for example $250.
For online forex trading, you can trade by yourself or through a broker. It is recommended that you hire a broker and let him manage the account for you. The broker will guide you through the forex trading process. Whenever you have problem, you can tell the broker and he will help you. Unlike traditional forex trading, online forex trading allows you to trade 24/7 throughout the year.
You can trade in many types currencies for example EUR/USD, and USD/CHF. If you are buying USD/CHF, you are selling it in the quote CHF currencies. In this case, the USD is the base currency. Trader will buy the base currency when it increase in value so that they can sell it for more money. This is called long buy. To sell, the value of the base currency must decrease so that you can purchase it at a lower price. This is called short sell.