Frequently asked questions on forex trading

5 Trading Questions Every Traders Asks (and how we'd answer them)

What would a broker offer for the traders?

A forex broker should offer a platform to trade along with various features and a trading account. It would be better if there are several options to choose the type of trading account. For instance, a person living in South Africa can choose anyone from the brokers with zar account as it would be easy to trade with their national currency as the base one. 

What are the factors to consider when you choose a forex broker?

You should consider a lot of factors when choosing a forex broker to have a better experience trading with them. Some of these considerations are as follows,

Regulation – You should ensure that the broker is regulated by any of the forex regulatory bodies. If regulated, you can ensure that the broker would not involve in any scam activities and your money could be safe. 

Platform – You could not involve in trading with the currency pairs if there is no platform to do so. All the brokers would offer you a platform to trade and you should make sure that the platform is user-friendly and you get several features that are helpful for your trading sessions. 

Additional benefits – Your broker should be experienced enough to provide you some insights and predictions for the market movements helping you to trade better. Some brokers would let you trade with some additional benefits like demo accounts, different account types, and other features to reduce your losses. 

Customer support – It is advisable to choose a forex broker who would be in contact with you whenever you want and clear your doubts. 

What is leverage in forex trading?

Leverage is nothing but an option available for the traders to buy a currency pair even they do not have the required amount in their wallets. The broker would be the lender and there would be several formalities for the process. 

What is meant by a currency pair?

A currency pair is nothing but the set of currencies you choose to either buy or sell according to your predictions for the changes in their values. For instance, USD/AUD is a currency pair, where USD is the base currency and AUD is the counter currency. There are some types of currency pairs as follows,

Major pair – A pair with USD

Cross pair – A pair without USD

Exotic pair – A pair consisting of less-popular currencies

What is the maximum amount of money that you could lose in the forex market?

Like all other financial trading markets, the forex market could also erase your investment till it goes close to zero. However, you need not worry about losing more than you have invested. You will not go to a situation where you have to pay the broker an extra amount as your investment has gone zero but the trade is going in a negative direction. The forex brokers would end your trade when your investment is eroded completely due to the loss in the trade.