How to trade forex for free

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How to start trading forex (4 steps)

Welcome to the world of forex. There might be many reasons why you are reading this article. It could be that your friend or acquaintance mentioned about how they trade and perhaps even make a living by trading forex. Whatever your reasons may be; this article will give you an overview of the forex markets and how to start trading forex … and perhaps make money for yourself.

Step 1. What is forex?

Step 2. Learn forex basics

Step 3: find a forex broker

Step 4: start trading

Step 1. What is forex?

Forex, or foreign exchange is an unregulated market, also known as OTC (over-the-counter) and is the biggest market with average daily turn-over that runs into billions. It is even bigger than the US stock markets. Although due to its OTC nature, no one can really give the correct numbers as to the forex turnover. But nonetheless, forex is indeed a big market and thus allows many market participants. From your neighborhood bank to specialized investment companies, to your friend; the forex markets always offers a piece of the action whoever you are and wherever you are (even from your home).

The basic concept of trading forex is very simple. You trade or speculate against other traders on the direction of a currency.

So, if you believe that the euro is going to rise, you would BUY the euro, or SELL the euro if you think the euro would fall. It’s as simple as that.

Step 2. Learn forex basics

Before you get ready to deposit your funds and start trading there are some important points you must understand, each of which are outlined below.

Forex brokers: in order to start trading forex, you will need to trade with the help of a forex broker. There are many forex brokers out there today who allow you to open a forex trading account for as little as $5. The forex broker is the one who facilitates your buy and sell orders and also allows you to research into the markets (also known as technical or fundamental analysis) to help you make more informed decisions… and of course allows you deposit more funds or withdraw your profits when you want to. ( click here to see our forex brokers rating )

Trading platform:you need a trading platform from which you can place your trades, which are then sent to the broker for settlement. Also, a trading platform is essential for you to conduct your technical analysis and also to see the current market prices. Most retail brokers offer the MT4 (short for metatrader 4) trading platform, which is free of cost. You can also open a demo trading account and practice trading with virtual money to gain the experience required before trading with real money.

Forex trading hours:while you might have heard that the forex markets never sleeps, it actually does. Firstly, you won’t be able to trade on weekends (saturday and sundays). But for the rest of the week, the forex market operates 24 hours a day. This is due to the fact that forex trading is global. At any point in time, you will always find an overlap of a new market session while the previous market closes. What time of the day or which market session you trade plays a big role if you are an intra-day trader or a scalper. This is another vast topic, which we will cover at a later stage. ( click here to learn more about forex trading hours . )

Now that you have a basic overview of the forex markets, here are some final pointers to remember before you start trading for yourself.

What is a pip?:pip is a measure of change in a currency pair’s value and is the 5 th decimal. For example, if EURUSD changes from 1.31428 to 1.31429, the change is denoted as 1pip (1.31428 – 1.31429 = 0.00001). When you trade, the more pips you make, the more profit you have. Ex: buying EURUSD at 1.31428 and selling (or closing your trade) at 1.31528 would give you 100pips in profit. ( read more about forex PIP )

Reading quotes: forex quotes are presented in a bid and ask price (both of which vary by a few pips and from one broker to another). The bid price is the price at which you can buy and the ask price is the price as which you can sell. So, a EURUSD quote would look like this 1.31428(bid)/1.31420(ask).

What is a spread?: spread is nothing but the difference between the bid and ask price. So in the above example, for 1.31428/1.31420, the spread would be 8 pips. ( read more about forex spread)

What is a leverage?: leverage is the amount by which you can request your broker to magnify (or increase) your trade value. Leverage is often quoted in ratios such as 1:50, which means that when trading on a 1:50 leverage, your $100 is magnified to $50000. Leverage is a big topic in itself and it is recommended to read this article to learn more. Leverage is important both in terms of making profits as well as managing risks and therefore, your trades.

What is a lot?: A lot is a unit by which you place your trade. In financial terms, a lot is also referred to as a contract. There are preset lots (or contract sizes) that you can trade. For example a standard lot is nothing but 100,000 units (known as 1 lot). ( read more about lot)

Reading charts: the ability to understand and read the charts is very essential to trading. Depending on your approach, you can choose between a line, bar or candlestick charts and trade accordingly (for example trading based on candlestick patterns). ( read more how to read forex charts)

Placing orders (how to buy and sell): in forex trading, it is possible to either buy or sell any currency pair. Most trading platforms, give you this option. You buy when you think that price will go up and you sell when you think that price will fall. There is a common terminology used in forex trading, which is buy low, sell high; which is an important point to remember. ( read more how to place orders with MT4 )

Order types: besides buy and sell, another point to remember the types of orders. There are two basic order types: market orders and pending orders. When you click on ‘buy’ or ‘sell’ you are basically buying (or selling) at the current market price. A limit order on the other hand tells the broker that you want to buy or sell only at a particular price. ( read more about types of forex orders)

Step 3. Find a forex broker

As mentioned, there are many forex brokers today and therefore it can get confusing on how to choose the forex broker that is right for you. To briefly summarize, remember the following points while choosing a forex broker:

Look for a forex broker that is regulated

See if the forex broker offers a minimum deposit amount

What is the leverage that the broker offers

What is the minimum contract size that you can trade

Bonuses and the terms and conditions (see on our site list of forex deposit bonuses and forex no deposit bonuses)

Deposit and withdrawal types as well as the terms and conditions

Trading methods that are allowed by the broker

We can also help you choose a forex broker by reading our article how to choose forex broker

Step 4. Start trading

Finally, now that you have selected a forex broker to trade with it is recommended to first open a demo trading or a practice account. Most forex brokers offer unlimited demo trading account (but will be deactivated if not used for 30 days). This is a good way to get acquainted with the forex markets and also help you to understand your trading style (scalper or intra day trading, swing trading, etc) and approach (fundamental or technical analysis). You can search for various trading methods and systems or you can develop one yourself when you have a good understanding of technical or fundamental indicators.

Conclusion:

Forex trading is one of the most active and dynamic ways to trade the financial markets. At the heart of everything, it is the basic fluctuations in currency values which drives everything else. Learning to trade forex and understanding the forex markets can give a good foundation to trading other markets such as derivatives or equities.

Forex trading: A beginner's guide

Forex is a portmanteau of foreign currency and exchange. Foreign exchange is the process of changing one currency into another currency for a variety of reasons, usually for commerce, trading, or tourism. According to a recent triennial report from the bank for international settlements (a global bank for national central banks), the average was more than $5.1 trillion in daily forex trading volume.

Key takeaways

The foreign exchange (also known as FX or forex) market is a global marketplace for exchanging national currencies against one another.

Because of the worldwide reach of trade, commerce, and finance, forex markets tend to be the largest and most liquid asset markets in the world.

Currencies trade against each other as exchange rate pairs. For example, EUR/USD.

Forex markets exist as spot (cash) markets as well as derivatives markets offering forwards, futures, options, and currency swaps.

Market participants use forex to hedge against international currency and interest rate risk, to speculate on geopolitical events, and to diversify portfolios, among several other reasons.

What is the forex market?

The foreign exchange market is where currencies are traded. Currencies are important to most people around the world, whether they realize it or not, because currencies need to be exchanged in order to conduct foreign trade and business. If you are living in the U.S. And want to buy cheese from france, either you or the company that you buy the cheese from has to pay the french for the cheese in euros (EUR). This means that the U.S. Importer would have to exchange the equivalent value of U.S. Dollars (USD) into euros. The same goes for traveling. A french tourist in egypt can't pay in euros to see the pyramids because it's not the locally accepted currency. As such, the tourist has to exchange the euros for the local currency, in this case the egyptian pound, at the current exchange rate.

One unique aspect of this international market is that there is no central marketplace for foreign exchange. Rather, currency trading is conducted electronically over-the-counter (OTC), which means that all transactions occur via computer networks between traders around the world, rather than on one centralized exchange. The market is open 24 hours a day, five and a half days a week, and currencies are traded worldwide in the major financial centers of london, new york, tokyo, zurich, frankfurt, hong kong, singapore, paris and sydney—across almost every time zone. This means that when the trading day in the U.S. Ends, the forex market begins anew in tokyo and hong kong. As such, the forex market can be extremely active any time of the day, with price quotes changing constantly.

A brief history of forex

Unlike stock markets, which can trace their roots back centuries, the forex market as we understand it today is a truly new market. Of course, in its most basic sense—that of people converting one currency to another for financial advantage—forex has been around since nations began minting currencies. But the modern forex markets are a modern invention. After the accord at bretton woods in 1971, more major currencies were allowed to float freely against one another. The values of individual currencies vary, which has given rise to the need for foreign exchange services and trading.

Commercial and investment banks conduct most of the trading in the forex markets on behalf of their clients, but there are also speculative opportunities for trading one currency against another for professional and individual investors.

Spot market and the forwards & futures markets

There are actually three ways that institutions, corporations and individuals trade forex: the spot market, the forwards market, and the futures market. Forex trading in the spot market has always been the largest market because it is the "underlying" real asset that the forwards and futures markets are based on. In the past, the futures market was the most popular venue for traders because it was available to individual investors for a longer period of time. However, with the advent of electronic trading and numerous forex brokers, the spot market has witnessed a huge surge in activity and now surpasses the futures market as the preferred trading market for individual investors and speculators. When people refer to the forex market, they usually are referring to the spot market. The forwards and futures markets tend to be more popular with companies that need to hedge their foreign exchange risks out to a specific date in the future.

More specifically, the spot market is where currencies are bought and sold according to the current price. That price, determined by supply and demand, is a reflection of many things, including current interest rates, economic performance, sentiment towards ongoing political situations (both locally and internationally), as well as the perception of the future performance of one currency against another. When a deal is finalized, this is known as a "spot deal." it is a bilateral transaction by which one party delivers an agreed-upon currency amount to the counter party and receives a specified amount of another currency at the agreed-upon exchange rate value. After a position is closed, the settlement is in cash. Although the spot market is commonly known as one that deals with transactions in the present (rather than the future), these trades actually take two days for settlement.

Unlike the spot market, the forwards and futures markets do not trade actual currencies. Instead they deal in contracts that represent claims to a certain currency type, a specific price per unit and a future date for settlement.

In the forwards market, contracts are bought and sold OTC between two parties, who determine the terms of the agreement between themselves.

In the futures market, futures contracts are bought and sold based upon a standard size and settlement date on public commodities markets, such as the chicago mercantile exchange. In the U.S., the national futures association regulates the futures market. Futures contracts have specific details, including the number of units being traded, delivery and settlement dates, and minimum price increments that cannot be customized. The exchange acts as a counterpart to the trader, providing clearance and settlement.

Both types of contracts are binding and are typically settled for cash at the exchange in question upon expiry, although contracts can also be bought and sold before they expire. The forwards and futures markets can offer protection against risk when trading currencies. Usually, big international corporations use these markets in order to hedge against future exchange rate fluctuations, but speculators take part in these markets as well.

Note that you'll often see the terms: FX, forex, foreign-exchange market, and currency market. These terms are synonymous and all refer to the forex market.

Forex for hedging

Companies doing business in foreign countries are at risk due to fluctuations in currency values when they buy or sell goods and services outside of their domestic market. Foreign exchange markets provide a way to hedge currency risk by fixing a rate at which the transaction will be completed.

To accomplish this, a trader can buy or sell currencies in the forward or swap markets in advance, which locks in an exchange rate. For example, imagine that a company plans to sell U.S.-made blenders in europe when the exchange rate between the euro and the dollar (EUR/USD) is €1 to $1 at parity.

The blender costs $100 to manufacture, and the U.S. Firm plans to sell it for €150—which is competitive with other blenders that were made in europe. If this plan is successful, the company will make $50 in profit because the EUR/USD exchange rate is even. Unfortunately, the USD begins to rise in value versus the euro until the EUR/USD exchange rate is 0.80, which means it now costs $0.80 to buy €1.00.

The problem the company faces is that while it still costs $100 to make the blender, the company can only sell the product at the competitive price of €150, which when translated back into dollars is only $120 (€150 X 0.80 = $120). A stronger dollar resulted in a much smaller profit than expected.

The blender company could have reduced this risk by shorting the euro and buying the USD when they were at parity. That way, if the dollar rose in value, the profits from the trade would offset the reduced profit from the sale of blenders. If the USD fell in value, the more favorable exchange rate will increase the profit from the sale of blenders, which offsets the losses in the trade.

Hedging of this kind can be done in the currency futures market. The advantage for the trader is that futures contracts are standardized and cleared by a central authority. However, currency futures may be less liquid than the forward markets, which are decentralized and exist within the interbank system throughout the world.

Forex for speculation

Factors like interest rates, trade flows, tourism, economic strength, and geopolitical risk affect supply and demand for currencies, which creates daily volatility in the forex markets. An opportunity exists to profit from changes that may increase or reduce one currency's value compared to another. A forecast that one currency will weaken is essentially the same as assuming that the other currency in the pair will strengthen because currencies are traded as pairs.

Imagine a trader who expects interest rates to rise in the U.S. Compared to australia while the exchange rate between the two currencies (AUD/USD) is 0.71 (it takes $0.71 USD to buy $1.00 AUD). The trader believes higher interest rates in the U.S. Will increase demand for USD, and therefore the AUD/USD exchange rate will fall because it will require fewer, stronger USD to buy an AUD.

Assume that the trader is correct and interest rates rise, which decreases the AUD/USD exchange rate to 0.50. This means that it requires $0.50 USD to buy $1.00 AUD. If the investor had shorted the AUD and went long the USD, he or she would have profited from the change in value.

Currency as an asset class

There are two distinct features to currencies as an asset class:

You can earn the interest rate differential between two currencies.

You can profit from changes in the exchange rate.

An investor can profit from the difference between two interest rates in two different economies by buying the currency with the higher interest rate and shorting the currency with the lower interest rate. Prior to the 2008 financial crisis, it was very common to short the japanese yen (JPY) and buy british pounds (GBP) because the interest rate differential was very large. This strategy is sometimes referred to as a "carry trade."

Why we can trade currencies

Currency trading was very difficult for individual investors prior to the internet. Most currency traders were large multinational corporations, hedge funds or high-net-worth individuals because forex trading required a lot of capital. With help from the internet, a retail market aimed at individual traders has emerged, providing easy access to the foreign exchange markets, either through the banks themselves or brokers making a secondary market. Most online brokers or dealers offer very high leverage to individual traders who can control a large trade with a small account balance.

Forex trading: A beginner’s guide

Forex trading risks

Trading currencies can be risky and complex. The interbank market has varying degrees of regulation, and forex instruments are not standardized. In some parts of the world, forex trading is almost completely unregulated.

The interbank market is made up of banks trading with each other around the world. The banks themselves have to determine and accept sovereign risk and credit risk, and they have established internal processes to keep themselves as safe as possible. Regulations like this are industry-imposed for the protection of each participating bank.

Since the market is made by each of the participating banks providing offers and bids for a particular currency, the market pricing mechanism is based on supply and demand. Because there are such large trade flows within the system, it is difficult for rogue traders to influence the price of a currency. This system helps create transparency in the market for investors with access to interbank dealing.

Most small retail traders trade with relatively small and semi-unregulated forex brokers/dealers, which can (and sometimes do) re-quote prices and even trade against their own customers. Depending on where the dealer exists, there may be some government and industry regulation, but those safeguards are inconsistent around the globe.

Most retail investors should spend time investigating a forex dealer to find out whether it is regulated in the U.S. Or the U.K. (dealers in the U.S. And U.K. Have more oversight) or in a country with lax rules and oversight. It is also a good idea to find out what kind of account protections are available in case of a market crisis, or if a dealer becomes insolvent.

Pros and challenges of trading forex

Pro: the forex markets are the largest in terms of daily trading volume in the world and therefore offer the most liquidity. this makes it easy to enter and exit a position in any of the major currencies within a fraction of a second for a small spread in most market conditions.

Challenge: banks, brokers, and dealers in the forex markets allow a high amount of leverage, which means that traders can control large positions with relatively little money of their own. Leverage in the range of 100:1 is a high ratio but not uncommon in forex. A trader must understand the use of leverage and the risks that leverage introduces in an account. Extreme amounts of leverage have led to many dealers becoming insolvent unexpectedly.

Pro: the forex market is traded 24 hours a day, five days a week—starting each day in australia and ending in new york. The major centers are sydney, hong kong, singapore, tokyo, frankfurt, paris, london, and new york.

Challenge: trading currencies productively requires an understanding of economic fundamentals and indicators. A currency trader needs to have a big-picture understanding of the economies of the various countries and their inter-connectedness to grasp the fundamentals that drive currency values.

The bottom line

For traders—especially those with limited funds—day trading or swing trading in small amounts is easier in the forex market than other markets. For those with longer-term horizons and larger funds, long-term fundamentals-based trading or a carry trade can be profitable. A focus on understanding the macroeconomic fundamentals driving currency values and experience with technical analysis may help new forex traders to become more profitable.

How to trade forex

Luke jacobi

Contributor, benzinga

Want to jump straight to the answer? The best forex broker for most people is definitely FOREX.Com

Many want to make money in the forex market, but few who begin to trade forex want to do the prep work needed to become successful traders. While trading forex has become easier now than ever before because you can trade online via the internet, most novice traders still lose money.

A combination of factors that include unfamiliarity with the market, insufficient trading capital, not trading according to a plan and failing to practice sound money management techniques to preserve trading capital contribute to loss. But, once these inhibitory factors are overcome, just about anyone has a chance at becoming a successful forex trader.

Forex trading step by step:

Step 1: get a device connected to the internet

Step 2: find an online forex broker

Step 3: open an account and fun account

Step 4: download a forex trading platform

Step 5: enter your first trade

Forex trading step by step:

Start with our forex 101 course

Common forex market terms

5 easy steps to trading forex

Forex trading example

Best online forex brokers

Forex trading strategy types

Forex market analysis

Forex trading tutorial

How to develop a forex trade plan

Is forex trading right for you?

Start with our forex 101 course

Our course breaks down forex into 7 digestable sections to prepare you for trading forex in the real world. Check it out.

Common forex market terms

The forex market is a world unto itself and has some substantial differences to other financial markets, such as the stock or commodity markets. As a case in point, forex traders have even developed their own set of jargon terms unique to the forex market.

If you’re serious about learning how to trade forex, you should start to get a handle on forex terminology by reviewing the definitions for common terms used in the forex market below.

Currency pair: two currencies in which the first, known as the base currency, is quoted in terms of the second, known as the counter currency. An example of a currency pair is EUR/USD that represents the EU’s euro quoted versus the U.S. Dollar.

Position: the net amount of a currency pair that provides exposure to movements in that pair’s exchange rate. Forex traders take positions to speculate on exchange rate movements.

Long/short: A position in which one has net purchased/sold the base currency in a currency pair. Long positions are taken when you think the pair’s exchange rate will rise, while short positions are taken when you think the exchange rate will fall.

Pip: an acronym for “point in percentage” that represents the smallest change in a currency pair’s exchange rate. The size of a pip for most currency pairs is 0.0001.

Leverage/margin: leverage is the size of a trading position you can control with a given amount of “margin” or money placed on deposit in your trading account to be held by your broker as collateral against trading losses. The maximum leverage ratio varies considerably among online brokers — ranging from 20:1 to 1,000:1 or more — and can depend on what jurisdiction you reside in.

Exchange rate: the amount of the counter currency required in exchange for one unit of the base currency in a foreign exchange transaction. For example, if the EUR/USD exchange rate is 1.1700, it would cost $1.17 to buy 1 euro.

Risk/reward ratio: an estimated measure of the profit potential per amount risked. For example, a trader might use a 1:3 risk/reward ratio meaning that they are willing to risk $1 to make $3.

Broker: an intermediary firm that executes transactions in financial markets on your behalf. Retail forex traders open trading accounts with online brokers to trade currency pairs on margin.

Order: an instruction given to your broker to execute a transaction for you. You might place an order to buy 100,000 euros versus the U.S. Dollar at the prevailing market via your online broker’s trading platform.

5 easy steps to trading forex

You can take the following steps to prepare yourself to start trading forex:

Step 1: connect a device to the internet.

To trade forex, you’ll need access to a reliable internet connection with minimal service interruptions to trade through an online broker. You’ll also need to obtain a smartphone, tablet or computer to run a trading platform on. If your internet drops while you’re trading, that can result in undesirable losses if the market moves against you.

Step 2: find a suitable online forex broker.

You can probably open an account with an online forex broker no matter where you live. Just look for one that meets your requirements as a trader and will accept you as a client. At a minimum, the broker you choose should keep your money segregated from its own and operate in a well-regulated jurisdiction under the oversight of a reputable regulator, such as the UK’s financial conduct authority (FCA) or the U.S. Commodity futures trading commission (CFTC).

Step 3: open and fund a trading account.

After you’ve decided on a broker, you can deposit funds into a trading account. Most online forex brokers accept a number of ways to fund an account, including bank wire transfers, debit card payments or transfers from electronic payment providers like skrill or paypal.

Step 4: obtain a forex trading platform.

You will need to download or get access to an online forex trading platform supported by your broker. Most forex brokers either offer a proprietary trading platform or support a popular 3rd-party platform like metatrader4 and 5 (MT4/5) from metaquotes.Com or ninjatrader.

Step 5: start trading.

After completing all of the previous steps, you now have a funded forex account and are ready to trade. You can also usually open a demo account funded with virtual money to test out the broker’s forex platforms and services before going live. Demo accounts are also beneficial for testing trading strategies and to practice trading without risking any funds.

Forex trading example

The most actively traded currency pair in the forex market is EUR/USD, which consists of the EU’s euro quoted with the U.S. Dollar. If you thought the EUR/USD exchange rate was going to rise from its current 1.1700 level, then you might purchase €100,000 against the dollar today at that rate. If the EUR/USD rate then rose to 1.2000, you could use this calculation to compute your trading profit:

€100,000 x (1.2000-1.1700) = $3,000

To then convert that amount of U.S. Dollar profit into euros at the current 1.2000 exchange rate, you would use this calculation:

$3,000 ÷ 1.2000 = €2,500

Alternatively, if the EUR/USD exchange rate instead fell to 1.1400, then your trading loss would be:

€100,000 x (1.1700-1.1400) = -$3,000

That loss converted into euros at the prevailing 1.1400 exchange rate would be:

-$3,000 ÷ 1.1400 = -€2,631.58

Best online forex brokers

Your local retail forex regulatory environment will often determine whether international online brokers will accept clients from your country. Check with a broker directly to find out whether they will accept you as a client and make sure they provide all the services and tools you require. Also, make sure the broker is well regulated in their local jurisdiction by a major regulatory authority and segregates clients’ money from its own.

Once you have narrowed your selection down to a few suitable brokers, look over their online reviews and see if they have a relatively satisfied customer base. If you don’t recognize the firm, then see how they compare to a well-known and regulated online broker by checking out this FOREX.Com review. Also, consider opening a demo account to try out its trading platform and services before you fund a live account.

To begin finding a suitable broker, some of the best and most reputable online forex brokers are listed in the table below that all offer excellent services to retail forex traders.

5 places to practice trade forex for free

Practice trading is where you use virtual money to trade under real market conditions. The platforms are usually identical to the real trading platform the only difference is the money you're using is opening simulated positions and not real trades.

In my opinion, practice trading is the best way to learn about forex and trading. So i've put together 5 places where you can practice trade forex completely free. You don't need to spend any money to use these platforms.

Why you should practice trade forex

Learn to use the platform

Forex trading platforms can vary widely between brokers. Many offer proprietary platforms. The last thing you want to do is make a losing trade simply because you couldn't understand how to use the software. So even if you're an experienced trader, I recommend trading using a practice account until you've gotten to grip with opening and closing orders on your platform of choice.

Understand the basics of forex

The best way to learn about trading and forex is to practice trade! You can read all the articles in the world, but nothing will replace actually opening and closing trades on a platform. And of course you don't want to learn using real money. Through practice trading, you'll learn how to open and close trades. You'll learn about using leverage and you'll also learn how to read and understand charts.

Etoro

Etoro is my pick of forex trading platforms. They have a well designed and easy to use web trader and offer one of the largest selections of markets to trade in. You can trade a huge selection of cryptos, stocks from all over the world, commodities, cryptos, etfs and more. Basically if it's tradable it's on etoro.

Etoro also offers copy trading. Using copy trading, you can automatically copy the trades of other users on the platform. You simply browse through the profiles of leading traders and then allocate funds to copy trade. You can copy trade with a practice account on etoro, which allows you to simulate under real trading conditions what copy trading will do.

With etoro I love being able to switch back and forth between my real and virtual trading accounts with a click. You don't need to login and out again which is very nice! This way I can practice some of my riskier ideas in virtual mode and leave my real account for copy trading and safer stock investments.

Disclaimer: 62% of retail investor accounts lose money when trading cfds with this provider. You should consider whether you can afford to take the high risk of losing your money.

If you're looking to practice trade using metatrader, then my goto recommendation is XM. XM offers demo accounts for both the MT4 and MT5 platforms. XM doesn't offer a huge range of markets to trade in – they specialise in forex with limited stock and commodity trading. Once you're done practicing XM offers one of the most professional accounts for forex trading with low spreads and commissions.

Easymarkets

Easymarkets offers a proprietary and easy to use web trading platform. It's perfect for beginners. And yes they obviously offer a free practice trading account. One unique feature that's worth pointing out is the dealcancellation. This feature allows you to cancel losing trades without incurring a loss if done so within 60 minutes. So when you are ready to move over to a real trading account, you have a little extra protection against losing trades.

Plus500

Plus500 offers a pretty well designed web trader platform which will suit beginners. They offer a free practice account which will give you $100k in virtual money to trade with.

Plus500 offers a fairly large range of markets to trade in including forex, stocks and cryptos.

Primexbt

If you're looking to trade crypto or forex then primexbt is a good platform. It's pretty much brand new and is a bitcoin powered platform. You can only deposit bitcoin, but you can also sign up for free and trade using virtual money. This is a great way to test out the platform.

Disclaimer: etoro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading cfds.

Please note that cfds are complex instruments and come with a high risk of losing money rapidly due to leverage. 62% of retail investor accounts lose money when trading cfds with this provider. You should consider whether you understand how cfds work, and whether you can afford to take the high risk of losing your money.

Past performance is not an indication of future results.

Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via cfds, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework.

How to trade forex

Luke jacobi

Contributor, benzinga

Want to jump straight to the answer? The best forex broker for most people is definitely FOREX.Com

Forex trading step by step:

Step 1: get a device connected to the internet

Step 2: find an online forex broker

Step 3: open an account and fun account

Step 4: download a forex trading platform

Step 5: enter your first trade

Forex trading step by step:

Start with our forex 101 course

Common forex market terms

5 easy steps to trading forex

Forex trading example

Best online forex brokers

Forex trading strategy types

Forex market analysis

Forex trading tutorial

How to develop a forex trade plan

Is forex trading right for you?

Start with our forex 101 course

Our course breaks down forex into 7 digestable sections to prepare you for trading forex in the real world. Check it out.

Common forex market terms

If you’re serious about learning how to trade forex, you should start to get a handle on forex terminology by reviewing the definitions for common terms used in the forex market below.

Currency pair: two currencies in which the first, known as the base currency, is quoted in terms of the second, known as the counter currency. An example of a currency pair is EUR/USD that represents the EU’s euro quoted versus the U.S. Dollar.

Position: the net amount of a currency pair that provides exposure to movements in that pair’s exchange rate. Forex traders take positions to speculate on exchange rate movements.

Long/short: A position in which one has net purchased/sold the base currency in a currency pair. Long positions are taken when you think the pair’s exchange rate will rise, while short positions are taken when you think the exchange rate will fall.

Pip: an acronym for “point in percentage” that represents the smallest change in a currency pair’s exchange rate. The size of a pip for most currency pairs is 0.0001.

Leverage/margin: leverage is the size of a trading position you can control with a given amount of “margin” or money placed on deposit in your trading account to be held by your broker as collateral against trading losses. The maximum leverage ratio varies considerably among online brokers — ranging from 20:1 to 1,000:1 or more — and can depend on what jurisdiction you reside in.

Exchange rate: the amount of the counter currency required in exchange for one unit of the base currency in a foreign exchange transaction. For example, if the EUR/USD exchange rate is 1.1700, it would cost $1.17 to buy 1 euro.

Risk/reward ratio: an estimated measure of the profit potential per amount risked. For example, a trader might use a 1:3 risk/reward ratio meaning that they are willing to risk $1 to make $3.

Broker: an intermediary firm that executes transactions in financial markets on your behalf. Retail forex traders open trading accounts with online brokers to trade currency pairs on margin.

Order: an instruction given to your broker to execute a transaction for you. You might place an order to buy 100,000 euros versus the U.S. Dollar at the prevailing market via your online broker’s trading platform.

5 easy steps to trading forex

You can take the following steps to prepare yourself to start trading forex:

Step 1: connect a device to the internet.

Step 2: find a suitable online forex broker.

Step 3: open and fund a trading account.

Step 4: obtain a forex trading platform.

Step 5: start trading.

Forex trading example

€100,000 x (1.2000-1.1700) = $3,000

To then convert that amount of U.S. Dollar profit into euros at the current 1.2000 exchange rate, you would use this calculation:

$3,000 ÷ 1.2000 = €2,500

Alternatively, if the EUR/USD exchange rate instead fell to 1.1400, then your trading loss would be:

€100,000 x (1.1700-1.1400) = -$3,000

That loss converted into euros at the prevailing 1.1400 exchange rate would be:

-$3,000 ÷ 1.1400 = -€2,631.58

Best online forex brokers

To begin finding a suitable broker, some of the best and most reputable online forex brokers are listed in the table below that all offer excellent services to retail forex traders.

Forex trading without deposit | no deposit bonus explained

It’s generally known that in order to get started in forex, you need to put a lot of resources into it. And while these resources can be your time and energy, the most straightforward one is, of course, your money.

It’s no surprise that one regular lot is equal to 100,000 currency units – forex trading is definitely an expensive endeavor. However, there are still some ways in which you can start trading forex while maintaining some sort of profitability without spending hundreds of thousands of dollars.

No deposit bonus in a glance

In forex trading you can, in fact, start trading with no money of your own or even making a deposit. With free no deposit bonus offered by the top forex brokers, you can start forex trading without deposit with a good boost.

There is no sense in hiding the fact that FX trading is risky, especially if you are trading without proper knowledge and at least minimal experience. In an attempt to prevail over the risk of losing your money and to stay safe, it is undoubtedly better to start trading with a free forex account or no deposit bonus offered by various FX brokers. Especially if such deals are not so rare at this time and even best forex brokers sometimes offer such deals.

It is always better to preview all conditions that offer you an option to trade without money of your own. So, be sure to start forex trading without a deposit now and get yourself a good and reliable deal!

But let’s say that although you’ve learned how to start deposit free forex trading, it’s still too risky for you. Thankfully, there is an alternative. One way to start trading with a broker is by opening a free forex demo account for beginners. A demo account will allow you to try your hand at trading on the real market without ever touching real money. One of the best brokers to try a free demo account with would be FXTM. If you don’t want to be working with FXTM and want access to a reliable forex broker that offers its services around the globe, alpari offers a similar service, including forex trading demo accounts. If you are a US citizen that wants to trade with local brokers, then you should go for forex.Com, who offer their services within the US and are known to be one of the best brokers in the world.

Transparent pricing and fast, reliable trade executions on over 80 currencies

Start trading with the largest forex broker in the US

How to start forex trading without deposit: tips & recommendations

As a matter of fact, a lot of brokers worldwide try to offer their clients those no deposit deals, and we’ve even seen some trading apps without deposit popping up here and there. Do not perceive this as an act of generosity though, those bonuses serve as a sort of protection for them also. But still, this is good for you if you want to start forex trading without a deposit.

Here are some of the main considerations that can help you spot a decent no deposit bonus:

If you somehow dislike conditions and terms offered by the broker – simply skip the promotion. Let’s investigate the ways that may help you find the best bonus in FX. First of all, bonuses must be easy to understand and transparent in general conditions. If you see non-explicit information presented, avoid the promotion or ask the broker for clarification.

If you wish to take part in the particular promotion and start forex trading without investment, then do not overlook terms and conditions. Even the smallest detail must be in your sight. A free bonus is actually not always 100% free. Some brokers may ask you to deposit some money in order to collect your profits. Indeed, such promotions are scams.

Be attentive, because some forex brokers can demonstrate a good opportunity with their no deposit bonus, however it may ask to complete the trading volume requirement. Stay away from the bonus that asks to complete more than 1 lot for $10 to further unlock the profits and balance.

Bonuses can vary in terms of geographical location requirements. Therefore, ensure that FX bonus accounts of the broker are given in your country as well if you desire to start forex trading without investment. Furthermore, there can be account restrictions. This means that no deposit bonuses may not always be available for every account at a particular broker. Thus, check whether you applied for a correct account.

In addition, make sure what instruments can be traded to withdraw your profit before you begin trading as sometimes FX bonus accounts are not available for some of them. As for the withdrawal, some forex bonus brokers limit the maximum profit available to withdraw from the account. So, do not miss this field before you start trading on your no deposit FX bonus account.

Bonuses are frequently represented only in 1 currency equivalent. However, there are many no deposit bonuses that evaluate a similar amount in your local currency, so doing your research in order to figure out how to join forex trading without making any deposits is a good way for ensuring success in the long run.

Not ready for live trading? Try IQ option demo account!

Practice your trading skills with free $10,000 practice account!

How to start forex trading without a deposit?

As one of the cases, no deposit bonus may come with SMS verification. It is recommended to make sure that you have the right phone number prior to start applying for the bonus.

One of the last tips that can help you find a trustworthy no deposit bonus, or at least help you get through a scammer, is to save the terms and conditions document as a .Pdf file. Do this even if you deal with the best no deposit forex bonus account. You can use the help of your account manager and ask him to confirm all the statements of the bonus promotion in which you participate.

Start forex trading without deposit: introduction to best no deposit bonuses

Although there are very good no deposit bonuses offered by industry leaders and most proficient brokers, you should understand one fact: FX bonuses without a deposit are most frequently offered by bad brokers. That is the very reason why you should be very careful not to get entangled with a scammer.

All this leads to us stressing how important it is to be attentive at all times, so be attentive to details when researching how to start trading with no deposit bonuses. Fortunately, we have examples of the best brokers/investment firms.

Start forex trading without investment: XM forex broker

To begin with, XM is recognized by the united kingdom-based organization – investors in people for its powerful efforts in developing individuals to realize their entire potential and achieve both individual and corporate goals. We should also admit that this organization provides a huge amount of proven tools and resources specially designed to complement its unique framework with an aim to boost performance and indeed maximize sustainability. XM achieves this standard by showing that it is a driving force in the online trading sector and is committed to the provision of services and products of the best quality. How to start forex trading without money? If you are interested, you can claim the XM 30 USD no deposit bonus!

Get your 30 USD no deposit bonus with XM, and start trading today

*clients registered under the EU regulated entity of the group are not eligible for the bonus

No deposit bonus as an alternative – is it worth it?

So, now that you know what no deposit bonuses are and how they work, one question remains active: is it actually worth it to sign up for one yourself? Will you get any significant benefit from it?

The answer to that question is subjective; some traders can definitely find use in this type of promotion by amassing a small account balance and then turning it into a full-blown trading career. But in order to do so, you need to be very careful not to catch a scammer instead of a legitimate promotion issuer.

As for other traders, they often prefer spending their own money, which gives them more incentive to be more careful in the market – after all, it’s their own money they’re risking.

So, suffice to say no deposit bonuses have their time and place; one just has to seize that exact moment.

FREE ‘beginners’ forex trading introduction course

Welcome to nial fullers free ‘beginners’ forex trading university.

Forex trading 101 – ‘beginners forex trading introduction course’

This free beginners forex trading introduction course was created to help novice traders understand all the basics of the forex market and forex trading in a non-boring format. This beginners course will also cover the basics of price action trading, forex charting, technical analysis, traders psychology and many other important subjects. Upon completion of this beginners forex course you will be ready to start studying my professional forex trading course.

INTRODUCTION TO FOREX TRADING – CHAPTERS & SYLLABUS

Other trading tutorials & guides:

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About nial fuller

97 comments leave a comment

I am still a newly born in this but I am giving all my best to grasp

Hello sir, am interested in forex how can i go about it

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I hope you can help

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thank.

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I just want to know what is the minimum amount to start trading?

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mercy W. Thuo
kenya,nairobi

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Thank you very much for this very informative and fear dispelling course, you have made the course material very simple and interesting, particularly where you define and explain the terminology as well as the meta trader platform. I am looking forward to do the dummy trading.(republic of south africa; thabazimbi)

Hello..
I’m interested in this lessons about forex trading,so I’m still new in this I need some lessons for this.
Thanks in advance

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What is A forex trading strategy?
Plz inform me very thanks

With your guidance am now able to make $3000 weekly for now,i learnt how to trade price action and now my charts are clear and clean of any indicators.THANK YOU!

Hi nikk, can you help me who taught you forex because i want to learn about it.

Hi nikk…am really eager to learn forex techniques and terminologies on how to conduct trading…needs your help please if you won’t mind
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Hello nikk, I would like you to tell me ways you took towards that success, I would be much pleased to get reply from you, am also interested

Am also interested count me in

Where can we learn how to trade ?

How much is the training?

I would like to learn on how to trade

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thank you for this valuable resource.

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Hi want to start learning please i want to enroll in your teaching sessions

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Just asking the shifting of the chart up and down on any paired currency does it act as an indication as to if it will go up or down

Hi am also interested in trading can you please provide more info.

Hello. Sir I’m looking forward to learn everything about trading market is my wish to learn everything about forex I’m new

Need to trade don’t have enough inf

I would like to learn how to trade. Please help me. And from how much do you invest??

Hi sir .. We’re proudly of u cause u making easy for us to understand forex very well. . Hopefully soon I’ll be okay.

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I am a newbie to trading and nial’s philosophy and training are the best so far. All newbies; take heart, this will work for you if you utilize nial’s teachings. Have a prosperous new year.

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Right from the comfort of my bedroom.Tumbs up boss

Hi nial……. I love to visit your site everyday. These are awesome informations you provide us here. I keep study the price action chart and getting best results. Thanks.
Umar farooq (lahore, pakistan)

Hello nial fuller sir,I am very interested forex trading but I have no idea on how to trade ,I hope you can be able to teach me

Thank you for writing such an informative, clear article. We are learning to trade binary options and your approach is, by far, the best I have come across to date.

Chapters

Part 1: what is forex trading ? – A definition & introduction

Part 2: forex trading terminology

Part 3: long or short ? Order types and calculating profits & losses

Part 4: what is professional forex trading?

Part 5: what is fundamental analysis?

Part 6: what is price action trading analysis?

Part 7: introduction to forex charting

Part 8: what is A forex trading strategy?

Part 9: common forex trading mistakes and traps

Part 10: what is technical analysis?

Part 11: how to make a forex trading plan

Part 12: the psychology of forex trading

Part 13: professional price action forex trading strategies

Why serious traders need ‘new york close’ forex charts

How to place different trade entry types using metatrader platform

How to set up metatrader forex charting platform

How to set up price alerts in metatrader 4 & 5

Beginners introduction to japanese candlestick charts

Connect

Free forex ebooks

The first steps are always the most challenging ones and taking the right ones will dictate your learning curve and success as a forex trader. Many new traders focus exclusively on the earning component of trading, ignoring that learning, which includes the word earning, is the primary tool to unlock earning from trading. Selecting the best forex broker for your needs is equally as important as trading the right strategy suitable for your trading style. You will find a comprehensive list of forex broker reviews here at dailyforex, which are unbiased, and give you a detailed look at hundreds of options.

Our list of recommended forex ebooks will help you with getting started in the forex market, shorten your learning curve so that you can be on your path to a profitable forex trading career.

Forex trading remains in high demand and represents the fastest-growing sector of the global financial system. There are numerous reasons for this, including the 24/5 tradability of it and the low capital entry requirements plus leverage, allowing more traders a chance to start trading. One of the often-overlooked aspects of successful trading is education. While there is no official course to take or lessons to learn, there are countless educational content available. Regrettably, many offers, training sessions, forex ebooks, and trading academies come at a cost. Self-proclaimed experts and professionals who failed at trading usually provide them, supported by extensive marketing campaigns. They seek to cover their investment and trading losses by earning passive income from the forex market via education. At dailyforex, our professionals have created forex ebooks 100% free of charge, granting you the educational value you need and allowing you to keep your money for trading purposes.

This ebook answers the most pressing questions of new traders. When to buy, when to sell, what leverage to use - and more. Don't start trading before you read this!

Is the trend your friend? This helpful ebook will help you understand when to place trades and what the charts are telling you. Written by a professional trader, these proven strategies will give you an edge to boost your confidence and help your trading succeed.

Trading cryptocurrencies isn't quite the same as trading forex - the volatility and potential for profits and losses makes it a both exciting and frightening endeavor. Get the scoop on cryptocurrency trading from this ebook before you get started.

Candlesticks are a critical part of any technical trader's arsenal. Learn how to understand bearish japanese candlesticks in this forex ebook.

Learn how to understand bullish japanese candlesticks and what these indicators mean for the markets.

Every trader wants to be successful, but the key to success is having good mentors. Get inspired with this ebook that outlines 50 successful trader habits.

New to trading? This intro to the forex market covers all the basics - how currency pairs work, how to read a forex quote, how to put your knowledge to the test, and more.

Understanding trading psychology is what will help you mitigate risks, make intelligent trades, and remain level-headed at all times. Read this ebook to learn more about yourself and your trading habits.

See for yourself why fibonacci analysis is one of the most popular technical indicators, and learn how you can use this tool to your advantage.

In these ebooks you will learn :

Insight to forex trading

Before you can trade the forex market and earn consistent income from it, you must learn and understand how it functions and what makes it tick, 24 hours per day, monday through friday. It is a fast-moving market, impacted by a range of different events. Unless traders invest their time into learning the core elements and gain an insight into forex trading, they will always remain less informed. Forex trading is not just sitting in front of your trading terminal, analyzing charts, reading economic reports, and placing trades. It remains one of the most challenging professions one can begin, and unless you treat it as such, the results will never resemble the success stories found online. Before you launch your trading terminal or even consider a deposit, get the insight into forex trading from our ebooks.

Generating income from forex

Generating income from forex trading is the driving force behind thousands of new traders who join millions of existing ones every day. The idea of buying and selling any of the more than 100 currency pairs available sounds appealing and easy at first but developing or following a long-term profitable trading strategy is one of the most challenging tasks any trader will face. What may be surprising to many new traders is that psychology represents the biggest obstacle to successful trading. Another misunderstood concept remains that you cannot earn more than what the size of your portfolio can support. The countless mismarketing campaigns promising astronomical returns from small deposits exist to lure in new traders, and in most cases, results in complete losses. The average retail trader loss rate of between 70% and 75% is evidence enough. Our list of recommended forex ebooks will teach you how generating income from forex trading is an achievable and realistic goal.

Understanding risk & reward in forex trading

When it comes to trading successfully and achieving consistent market-beating results, it is not about how much money you make but about how much money you keep. Many traders have streaks where they achieve exceptional interim trading results, only to witness a few quick losses evaporate those hard-earned pips. Understanding risk and reward in forex trading will allow you to assess which positions to take, how to identify profitable entry opportunities, and how to manage your stop loss orders. Even if you can only improve your trade management by a few pips per trade, it adds up to a significant performance boost. Make sure to understand the importance of risk and reward in forex trading, where our list of recommended forex ebooks will assist you.

Why trade forex?

Each trader needs to find an answer to that question. Some reasons may include the low capital entry requirements for forex trading together with the convenience to trade a market that is operational 24/5. It allows traders to create a trading strategy around their day jobs. Full support for automated trading strategies is another essential growth contributor to the forex market. Before you think about opening your first trading account, you must answer that question of why you want to trade forex.

How do forex prices work?

All forex assets consist of currency pairs, for example, the EUR/USD, the most liquid one, and often the one with the lowest spread, which is the difference between the buy (bid) price and the sell (ask) price. The first currency is also known as the base currency, while the second is the quote currency. Since the forex market moves fast, you will notice ongoing price changes in a floating spread account, where supply and demand dictate forex prices. An alternative is the fixed spread account, where brokers set a specific mark-up, which remains unchanged, regardless of underlying market forces.

Analyzing the market

There are two ways to analyze the market, fundamental analysis, and technical analysis. The former focuses on economic reports, monetary policies from central banks, and attempts to locate discrepancies between the data and the price of currencies. The latter uses technical indicators, chart patterns, and past price action to map out the next move of a currency pair. It also plays a defining role in the development of automated trading solutions. Many traders make the potentially devastating mistake to rely on one of the two, ignoring the other, while profitable traders often harness the benefits of both.

Your trading plans

Creating a trading plan or multiple plans for various assets and scenarios will determine the outcome of your forex trading approach. Many traders continue to underestimate the impact of psychology once the portfolio has open positions in a live account. In most cases, emotions take control of the decision-making progress, leading to trading losses. Learn how to develop your trading plans, and most importantly, how to follow them no matter what will happen. You can adjust them once you have sufficient trade data.

Psychology of trading

The psychology of trading will impact your results more than any other aspect of trading. You must learn how psychology will influence the trading process and how to master it so that you can improve the outcome of each trade. New traders should make this their first and most extensive lesson. After that, you can start to focus on other aspects of successful forex trading. Without fully understanding the psychology of trading, any strategy will result in long-term trading losses.

Forex strategies

Once you have learned the basics of forex trading, it will be time to identify the best forex trading strategies for you. None suits all traders, so you must first determine what type of trader you want to be. From there, you can research existing strategies, modify them, or create one of your own. One of the most important aspects is to test it in a live trading account to get real trading results. Micro accounts are ideal for this purpose. Should you decide on acquiring an existing EA, make sure to test it in a demo account, as it could have bugs that cause trading errors missed by the development team.

Advanced forex trading

This can include a more complex analytical approach, hedging your positions, using multiple entry and exit points, and cross-asset diversification. You will need a larger capital size in your portfolio, so as you grow your account with basic forex trading strategies, you will also build your knowledge base. Once the conditions are in place, you can expand by implementing advanced forex trading strategies, which will increase your overall profitability over time. Never rush the process, as you cannot acquire knowledge with money but by trading in a live trading account over an extended period.

Trading cryptocurrencies

With the emergence of the cryptocurrency market, forex traders have one more asset class to expand their trading profile. One of the most visible differences is that the cryptocurrency market is operational 24/7. There are also a lot more assets, with over 7,000 and growing. Regrettably, frauds and scams are present. Trading cryptocurrencies can unlock a sustainable income stream, but you must follow trading strategies and not the social media crowd. The basics of trading cryptocurrencies, forex, and any other asset class are similar, so you must understand the differences to make the appropriate adjustments.

Day trading forex

Day trading forex generally means that you will open and close your trades during the day, never keeping overnight positions. It is a popular trading strategy, and you will avoid swap rates on overnight positions together with unexpected events that can results in losses while you sleep. There are specific strategies designed for day trading forex since you will focus on shorter time frames, fewer pips per trade, and higher trading volumes. ECN accounts with raw spreads and competitive commissions cater to day trading in forex.

Forex for beginners

Before you can focus your attention on all the exciting aspects the forex market has to offer, you must master the basics. Take your time with education, as it will form the foundation of your forex trading path. Understand the psychology of trading before you proceed with opening a live trading account, make a small deposit you can afford to lose, and continue with education until you manage consistent profitability. After that, you can graduate to a more significant deposit and slowly expand.

Is trading forex worth it?

While extremely challenging, demanding, and time-consuming until you learn how to trade successfully, every trader who mastered the process will agree that the long-term benefits are worth it.

Is forex a pyramid scheme?

No, it is far from it. The forex market is the largest and most liquid financial market in the world, with the daily turnover on course to exceed $7 trillion per day. Some scammers prey on new traders with false promises and investment schemes using a pyramid, but it does not reflect the nature of the forex market.

Is forex trading easier than stocks?

The capital requirements to trade forex are significantly less than stocks, and the leverage is higher, but the ease or difficulty of trade remains similar and dependent on the trader.

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