All you need to trade forex is a computer, an internet connection – and a live forex account. But with so many options out there, how do you choose the right one? Here’s our full guide on how to get a forex trading account.
If you want to get a forex trading account, then the first thing you need to do is find out your requirements. This is a crucial first step, as it will determine the accounts available to you. For example:
● Money: how much money can you afford to put into your forex account? Do you need it to be funded, or can you fund your account yourself?
● Currency pairs: what’s the scope of currency pairs you’d like to trade?
● Loss: how much are you willing to risk? Do you want an account with high or low risk?
● Time: how much time do you have to put into your account? Are you trading around a full-time job, or on the side?
For anyone looking to trade forex online, getting the right account can be a difficult task – but it doesn’t need to be if you do your research. There are multiple kinds of forex trading accounts offered by brokers. Each varies in terms of minimum deposits, leverage limits, position sizing rules, trading costs, and even regulatory oversight.
Here’s an overview of brokers' different kinds of accounts and a short explanation of what they entail.
● Demo Accounts: These virtual trading accounts allow prospective clients to see how the trading platform works without risking real money – but it can be difficult to ascertain how you’ll perform in a real trading environment, so at BluFX we don’t advise this. Most brokers offer demo accounts for free, but some require an initial deposit to be made first – and many are offered by trading platforms as part of an initial trial to get access to their funded accounts (at BluFX, we don’t do this! We just offer instant funding – no trials or demos involved.)
● Micro Accounts: These usually have the smallest minimum deposits ($1-$250) and offer micro-sized lots (1k). Micro accounts are a good way for new traders to get comfortable with forex trading without risking too much money. They also don't incur much in costs, so profits can be built up quickly if trades go well.
● Mini Accounts: The most common type of account for small retail investors is the mini account. These usually require a minimum deposit of $100-$500 and offer access to trading in standard lots (10k). Margin requirements are also typically lower than other types of accounts, meaning you can leverage your position more easily, but your risk exposure is also greater.
● Standard Accounts: Standard accounts typically come with larger minimum deposit requirements ($5,000+) and give access to standard lot sizes (100k). These are most popular for larger traders and institutions because they allow for more flexibility regarding leverage and trade size.
● Professional/VIP Accounts: These usually require deposits much higher than standard accounts but may offer additional benefits such as lower commissions, lower spreads or free trades.
You'll have to put at least $250 into an average forex trading account. Generally speaking, that's the minimum amount needed to open a trading account with most brokers, and it's enough for you to start trading in most currency pairs.
If you want to trade with more leverage, you can choose a standard or premium account that requires a higher deposit. The best option is to look at all the forex trading accounts available and find one that meets your needs and budget.
In order to determine your buying power, you first have to understand a few key terms and features of your forex broker's platform. Many platforms use a concept called margin to determine the level of risk involved in each trade, and some brokers use this to calculate your buying power.
Margin is the amount of money you will need to put up to be able to make a particular trade; if you are using a broker who calculates margin differently, it will change how much money your account can translate into when trading.
Another concept you should be familiar with when determining your forex brokerage's translation rate is the leverage offered by your broker; this figure shows how much more money than would normally be available on one trade you can access with just a small amount of margin. Leverage is calculated as the ratio between total assets and net worth. For example, if a broker has $200,000 in equity and $400,000 in assets, their leverage is 2:1 (or 200 percent).
The idea that you need lots of leverage to be successful is a myth; the opposite is true!
You might be surprised to find out that many profitable traders use low leverage. High leverage can lead to big losses if you're not careful. Because the foreign exchange market is volatile and changeable, it's wise to use a relatively low amount of leverage.
In addition, if your broker offers high leverage and you want to take advantage of it, you'll have to make a minimum deposit. This means that you'd be exposing yourself to more risk than necessary without necessarily gaining anything from it—and no one wants that! See three key benefits of using low leverage>>
Put simply, the amount of profit you’ll make from your forex trading account varies hugely – as do average forex trader salaries in general. Forex market fluctuations, trends and fluctuations in currency pairs all impact your forex trading account.
In addition to this, the strategies you use will also determine the profit you make. Some strategies tend to be more effective than others, depending on their complexity and ability to predict forex market movements.
Want to know more about profit potential? Take a look at our investigation into the average profit in forex trading>>
This depends on the company you’re using. Some will give you a multi-step trial or challenges to pass on a demo account before gaining access to a live forex trading account; others (like BluFX!) will give you access to the account straight away.
So should you go for a demo challenge or instant access? It’s up to you which you choose – this will depend on how quickly you want access to your live account, how much leverage you’re looking for, and how much cash you’re willing to invest up front.
After signing up, you will need to verify your identity and address by uploading documents – such as a driver’s license, ID card or passport. This is known as Know Your Customer (KYC) compliance. The broker will then verify your identity before giving you access to the account.
Once the paperwork is complete, most brokers will allow you to fund your account – if you’re using your own capital – using an electronic money bank transfer service or wire transfer methods such as Western Union, PayPal or MoneyGram. You can also fund an account using a credit card (although credit cards are not recommended because they charge high rates).
If you’re not using your own capital and choosing a provider who offers a funded account (like BluFX!), you’ll get instant access to this once your documents have been verified.
If you’re working with a limited budget, it’s best to pick a provider who offers fully funded forex trading accounts for a fixed price. This means you’ll pay a set cost – usually a monthly fee – for access to a live account already funded and ready to use.
There are a few benefits to this: one, you do not need to fund your account with your own capital – and two, you greatly reduce your own personal risk, so you don’t need to compromise your hard-earned savings to start trading.
Interested? At BluFX, we offer two fully funded forex trading accounts for £99 or £249 per month. We believe in transparency and helping all traders achieve financial freedom, regardless of their background. This means:
● We don’t screen traders beforehand – so there are no trials or challenges.
● You are never liable for your losses.
● We offer a 50/50 profit split.
● All you’ll ever need to pay is your fixed subscription price – so there are no hidden costs.
● Once your documents have been verified, you can get instant funding in a matter of hours (yes, really!).
Want to know more about how it works? Here’s how to trade profitably on your BluFX account.