Forex trading can be described as a global marketing which can either be decentralized or be done over the counter so as to trade different currencies. Forex trading comprises of all aspects such as buying, selling as well as exchange of different currencies at the current prices or that has been determined. Forex trading ensures that international investment trade and investment can be done smoothly by converting various currencies. Forex trading has one of the largest trading volume asset since it is carried all over the world and can be done at any time of the day. Exchange rate of currencies usually fluctuates every time and there are various factors such as economic factors, political conditions as well as market psychology that influence these rates. Economic factors that have an influence on the exchange rates in forex trading includes spending and budgetary processes of a country, inflation, balance of the levels and trends in trade, productivity of the economy of a given country and also the economic growth and its sustainability. Political instability and the political anticipations with a new government are the major political factors affecting forex trading.
Forex brokers enable people to engage in online forex trading. Those firms that allow currency traders to buy and sell currencies are known as forex brokers. Through the forex brokers, it is possible for a trader to have access to the currency market for 24 hours a day although their foreign exchange volume market is not quite large. When trading, the trader will open an online account with the forex broker where they will be selling and buying shares at a small transaction fee. A collateral is a must have when opening the account which is a given amount of money to act as a security when one is doing the currency trading. With the collateral, it is also possible for the trader to borrow some capital which can be larger than their collateral so as they can increase their financial asset.
There are various factors that one need to consider when choosing a suitable forex broker. A suitable forex broker need to have been licensed by the forex trading regulatory body which will prevent issues such as abusive practices, fraud and manipulation. Other than making withdrawals and deposits easy for the traders, the forex broker should also give clear guidelines on the account they have for traders such as margin and leverage, spreads and commissions and initial deposits. Forex brokers offer various pairs various currency pairs which they should be clear on to ensure profitability when trading. Since forex trading is done all the time, the forex broker should offer customer services at all time and their online platform should be easy to sue.