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AB01 - How to Open a Forex Trading Account

"Welcome to the second section of this forex trading course. From here on, we jump into the more advanced concepts of forex trading. We start this second section with the most basic of all, how to open a forex trading account. Many traders will find it a bit intimidating and at times frustrating when they first open a trading account. There are lot of questions to be filled up and you need to carefully select the details while creating your forex trading account. But fret not! This article gives you a step by step process of opening your forex trading account and will ensure that you are all set up even before you make your first deposit. We will point in the right direction and what documents you need to have ready when you plan to open a forex trading account. You can avoid some of the most common mistakes traders make when opening their real forex trading account."

Opening your first trading account can be exciting. Think of it as your own investment trading account which will allow you to trade the forex markets. This article assumes that you have already given a test drive with opening a demo trading account.

Therefore, we will focus on the steps involved in opening your first real forex trading account. This is the trading account that you will use in order to deposit real money and start trading.

Obviously, at this point it might bring some mixed feelings. You are excited but also nervous about you will start trading forex. Don’t bother too much. Take one step at a time. So, let’s get into what’s involved in opening a forex trading account.

Your first step to opening a forex trading account

Assuming that you have read the previous articles, you have narrowed down to the forex broker of your choice. The first step is of course in creating a real trading account. Typically, you will be asked details such as your full name, email address, date of birth.

Once you finish the initial sign up phase, you will receive an automatic email asking to confirm your email address. After you click on the link you receive in the email, the next step will be to fill out further details.

When creating your forex trading account, you will be prompted to choose the base currency. This is the currency that your trading account will be operated in. All trades that you make, will also be settled in this base currency.

Therefore, pay attention to this when you open your forex trading account. Once you select a base currency, you cannot change it. The only alternative is to close your existing account and open a new trading account with the currency of your choice.

Depending on the forex broker you are trading with, you will be asked details such as your annual income and whether you are a professional trader. These questions, silly as they seem are important because it will determine your status with the broker.

The answers you give to the questions will also form a risk profile about yourself. These are required by regulatory agencies as part of ensuring that not everyone can just open a forex trading account and start trading.

Once the questionnaire is filled up, you will be prompted to make a deposit.

The KYC process of account verification

But we recommend that you first submit your ID proof even before you fund your account. An account verification is done for your forex trading account. This is the same process as one would follow when opening a bank account.

In technical terms, this is known as the know your customer verification process. You will be required to submit a proof of ID which has a photograph of you. This can be your national passport or a national ID card.

The second document will be an address verification document. Typically, you are required to submit a utility bill such as your internet, telephone or electricity or gas bill. The bill should not be more than 3 months old.

And needless to say, the utility bill should clearly state your full name and address.
It usually takes about two days (sometimes faster) for your documents to get approved if they are in line with the requirements.

Once you get a notification that your account has been verified, you can then proceed to funding your account. This is always a good practice so that you know that your account is all clear and only then should you deposit funds.

If you are a in a hurry and deposit funds first, then making withdrawals can be difficult for you at a later stage. Therefore, it is best to collect all the documents required before you fund your account.

Funding your forex trading account

To fund your forex trading account, you will of course be using the deposit methods that are offered from your broker. Generally, you can expect the funding methods to be via Credit/debit cards, bank wire transfer or an eWallet transfer.

You should make sure that you transfer funds only from your account. If you use your friend’s account or an account from your family, it will be automatically flagged, and it can be difficult to get your funds back.

Once you fund your account, that’s all there is. You can begin to trade based on the leverage that you choose. Remember to go easy when you start to trade the first time. Make proper use of leverage and be a disciplined trader.

Read 926 times Last modified on Sunday, 12 May 2019 08:52