Is Online Forex Trading Becoming Too Advanced?

By: John Howard

Anyone can participate in the lucrative world of the foreign exchange market through online forex trading. The World Wide Web and the internet revolution have caused a dramatic change in the way foreign exchange trading is conducted. Prior to the start of online foreign exchange, forex trading transactions were typically done through the posting of orders to brokers and banks via phone, faxes or in person. Trading was only done during business hours, as with all other activities related to foreign exchange trading such as making deposits and profit taking.

Today, due to the advancement in networking technology, the internet has altered the foreign exchange market drastically, providing for such conveniences as credit cards as well as trading around the clock. Online foreign exchange trading happens in real time with exchange rates changing constantly in intervals of just a few seconds. The quotes shown are only accurate for the specific time they are displayed; and a different rate may be quoted at any given moment. In online forex trading, when a trader executes his transaction after locking in a rate, this transaction is processed at that very same instant, executing the trade instantaneously.

Anyone with an internet connection can participate in online forex trading. To do this, a trader is typically required to register at a trading platform and deposit funds to smooth the progress of trading prior to starting on any transactions.

Requirements for registration vary with every platform; signing up as an individual trader online may oblige you to fill out simple or time consuming forms depending on governmental requirements. Some of these platforms may also require a face to face meeting and hard copies of all the documents needed for registration.

Individuals need to declare that the funds they deposited to facilitate trading did not come as a result of any illegal act such as money laundering. In addition to this initial deposit, some trading platforms may also require a maintenance margin or activity collateral. These are additional amounts are needed to provide an additional guarantee and are usually frozen under the trader's account.

Traders who participate in online transactions may also be required to download and install software applications specifically created for their trading platforms. As a result, the ability to access your online foreign trading account is limited to terminals that have the software installed. There are, however, some trading platforms that are accessible through a web-based interface which may be accessed from anywhere using a web browser. These trading platforms will only require traders to log in using their account details after which they can make deposits or start trading.

Foreign Exchange
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