Opening a Live Trading Account

The decision to open a live trading account should follow the decision to trade with a specific Forex broker. We’ve covered here the multitude of aspects that make a good Forex broker, so the due diligence process should be one that leads to the right decision. Assuming those steps have been taken and the trader knows which Forex broker to trade with, the next thing to do is to open a trading account. Before even thinking of a live trading account, look at the trading platforms the broker offers. Brokers usually offer their own in-built trading platforms together with the classical and most popular ones. MetaTrader is by far the most popular of them all, but c-Trader and JForex are  also increasingly popular lately. Then the way to access these trading platforms (and the trading account, obviously) is important as well. Traders should have access to the trading account via desktop log-in, on the Web, and via a smartphone app as well. The Web access should be avoided as much as possible unless the Internet connection is a really good one. Web-based trading platforms are notorious for being slow, and when the market is moving fast due to some economic event or news being released, the trading platform might play some tricks on you so that the entry you made is not the one it was supposed to be. It is mandatory for the broker to offer you access to a demo account. Many traders fail to trade on the demo account before opening a live one, but this should be a mandatory condition. The demo account offers a vast array of information regarding the Forex broker. Things like the server timezone (GMT or otherwise); execution in volatile times (if there is any slippage when important economic data is released, such as the Non-Farm Payrolls in the United States, or an interest rate decision); and even the spreads charged, swaps, etc., should be first seen on a demo account before seeing them on a live one. A Forex broker will always say that a demo account is good, but that it does not reflect the realities of a live one. This is true to some extent, but it will give traders a good idea about what trading with that broker is like. Assuming all the information needed to trade on a live account is there, opening such an account is subject to some steps to be followed. This requires both patience and understanding, as well as trust that the broker will know how to keep a trader’s confidence.

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Steps to Open a Live Trading Account

Before opening a live trading account, the trader needs to know what kind of an account to open. The offering varies from broker to broker, and even with the same broker there are multiple live account types to choose from. Based on the minimum amount to be deposited, there can be different live trading accounts to be opened with different conditions. For example, on a big deposit, the account will probably be of Electronic Communication Network (ECN) type, and while spreads are almost non-existent, commissions are a bit higher than normal. However, regardless of the trading account type, the following steps should be taken. Sometimes, depending on the service and technology used, some brokers skip some of these steps, but in principle, these are the ones that need to be followed.

Provide Personal Data and Relevant Trading Information.

Live Trading AccountThe first step is to provide personal data such as date of birth, etc., together with relevant trading information. The trading information, even though it doesn’t seem to be relevant now, is vital for the Forex broker. At this early step, the broker will want to know the amount you want to fund your trading account with. Together with your experience in trading the Forex market, this information allows the broker to categorise you between different types of Forex traders: beginners, intermediate, experienced, etc. Depending on the way the brokerage house is organised and operates, the trader is placed in a specific category, and that account will be dealt with by the broker according to the form of the broker’s organisation. If it is a market maker, or a hybrid between a market maker and a Straight Through Processing (STP) broker, this information will allow it to route the trader’s trades, or none of them, or only part of them, to a third-party liquidity provider.

Upload Relevant IDs and Proof of Address.

It is important that the Forex broker knows exactly who you are, and for that, some documents are needed. This can be either a passport or national ID card, together with proof of the physical address as it appears in the documents. This proof of address can be obtained from an electricity or phone bill, but also from a bank account opened in the trader’s name. All these documents can be scanned and uploaded on the broker’s website. The document verification process may take some time, from a few hours to a couple of days, but usually within a maximum of 48 hours the trading account should be open. If something goes wrong, or you get the impression that things are taking too long, there is always customer service to be contacted. Ideally, the Forex broker should have a live chat option available on the website for direct contact with its customers. If not, look for a proper response to any email contact, which should take up to 24 hours maximum.

Funding the Trading Account

Funding should be a smooth process, as there are multiple methods to be used. Starting with the classical credit cards and ending with electronic payment methods, anything can be used. The only thing that differs here is the time taken between the actual payment and the moment the amount is credited to the trading account. This varies based on the funding method used. The most time-consuming funding method is using a bank wire. If this is the case, expect up to 3 business days to pass before the money is visible in the trading account. This has nothing to do with the Forex broker, but mostly with the corresponding banks its bank/banks deals with. Other than that, payment can be processed instantly in the case of using PayPal or credit cards or any other electronic payment method. Even Bitcoin is used nowadays to fund a trading account. Make sure you understand something: When it comes to the ways to fund a trading account, the Forex broker will strive to offer any funding method that exists to have as many clients coming in as possible.

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