With a daily trading volume of $6 trillion, the currency market is one of the most liquid in the financial world. Millions of investors provide their analysis on different currency pairs using unique fundamental and technical tools. Our article will cover all the basic forex trading points and see how retail traders can level up their game in the financial markets.

Professional vs. Retail Trader

In the forex industry, traders who work in big financial institutions such as banks and hedge funds are professional traders. Local investors who trade from the comfort of their home using their operating system and the internet are called retail traders.

The two classes are also differentiated based on the market experience, where the former is considered more profitable and successful. While the available opportunities were wide between the two previously, the gap has significantly closed due to the developments in fintech. Now retail traders can enjoy low spreads on currency pairs, fast execution, and easy access to currency trading.

How can retail traders work on the markets?

For retail investors to start trading with currencies, they have to find a reliable broker that is regulated by one of the top authorities. These regulators ensure that the brokerage is not involved in any fraud and that the investors' capital is safe.

Opening an account with a regulated broker is simple, where an investor has to provide their email and password along with ID for verification purposes. Companies list out many deposit and withdrawal methods for retail traders to easily fund and cash out.

Trading hours

The forex market is open during specific hours in a week. It starts from 5 p.m. EST on Sunday until 4 p.m. EST on Friday. There are four major market sessions during this duration:

• * Newyork

• * London

• * Tokyo

• * Sydney

Traders can find varying volatility on specific currency pairs during each of these sessions. For example, the Tokyo trading hours causes provide good liquidity and volatility for Japanese Yen crosses. Similarly, the London session is heavy for GBP pairs.

Account types

Retail traders now have access to multiple account types. They differ in terms of execution speed, fees, availability of currency pairs, etc. Let us go through some of the essential portfolios:

• ECN. This type of accounts is better for scalpers and algorithmic traders. There are zero to no spreads, and the fees are in the form of a commission.

• Standard. One of the most common types. It generally has variable spreads with normal execution speeds. The spreads vary from one broker to another.

• Micro and cent. The accounts that offer retail the benefit to lower their risk significantly while still enjoying the perks of a live account. Each lot of micro is equivalent to 0.1 of a standard portfolio.

Swap-free accounts are also popular in the forex market but are only available for Muslim traders. The Islamic sharia considers interests as haram or illegal way of trading.

Important Points to Keep In Mind

Forex trading may seem easy in the beginning, but this is not the case. Traders have to maintain their drawdown using proper risk management. Psychology plays a vital role in this regard. It is crucial to be wary of greed, happiness, euphoria, etc., at all times as these feelings can lead to aggressive trading, which can be dangerous.

A good strategy can help provide you with profits. Risk management, a good mindset, and an excellent game plan go hand in hand while trading currencies. The range of opportunities is broad in the forex market and is capitalized on daily by millions.