The Forex market is not something new, it exists for over thirty years. Prior to the advent of the Internet, Forex trading was mainly done via phone, fax or in-person orders. Most of the trading could only be executed during business hours as well as the activities related to Forex, like deposits and profit taking.
The Internet has caused a radical change in the way Forex trading is conducted throughout the world. The Internet made it possible around-the-clock trading and conveniences such as the use of credit cards for fund deposits. With the introduction of computers, and then the Internet, the Forex market continues to grow as more and more people and businesses alike became aware of this trading market and were given easier access to it.
Online foreign exchange trading occurs in real time. The exchange rates change so rapidly, in intervals of seconds, that the quotes are accurate for the exact time they are displayed only. A different rate may be quoted at any moment. When a trader locks in a rate and executes a transaction, that transaction is immediately processed and the trade completed.
Due to the constant changing rates the Forex software used for online trading must be able to provide real time access to the most current exchange rates, to deal and order making, to deposits and withdrawals and to monitoring the status of positions and trader's accounts. Online trading platforms normally operate 24 hours a day just as the Forex market.
There are two basic steps to fulfill before you can start trading online:
1. Register at a trading platform: registration is done online and the basic information required is the trader's name, address, e-mail, telephone, and sometimes an ID number (passport, SSN or driver's license). The information requirements may vary from one trading platform to another. As part of a global anti-money laundering policy the registrant must declare that the funds used for trading are not the result of money laundering or any criminal activity.
2. Deposit funds: after registering, funds must be deposited to facilitate trading. Many Forex platforms require that, in addition to the funds used for trading, an additional amount be deposited as a “maintenance margin”, which works in fact as an additional guaranteee.
Some trading platforms require the download and installation of specific software that will grant access to trading only to computers that have the software. Others have fully web-based systems that enable trading to be conducted from any computer connected to the internet from anywhere in the world.
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