If you have a computer and access to the internet then you have the basic tools required to start making money by trading Forex.

The first thing you need to do if you want to trade Forex is to open a Forex trading account. Most online brokers offer the opportunity to open a “demo” account which is a great way to practice your Forex trading skills before starting to use your own money.

On the subject of money, it is possible to open what is called a “micro account” with as little as a couple of hundred dollars, although if you can fund your account with closer to one thousand dollars this will work better.

You should choose a broker that is registered with the Commodity Futures Trading Commission. Look for one who will offer you 100:1 leverage on your trades – this means that for every dollar of margin you have in your account, you can control 100 times that in base currency, so for example if you have a $1000 margin deposit, you can control 100,000 currency units.

Implement a system or plan. This will act as your business plan and give you predefined criteria for when you should enter and exit the market and what you should do in certain situations.

You should plan to only use around 20% of your cash total, this will ensure that you have enough money to cover any losses as Forex is an extremely volatile market and you can lose more than your original investment. You should take your plan into consideration when choosing Forex charting software, to ensure that it can handle the requirements of your plan.

Research is incredibly important if you want to make a profit. You need to understand how world currencies fluctuate in order to become successful in Forex.

Currencies are traded in pairs, so it is a good idea to choose a single pair to focus on while you are learning – this way you can get to know how the market moves and see how small fluctuations affect things. This is a strategy used by the banks – common pairs are USD/EUR and USD/JPY.

It is helpful to monitor the oil, gold and stock markets as these all have an impact on currency markets as do certain types of news event – particularly anything concerning the US Dollar.

There are a wealth of charting packages and research tools available which will help you analyse risks and make investment decisions. The information they provide can be complex, so you should take the time to learn how to read and analyse it. Many online brokers offer charting packages and other research tools as part of your account with them.

You should never try and predict the market, always base your trades on trends and research – there is a saying “the trend is your friend”. The amount of information available to you online is staggering and much of it is free so there is no excuse not to take advantage of it.

If you are thinking about Forex trading then hopefully this information will help you understand the basics about opening a trading account, implementing a system or plan and most importantly the research that you need to carry out. If you make sure you follow these steps carefully you can be sure of making a success of the Forex market.