Image Source: FreeImages
If you’ve heard about forex trading before, there’s a good chance it was in the form of a cautionary tale about an unhinged young adult who blew his trust fund on foreign exchange markets and ended up with nothing but a fancy bookkeeper and a broker who drinks free cocktails.
The truth, however, is that forex (or Foreign Exchange) trading is a booming business that has less to do with trust funds and everything to do with market trends. It’s also perfect for people of all ages who understand the risks.
So, if you have some savings and are interested in investing in something other than blue-chip stocks, here’s how old you have to be to trade forex…
Forex is short for “foreign exchange.” When you trade forex, you’re buying and selling different global currencies in the hopes of making a profit. You can read more about how forex works in this article.
There are two primary markets for forex trading: the “interbank” market, where banks and large financial institutions trade with each other, and the “retail” market, where individual investors trade with banks. Retail traders depend on brokerages that set the price for currencies and execute trades on their behalf.
To trade forex, you’ll need a brokerage account with a regulated financial institution. It’s possible to trade online or with a mobile app, but many brokerages also let you trade on the phone.
Branches and exchanges also let you do trades of currency such as the Euro and US Dollar currencies or just with cash. The age minimum requirement varies by location, so check the website of a headquartered brokerage you intend to trade with.
Brokerages that cater to individual investors (retail traders) have a minimum age requirement of 18. You may have to provide proof of identification to open an account. If you’re under 18, some brokers might accept your application and you can still trade forex. But you’ll have to jump through the same hoops as someone older.
There are many reasons to choose forex trading: It’s accessible, it’s flexible and it offers a high return on investment. All you need to get started is a brokerage account and a few hundred dollars to put toward trading.
While there are no guarantees when it comes to investing, for the vast majority of forex traders the quality of their trade will continue to be up for debate. The currency you’re using and the exchange rate against another foreign currency will have a huge impact on your returns and potentially determine your real profits as well.
Forex trading is easy to get started, you need a small initial investment and you can cash out whenever you want — no waiting for a stock to make good on its promise. Plus, the average return on investment for forex trading is about 65 per cent. That’s a higher rate of return than most other traditional investments.
If you’re ready to start trading, the first thing to do is find a forex broker that meets your needs. This should be your first step because the broker determines which currencies are available to trade and what tools are available to you.
You can use our forex brokers list to quickly find a forex broker via their rankings and user reviews. Use our forex broker reviews comparison tool to find the right broker for you. You’ll want to make sure that the broker is regulated and has a good track record of customer service. You should also make sure that the minimum age to open an account is 18 or that you meet any lower age requirements.
Forex trading is a great way to grow your savings and make extra money with a low barrier to entry and high liquidity. All you need to get started is a brokerage account, a few hundred dollars and an understanding of how the market works.
If you’re ready to trade, start by finding a good broker and reviewing the market trends. If you’re new to trading, you may want to start with a demo account before putting money on the line.
And remember that when you trade forex, you need to be patient and be willing to accept some losses if you want to make a profit in the long run.
