The capital markets provide investors with a way to benefit from changes in financial instruments.  One of the easiest and most efficient ways to trade the capital markets online with a forex broker such as iFOREX.  Before you open an account and begin to invest your hard-earned capital you should familiarize yourself with some online trading basics.

Online Platforms are Flexible

Online trading platforms are flexible and easy to use. Most online trading forex brokers provide access to a downloadable platform which is usually their most sophisticated trading module. In addition, online brokers offer browser based platforms as well as mobile base platforms, which allow investors to trade when they are on the go.

If you are unfamiliar with the different markets and instruments that are available to trade with an online broker, look for a tab that says, “getting started”.  This will describe the markets that are traded and how they trade. For example, the foreign exchange market, is made up of hundreds of currency pairs. How they trade, and the process of buying and selling is described in the getting started section. In this section, you will learn what is meant by the bid price and what is considered the offer price.

The Education Section Provides Access to Knowledge

If you need more help, look for a tab that says education.  The education section, describes in detail the capital markets and why they move.  Nobody has a crystal ball, but the changes that occur in a currency pair or financial security are based on several factors including, economic data, monetary policy changes, market sentiment, and a host of other issues.  The education section of an online brokers web site will describe why these changes happen and when you should expect them to occur.

Online brokers usually will have a financial calendar section.  This area will describe when economic or political events will occur.  In addition, many financial calendars will report on analysts’ expectations of an event. This is important because markets usually price in all the current known information. So, if new information comes out, that was not expected, it is likely to change the market prices.  Following the actual release relative to the expected release is an important part of trading.

Online brokers also can provide news that is relevant to the capital markets. While there are many places for you to receive economic, or political news, most of these outlets do not equate the news to changes in the capital markets. Not only should you be interested in the current news cycle, but also any analysis based on the news.  Many online brokers provide both fundamental and technical analysis.  Fundamental analysis describes how changes in the economic or political landscape effect the rate of a currency pair. Technical analysis is the study of price action and how past price action forecasts future price movements.

Online trading provides easy access to the capital markets.  Many offer several trading products including forex, commodities, indices and stocks.  These platforms are flexible, and even offer mobile platforms so you can trade on the go.  Make sure you read through the getting started and education section before you decide to risk your capital.