Forex trading is an exciting way of making money in the financial market. It involves buying and selling currencies to make a profit. Interactive Brokers is one of the leading online brokers that offer forex trading services. In this article, we will discuss how to trade forex with Interactive Brokers.
What is Interactive Brokers?
Interactive Brokers is a brokerage firm that offers a wide range of online trading services. It was founded in 1978 and has its headquarters in Greenwich, Connecticut. The company offers trading in multiple financial instruments, including stocks, options, futures, forex, and bonds. Interactive Brokers is known for its low commissions and fees, advanced trading platforms, and robust trading tools.
How to open an account with Interactive Brokers?
To start trading forex with Interactive Brokers, you need to open an account. The process is straightforward, and it can be done online. Here are the steps to follow:
Step 1: Go to Interactive Brokers’ website and click on “Open an Account” at the top right corner of the page.
Step 2: Choose the account type that suits your trading needs. Interactive Brokers offers several account types, including Individual, Joint, IRA, Trust, and Corporate accounts.
Step 3: Fill in the application form with your personal and financial information. You will also need to provide proof of identity and address.
Step 4: Fund your account by transferring funds from your bank account to your Interactive Brokers account. The minimum deposit required is $2,000.
Step 5: Once your account is funded, you can start trading forex.
How to trade forex with Interactive Brokers?
Interactive Brokers offers several trading platforms for forex trading. The most popular ones are the Trader Workstation (TWS) and the WebTrader. Here are the steps to follow to trade forex with Interactive Brokers:
Step 1: Log in to your trading platform. If you are using the TWS, you will need to download and install the software on your computer. If you are using the WebTrader, you can access it directly from your browser.
Step 2: Choose the forex pair you want to trade. Interactive Brokers offers a wide range of forex pairs, including major, minor, and exotic pairs.
Step 3: Place your order. You can choose between a market order or a limit order. A market order is executed at the current market price, while a limit order is executed at a specific price you set.
Step 4: Monitor your trade. You can track the performance of your trade in real-time using the trading platform. You can also set up alerts to notify you of any price changes or events that may affect your trade.
Step 5: Close your trade. You can close your trade at any time by placing an opposite order. For example, if you bought a currency pair, you can sell it to close your position.
What are the fees and commissions?
Interactive Brokers charges low fees and commissions for forex trading. The commission varies depending on the account type and the trading volume. For example, for an Individual account, the commission is $0.002 per share or 0.2 basis points. The minimum commission is $2.50 per order, and the maximum commission is 0.5% of the trade value.
Interactive Brokers also charges a spread for forex trading. The spread is the difference between the bid and ask price. The spread varies depending on the currency pair and the market conditions.
Conclusion
Trading forex with Interactive Brokers is a great way to make money in the financial market. The company offers low fees and commissions, advanced trading platforms, and a wide range of forex pairs. If you are new to forex trading, it is recommended that you start with a demo account to familiarize yourself with the trading platform and the market. Once you are confident, you can open a live account and start trading forex with Interactive Brokers.
