Get Started With Forex in Pakistan
Apart from trade of crypto currencies, there are almost no restrictions on forex trading in Pakistan. Here are the basic steps that you have to go through when you want to open an account with a forex broker.
- Find a Stable Internet Connection. A reliable and fast internet connection in the first priority you should have.
- Choose best forex broker. Select the best broker to open up an account with. You can choose an international forex broker also.
- Select a suitable trading platform. Your forex broker will also offer you a trading platform. You can also choose one depending upon your needs.
- Deposit Initial funds into your account. After you open your account with the broker and the broker approves your request. You have to deposit initial funds into your account. Minimum initial fund amount depends upon your account type.
- Make your first trade. Once you have successfully setup your account you can officially start your first trade.
Basic Concepts of Trading
Here are some of the basic concepts related to forex trading strategies.
Leveraged Trading
In Leverage, you borrow a certain amount of money needed to invest. When forex trading comes, you usually borrow money from your broker. Most of the people come towards forex trading as you get much higher leverage here instead of stocks.
Leverage is the use of borrowed money to stable your trading position beyond what is available from their crash balance alone. Brokerage accounts allow the use of leverage through margin trading, here broker gives you borrowed funds.
Margin
Money borrowed from Brokerage Company to purchase an investment called margin. It includes buying an asset where the buyer pays only percentage of asset and borrows rest from bank or broker. Calculated from difference of total securities held in investor account and loan amount from broker.
It comes as using of borrowed funds to trade a financial asset, which forms the collateral for loan. Leverage given by margin will augment both gains and losses.
Lot
In trading lot is the number of units of financial assets bought on exchange. For stocks, a round lot is 100 share units. They are also be traded in any number of shares. A bond lot can vary; the value may be as low as $1,000 that individual investors can purchase. Investors do not need to buy round lots, where a lot can be any number of shares.
Long and Short Positions
Long and short positions refer to what an investor owns and stocks an investor needs to own. Long position means that investor has bought and owns those shares of stocks. In Short, investor owes those stocks to someone.
Buying or holding a call or put and option considered long position. Here investor has the right to buy or sell to writing investor for certain amount. Vice versa, selling or writing a call or put option considered short position. Here writer must sell or buy from long position holder.
Exchange Rate
It is the rate of how much one unit of currency changed for the opposite currency. Currency exchange rates can be floating or fixed. In fixed they can still float but they move in sequence with pegged currency. In floating exchange rate, they continuously change based on multitude of factors.
Currency Pair
Two different currencies quoted with value of once currency quoted in front of other known as currency pair. First currency of pair considered base currency and second currency of pair is called quote currency.
When the order is placed for pair, Base currency in pair is bought, whereas second listed currency in pair is sold.
Pips
Pip also known as percentage in point or price interest point is the smallest price move that an exchange rate can make based on forex market convention. A pip is one-hundredth of one percent, or the fourth decimal place (0.0001).
Demo Account
Demo Account is offered for practicing trading strategies. Also referred as Paper Trading Account for testing new strategies without any risk of losing actual money. Funded with fake money enabling customer to practice. One use of account is teaching students about basic concepts and strategies of investing in stock market.
Benefits of a Forex Demo Account
The benefits of holding the account not just ends with assisting beginners but also for good practice in long run. Here are key advantages of having forex demo account.
Practice Trading
Most prominent of all is use for practice to get familiar with trading conditions. Almost all of the brokers offer same type of feed in the demo account that are in live account. It helps to overcome the markets risk you can face in real account.
Test your Trading Strategies
Forex demo account should be your first step if you have placed your first step in forex trading. It helps to test and tweak your strategies within safe and risk free environment.
Risk Management
Demo account helps you to minimum your risk factors. Factors like, how many positions to open up the trade, how many units or lot sizes to trade. There comes a point where risk management in terms of position sizing becomes your second nature, here you are confident enough to move in your live environment.
Websites to Learn Forex Trading
There are many forex learning websites available over internet. Some websites a extremely fresh content and up to date news. Some website provide strong educational material. All of the websites help you from getting out of risk of scamming. Here is the list of best forex trading learning websites with key features.
- Babypips – Considered as the best beginner guide for forex trading. It provide complete overview of the topics and dicussion in simple and clear form.
- Forexlive – Includes several tabs covering basic concepts, stategies and terminoligies of fores trading. Key feature of website is social trading which helps newbies to replciate the process of expert traders.
- Investopedia – Covered with finance and investing topics. You can call this website as University of Forex providing a specific academy tab to learn. It covers all of the learning content needed to be profitable in the forex business.
- Tradingview – It comes with free membership for its user facility. One click free sign up will give you the access of full content on the website. You can launch trading charts without the need of MT4 and MT5 trading platforms.
Choose a Best Broker
Trading forex (currencies) in Pakistan is common amongst citizens. While suggested, forex brokers are not needed to become authorized by the Securities and Exchange Commission of Pakistan (SECP) to accept citizens of Pakistan as clients. The Securities and Exchange Board of Pakistan is the economic administrative body in Pakistan.
Best Forex Brokers in Pakistan
To find the best brokers in Pakistan, we generated a list of all agents that list Pakistan as a country they acquire new clients from. We then listed brokers by their Overall ranking. Here is our list of the best forex brokers in Pakistan.
- IG – Best overall broker 2021, most granted
- Saxo Bank – Best for analysis, trusted global trademark
- Interactive Brokers – Great for experts and organizations
- XM Group – Well-rounded offering
- IC Markets – Best MetaTrader Broker 2021
- Tickmill – Best overall broker for low costs
Comparison of Forex Brokers in Pakistan
A comparison is given below among the among the forex and CFD brokers using forex agent comparison tool for finding the best mt4 broker in Pakistan.
OctaFX
Accepts Pakistan resident traders and they can open a trading account with a minimum initial deposit of $ 25. You can find an average spread on EUR/USD of 1.100 pips on Standard Account. OctaFX has an overall rating of 3.5 out of 5.
Moneta Markets
Accepts Pakistan resident traders and they can open a trading account with a minimum initial deposit of $ 200.00. You can find an average spread on EUR/USD of 1.300 pips on Standard Account. Moneta Markets has an overall rating of 3.5 out of 5.
Vantage FX
Accepts Pakistan resident traders and they can open a trading account with a minimum initial deposit of $ 200. You can find an average spread on EUR/USD of 1.350 pips on Standard Account. Vantage FX has an overall rating of 3.5 out of 5.
FxPro
Accepts Pakistan resident traders and they can open a trading account with a minimum initial deposit of $ 100.00. You can find an average spread on EUR/USD of 1.510 pips on Standard Account. FxPro has an overall rating of 4 out of 5.
IC Markets
Accepts Pakistan resident traders and they can open a trading account with a minimum initial deposit of $ 200. You can find an average spread on EUR/USD of 0.800 pips on Standard Account. IC Markets has an overall rating of 4 out of 5.
XM Group
Accepts Pakistan resident traders and they can open a trading account with a minimum initial deposit of $ 5 or $ 100 depending on the account type you open. You can find an average spread on EUR/USD of 1.6 pips on Standard Account. XM Group has an overall rating of 4 out of 5.
AvaTrade
Accepts Pakistan resident traders and they can open a trading account with a minimum initial deposit of $ 100. You can find an average spread on EUR/USD of 0.91 pips on Standard Account. AvaTrade has an overall rating of 4 out of 5.
Saxo Bank
Accepts Pakistan resident traders and they can open a trading account with a minimum initial deposit of $ 10000.00. You can find an average spread on EUR/USD of 0.8 pips on Standard Account. Saxo Bank has an overall rating of 5 out of 5.