People trade on the forex market for a number of different reasons. The foreign exchange markets are the largest and most liquid financial markets in the world, making them immensely popular among forex brokers and traders. Forex trading exploded in popularity because of its leverage, continual trading opportunities, high liquidity and low entry costs.

After the 1970s, when the United States dropped the Bretton Woods agreement regarding the USD convertibility in gold, the foreign exchange market grew dramatically. First available only to institutional players due to the high transaction costs and difficulty to access, it all changed when the internet and online trading appeared. Forex brokers made it possible for the retail trader to join the largest financial market in the world.

A forex broker is an intermediary link between the trader and the market. It offers market quotes via its various liquidity providers, and its trading platform reflects the best possible conditions it has to offer to its customers. For this, it charges a fee or a commission, and its interests align with those of the trader.

Brokers are organised as either a dealing desk (also called market makers) or a non-dealing desk. A dealing desk creates a market by mirroring the quotation from the interbank market and deals the prices to its clients. In non-dealing desks, forex brokers route their clients’ orders to the liquidity provider, and the best quote is offered to retail clients from the liquidity pool.

Brokers organised like non-dealing houses often offer ECN (Electronic Communication Network) or STP (Straight-Through Protocol) execution. However, different types of forex brokers exist, mixing dealing with non-dealing conditions, and operating as hybrid entities.

Depending on the type of the brokerage house, different account types exist. ECN accounts and STP accounts are just a couple of examples.

Because the forex market is made up of currencies from across the globe, predicting exchange rates is difficult as there are a number of factors that constantly move prices. The main driving factors for these moves are central banks, news reports and market sentiments. Understanding how each of these operate will help you on your trading journey.

It’s also important to remember that prices move up and down based on supply and demand, just like any other financial market. As a forex trader, you’re likely to either choose to put your money into an economy that has strong growth potential or short a market.

No matter if you’ve been trading for a short or long time, defining your success will help you to become an expert trader. Think about what you want to achieve from it and how you personally define success.

Setting goals is vital and these should be easy to measure. It’s also recommended you set a target that can be achieved over a long timeframe, annually for example, as opposed to monthly. Once you’ve established these factors, you’ll be able to put your action plan into work.

Regardless of how experienced you are, it’s important to always manage your expectations throughout the forex trading process, and control your emotions. To become a successful trader, you must understand the mechanics of the forex market, trust your analysis and follow the rules of your forex trading strategies.