Online foreign exchange trading occurs in real time. Exchange rates are
constantly changing, in intervals of seconds. Quotes are accurate for the time
they are displayed only. At any moment, a different rate may be quoted.
When a trader locks in a rate and executes a transaction, that transaction is
immediately processed; the trade has been executed.
As rates change so rapidly, any Forex software must display the most up-todate
rates. To accomplish this, the Forex software is continuously
communicating with a remote server that provides the most current exchange
rates. The rates quoted, unlike traditional bank exchange rates, are actual
tradable rates. A trader may choose to "lock in" to a rate (called the "freeze
rate") only as long as it is displayed.
The internet revolution caused a major change in the way Forex trading is
conducted throughout the world.
Until the advent of the internet-Forex age at the end of the 1990's, Forex
trading was conducted via phone orders (or fax, or in-person), posted to
brokers or banks. Most of the trading could be executed only during business
hours. The same was true for most activities related to Forex, such as making
the deposits necessary for trading, not to mention profit taking. The internet
has radically altered the Forex market, enabling around the clock trading and
conveniences such as the use of credit cards for fund deposits.
In general, the individual Forex trader is required to fulfill two steps prior to
Requirements vary with each trading platform, but these steps bear further
Registration is done online by the individual trader. There are various forms
used in the industry. Some are quite simple, where others are longer and
more time-consuming. In part, this can be attributed to governmental or
other authorities' requirements, though some Forex platforms require more
information than is actually needed. Some even require a face-to-face
meeting, or to obtain hard copies of required documents such as a passport,
or driver's license.
The key requirements for registration are the trader's full name, telephone,
e-mail address, residence, and sometimes also the trader's yearly income or
capital (equity) and an ID number (passport / driver's license / SSN / etc.).
Typically, the Forex platform is not required to run a thorough check, but rely
on the registrant to be truthful. Nevertheless, each Forex platform conducts
certain routines, in order to check and verify the authenticity of the details
Registrants are required to declare that funds used for trading are not in
question, and are not the result of any criminal act or money laundering
activity. This is mandatory as part of a global anti-money laundering effort.
It is advised that the reader becomes familiar with Anti-Money Laundering
regulations, and the procedures associated with the prevention of this