Learn How To Trade Forex In South Africa In 2021
Learn How To Trade Forex In South Africa In 2021: Forex is wildly popular in South Africa. Traders connect to the market online, turning knowledge into profit. Discover key opportunities for beginners.
What Is Forex Trading and How Does It Work?
In South Africa, Forex is a buzzword. The pandemic hit its economy hard. Unemployment has soared, and making money through the Internet is in the spotlight. Trading is not a novelty — this concept is decades old. Learn what is Forex trading today and why it attracts millions of people globally.
Why Currencies Can Bring Profit
Forex is the biggest financial market with simple logic. Traders can buy low and sell high, as the exchange rates are never static. Since the 1970s, they have been floating. Value is driven by political and economic factors. In the past, it was pegged to the US dollar, while the latter was backed by gold.
Suppose the rand suddenly surges. Traders with more rands may now sell them for a tidy profit. This premise is universal. There are dozens of combinations, as currencies are always traded in pairs. For instance, the rate of EUR/USD shows how many US dollars one euro costs. You sell or buy euros for dollars.
Forex is the biggest financial market. Every day, banks, hedge funds, businesses and individuals exchange 5+ trillion dollars worth of currencies. This process is an organic part of international business, trade, and tourism. Somewhere in the world, currencies are being exchanged at any moment. This market rarely sleeps. Sessions in different time zones account for its unstoppable activity.
How to Choose a Provider
Forex regulations vary around the world. In South Africa, this industry is monitored by the FSCA (Financial Sector Conduct Authority). This organization issues licenses to compliant brokers. One company may have approval from other jurisdictions as well. For instance, the Forextime broker is licensed by the FCSA, the FCA in the United Kingdom and the CySEC in Cyprus.
Despite tightening regulations, scam is still widespread. Local traders must choose their brokers with the utmost caution. Honest providers have transparent policies and conditions. Their licensing details are found in the footer of their home page.
Make sure the company has high-quality support. Forex trading happens across time zones, 24 hours per day. Reputable companies have customer care departments that work every weekday. Their websites are also packed with educational materials like articles, tutorials, podcasts, etc.
How to Become a Trader
Your broker will guide you in the right direction. Reputable companies have plenty of information on their websites. They post articles, tutorials, links to webinars, and more.
Forex has been thoroughly researched since the 1990s. Google the term and you will see countless resources of any kind. Even YouTube has dozens of channels dedicated to trading insights.
Forex beginners apply theoretical knowledge to virtual trades. Demo accounts are quick and free to register. They unlock trading software in its training mode. The system imitates real market conditions, but there is no financial risk, as no deposit is required.
Get used to the environment and see how all the features work. Later, when you trade with real money, you should not be distracted by technicalities. This explains why newbies are advised to spend a few months using the demo mode.
Tips for Success
Nobody becomes a stellar Forex trader overnight. Learning is an incessant process. After 2-3 months of demo practice, you may switch to live trades. Work in the real market is stressful and demanding. Here are a few tips to help you achieve more:
1. Choose Your Style
Different strategies require a different pace of analysis. Scalpers work the most intensely, swing traders take a long view, etc. Learn about popular methods and choose the one matching your lifestyle.
2. Control the Risk
Forex is inherently risky. Traders may not control world currencies, but they can foresee their movements. Learn to protect your capital before raising the stakes. Use Stop Loss and diversify your instruments. Never risk more than 2% of your balance per trade.
3. Accept Mistakes
No expert is infallible. Mistakes may and will happen. The key is to acknowledge them as lessons. Every loss is an opportunity to improve your strategy.
4. Keep a Journal
This way, it is easier to track progress. Note down key parameters of every trade, such as volume, volatility, etc. Review performance weekly to see if the strategy works for you.
Do You Think You Can Trade Forex?
Anyone can work with currencies, but do not expect to master this subject overnight. Experts use proven strategies and automatic tools. Learning never stops, but there is a wealth of helpful resources and services.
