The Forex market was once only related to the big institutions due to its enormous strict financial requirements. But things have changed, and individual traders and small businesses can take advantage of the world's popular liquid market.
Since the '90s, Forex Trading has been getting popular, and now the estimated global average volume of this market is $6.5 Trillion. Its popularity is increasing daily in South Africa due to the advancement in communications technology. This legally Forex Trading is a great opportunity to earn rewards!
But what's making you stay back? The fear of not taking the risk or other's people bad experiences?
Then you must help yourself get through it on your own with this guide. As complicated the Forex Trading may sound, it is just the simple hidden strategies you need to figure out.
What is Forex Trading?
Forex is another term for Foreign Exchange, also called FX or currency market. It relates to the profit made through a low minimum deposit on currency fluctuation. The trading of currencies in the largest financial market works 24/7 and generates trillions of dollars of currency exchanges.
Suppose you purchase a currency by suspecting its value worth against any other currency, and the same goes for selling currency whose value is supposed to decrease. Now, it's time to exit the trade and get the results by receiving a comparison between the trade's entry and its exit price. So, it's a chicken and egg situation.
But things do not end here. To make some good decisions, you need to learn about the following key aspects of Forex Trading in South Africa:
How to begin Forex Trading in South Africa?
To get yourself rolling in Forex Trading, arrange some capital and a good internet connection. Next, get yourself signed up with a regulated Forex broker authorized by FSCA to help you with the advanced trading operations and platforms with featured automation. Safety to your funds!
You will discover 100+ brokers that recognize South African traders.
Once you know the opening of your trading account, next on the line is learning the dynamics of Forex Trading and measuring the causes of profit/loss.
Most importantly, get yourself a list of the most important terms that will appear in the world of trading and understand their usage. Like:
- Lot sizes: It is when you sell "currency pairs" in units. It has a greater impact on the overall result; the greater the lot size, the higher the profit/loss and vice versa.
- Leverage: The amount you borrow from your broker to boost your position and multiply returns while having low capital is known as Leverage.
- Margin: It refers to the money you add up while opting for currency trade and is set aside in your account.
- Stop loss: When you want to exit a losing trade, you set a stop loss at the beginning of buying and selling.
What are the Top-notch Forex Trading Strategies?
Here are the two most acknowledged strategies of successful Forex Traders that a beginner must pinpoint right now:
The technical analysis strategy requires various indicators and price charts for the currency trade. It is considered vital for both day trading and swing trading, and the decision is based on the historical price of the asset for future movement.
It is the Fundamental analysis that Forex Traders make on the basis of the news release of the country's economic indicators. So, you can determine the value of the currency and its movement by having knowledge about:
- Inflation status
- Economic growth rates
- Interest rates
- Monetary policy
- Unemployment etc.
In order to know which strategy works best for you, get yourself fully acquainted with the demo version of Forex Trading. Here you will practice analyzing how currencies get affected by the news-times using the strategies in combination.
For information related to such topics, consult the online Forex Calendars for free!
To Sum UP!
To become a better Forex Trader, you need to get a hold of the tools and their technical indicators as mentioned above. Analyze the markets' maneuver with wide eyes open, so you can evaluate the risks and eliminate errors beforehand.
That is why it is said to learn money management skills first. As 78% of retail traders easily lose their money due to negligence of understanding the essential trading strategies.
Moreover, get in touch with the South African most Prominent Forex Trading Platforms like:
- MetaTrader MT4/MT5
- Web Trader
- Copy Trading Apps
- Proprietary Platforms