Forex Trading in South Africa: A Beginner Guide

New to Forex trading in South Africa? This market may sound really complicated and scary to tackle but it’s not. Just like in any kinds of trade, you make money when you buy low and sell high. Forex trading is simply trading currencies in the Forex market.

Forex is the largest financial market in the world. It generates trillions of dollars of currency exchanges every day and it operates 24 hours a day and seven days a week therefore, also making it the most liquid market in the world.

In the world of Forex, trading in this very liquid market is very unique compared to other financial markets like stocks. Since the Forex market operates 24 hours a day worldwide, which starts at Sydney and ends in New York, trading is not centralized in one location. You can trade in Forex whenever you want regardless of the local time.

In the past, Forex trading was only offered to large financial institutions, like banks. And, it was also only offered to large companies, multi-national corporations and large currency dealers. This is because of the large and extremely strict financial requirements the Forex market imposed. This means that individual traders and small businesses are not able to participate in this liquid market.

However, in the late 90s, Forex was made available to individual traders and small businesses. This is due to the advances in the communications technology. High speed internet made it possible for people to enter the Forex market and have become one of the best make money at home businesses.

Forex Trading SA Popularity

Forex trading in SA is getting more and more popular each day. Besides, who wouldn’t want to trade in the largest and the most liquid financial market in the world? Trading in Forex will certainly give you the opportunity to earn a lot of money. However, trading in this ever liquid market also has its risk. It is a fact that many people who traded in Forex lost a substantial amount of money and some of these people are seasoned traders.

This is why it is very important for you, as a beginner trader in the Forex market, to have the proper knowledge and education on how to trade in the Forex market. Firstly, there are hundreds or even thousands of available websites on the internet that offers Forex education. Some of these websites offer dummy Forex trading where you can practice trading in the Forex market using dummy money.

These programs will really take you closer to actually trading in Forex. Many experts say that you’ll never really understand how Forex really works until you traded in the market. So, if you want to learn how to trade Forex, you may want to sign up for a dummy account that numerous Forex trading websites offer.

With a dummy account, you can trade Forex by not using real money at all. With this program, you can practice your knowledge and skills in trading in the Forex market and not waste money.

To get started in trading in this market, all you need is a computer with a high-speed internet connection, a funded Forex account, and a trading system. These three simple things are enough to get you started in Forex trading.

Minimizing Risk in Forex Trading 

For you to minimize the risk of losing money, you need to have some basic knowledge in charting before you start trading. In most Forex trading systems, Forex charts are there to assist you with your trades. Forex charts are a visual representation of the exchange rates of currencies. This is where you will mostly base your decisions to buy and sell currencies. You have to learn how to read the different Forex charts for you to successfully trade in the Forex market.

Each Forex chart is different although they represent the same fluctuations. For example, in the daily Forex chart, you can evaluate market trends in the past 24 hours to help you make decisions on the next 24 hours of trading. In the hourly chart, you can use this chart to spot trends within the day. And, in the 15-minute chart, where it can help you recent currency fluctuations in a 15-minute interval to help you decide on which currency to buy and sell. Sometimes, there is 5-minute chart available to better help you get closer to the action.

These are the basics of how to trade in the Forex market. Always remember that aside from the promising earning potential that you can have in the Forex market, there are also underlying risks that you have to consider. It is therefore wise to trade in this market with a proper investment plan and strategy. If you are just starting out to trade in Forex, consider opening a dummy account to help you practice trading Forex without risking money.

An Introduction to Forex Trading For Beginners South Africa

Forex is the nickname for the Foreign Exchange Market.  In the United States, there are several branches of the stock market, each with its own name.  For instance, some stocks trade on the Dow Jones, others on Nasdaq.  Of course, all stock market transactions in the United States take place on the New York Stock Exchange (NYSE).  In other countries the same is true.  There may be one or more distinct markets.

However, international trade takes place on the market termed the Foreign Exchange Market or Forex.  Several countries across the world in every time zone participate in trade on Forex.  With multiple currencies being utilized and stocks and commodities from all participating countries being offered for trade.  So many countries and Time zones are involved. Hence, Forex does not function as a “business day” entity like most domestic stock markets.  It remains open for trade 24 hours a day, 5 days a week.

Forex Hours

Of course, these additional hours increase the risk factor intensely for those of us who are human and obviously cannot monitor our investments 24 hours a day.  This means that the value of your holdings could potentially plummet overnight. While you sleep, because other countries are still trading while you are in a dream world. 

Final Thoughts

Again, it is like a car – there are many moving pieces under the hood, and just because you cannot see them does not mean they are not functioning. This is one reason for several safety options, like limit orders, which we will discuss later.  It’s recommended that your first attempts to make money on the market are not transactions that take place within the Foreign Exchange Market. But on a standard nine-to-five domestic trading market.

Also published on: https://tradeforexsouthafrica.co.za/forex-trading-for-beginners-pdf-south-africa