Online trading has gone through numerous changes in the past few years and become one of the most popular activities among people. Considering the devastating consequences, the coronavirus pandemic brought to the world, being at home, more opportunities emerged for trading.
Currency trading on the Forex market is a popular direction for those who want to start trading on currency quotes without any special knowledge in South Africa. This is a country that has shown considerable advancement in terms of FX trading and indicates no signs of slowing down. The coronavirus pandemic has especially contributed to the development of Forex in SA. Stories about prominent trades are publicly announced. However, the word Forex itself raises many questions for beginner investors in South Africa. Let’s have a look at the measures that should be taken into account before trading.
Choose a Proper Broker
The Forex market is an over-the-counter market, so buying and selling currencies takes place without actually interacting with it. Price formation is carried out on the basis of supply and demand. To start trading, a person needs to choose a broker and a trading platform. Hundreds of platforms have been developed for online trading, the functionality and features of which you need to familiarize yourself with before starting cooperation.
When we talk about South Africa it is advisable to start trading with brokers that have the license from the FSCA. This is the main regulator in the country and you can be sure that brokers will provide you with all the necessary tools required for trading.
Specify Your Budget
It is possible to start Forex trading with just a few dollars. Of course, you will not get massive earnings immediately, but it is a good way to understand the basics of this industry. In general, a minimum amount to start Forex trading could vary, depending on the broker. Some South African brokers have large requirements when it comes to trading, while the other ones could allow you to start with just $10.
Always make sure you start trading with the amount of funds you are willing to risk. Never go too deep unless you have enough experience. In such a way, you will only end up in a situation where you lose funds.
Choose a Proper Instrument
South African brokers offer a wide variety of trading instruments – from currency to stocks and metals. First, you need to find out which instrument is the most suitable for you. After getting enough knowledge and information, you can start trading. Different trading instruments have different advantages, in terms of volatility, income, and difficulty. Do not hesitate to spend your time choosing a proper instrument, because it will be helpful in the future.
For a lot of people, Forex is a secondary choice and they prefer stock trading. The latter has numerous advantages, of course, but it is not suited for every individual.
Selection of a Trading Platform
A trading platform is a broker’s tool that allows him to monitor currency quotes anytime and anywhere. Modern programs allow you to enter the Forex market from a computer, laptop, smartphone, tablet. So, you can stay up to date on financial affairs in public transport, parks and other places. The main thing is to have access to the Internet.
There are several programs for trading “from the spot” – these are MetaTrader 4 and MetaTrader 5. However, to work in the “field” conditions, it could be better to choose applications for mobile devices, such as WebTrader, etc. A proper choice of a trading instrument is pivotal. Some traders in South Africa can only use cTrader, while the other ones are more focused on MetaTrader
A novice trader needs to understand the terminology of the market. Without the knowledge of some terms, he simply cannot trade with knowledge. Among such definitions is bid, ask, deal, base currency, rate, spread. Often these words are misunderstood, which creates confusion among traders.
The Forex market is a good tool for making money. But you shouldn’t hope for easy money. A novice trader should already have some knowledge: understand the terminology, understand the basics of platform operation, study trading strategies. Only measured steps will allow you to make progress. Otherwise, Forex trading may not bring rewards, and the person will be left with the false idea that he was deceived.
Learning, Learning and Learning
Forex trading does not stand still – it is something that develops rapidly. In South Africa, especially, the trend has firmly gained a foothold. More and more brokers are appearing and sometimes finding the right one could become a problem. You should not forget that experience and knowledge are pivotal. Without them, you may not be able to trade in the market. Always make sure you gather enough information from websites and people that know more about you.