Forex (foreign exchange) is undoubtedly something you’ve heard or read about, which shows how widespread its use has become. However, there are a large number of people who are curious but do not have a thorough grasp of how the South African financial market operates or just do not know where to begin.
As commodities, currency pairs serve as a representation of the value of two different national currencies in the forex market. The base currency is the first one stated in the pair, while the quotation currency is the second.
FX trading is getting more popular as a result of the ever stringent financial reality we are all now confronted with, right? Here you may start making money without having to leave your house. To securely trade forex, you must choose a reputable broker that places a high value on fair trading conditions and prompt payouts.
Except for the typical market difference between the ask and bid prices, FX has no fees for trading activities compared to other markets.
For those who desire to participate in the global market and gain trading knowledge, certain brokers provide this possibility. The broker is a rising star in South Africa’s financial services industry. Nowadays there are many brokers in the industry who offer promotions for FX traders in order to attract more new investors and encourage the comparatively old ones to become their loyal clients. Because of that, the number of new accounts increases in South Africa as time goes by. In addition to that, since hundreds of fresh accounts are established worldwide each day, the forex market is regarded as the most accessible for traders. The most beginner-friendly market for trading activities is one where respectable brokers are enthusiastic about offering a wide range of training resources and tips to help novice traders become more efficient traders.
How To Start Trading Forex In SA?
Trading in the foreign currency market requires a particular set of knowledge, talents, and moral traits, just like any other job. So, what are the best ways to trade forex in South Africa to reach the top?
It will be much easier for you to grasp a trading book, article, or video if you are familiar with the terminology and fundamental principles of the forex language.
To begin with, there’s a good possibility you’ll be sidetracked by dubious material, which you’ll read but still not fully grasp.
Whatever you need to know about forex trading is available to you, whether it’s in the form of articles, books, or videos. There are several forex brokers in South Africa, but not all of them adhere to the industry’s strict trading standards. Make a list of the criteria you’re looking for when selecting a broker. Consider your own requirements, and you’ll be able to identify your broker’s best qualities as well as any possible stumbling blocks.
The FSCA oversees and regulates forex trading in South Africa. FSCA regulation is required for all South African-based brokers, however, it is not required for foreign-based brokers. No matter where they are located, anyone may lawfully open an account with any Forex broker, regardless of where they are situated.
Any FSCA certified forex broker permitted to provide Derivative products to South African traders allows South Africans to lawfully participate in the foreign exchange market. In 2017, the daily forex trading volume in SA was estimated at around $19.1 billion USD. The South African Rand (ZAR) is also one of the world’s top 20 most traded currencies, with 2016’s yearly trading volume totaling about $70 billion US.
Failing to plan is intending to fail in the currency market. It is more probable that you will benefit regularly if you master more tactics.
Price action trading, often known as day trading, is a kind of trading where all deals are closed at the end of the day. An investor may avoid overnight losses by setting a time restriction on their trading. While foreign exchange markets operate around the clock, weekend movements may be rather startling.
Day traders are opportunistic and use many of the same trading tactics as price action traders. In addition to having a greater frequency of trading, this strategy is also more volatile than other strategies such as position, range, or trend trading.
Range traders may keep a position open for a short period of time, or even for many days. This kind of trading utilizes support and resistance levels to attempt to profit from broader patterns.
When a currency pair is moving in an unpredictably wide range, range trading is an effective strategy. Traders that are consistently successful purchase at the lows of the range and sell at the highs.
The time period for trend trading is the same as that for range trading. The main distinction is the direction in which the currency pair is going, as opposed to a range.
The successful trader will be able to determine the trend (which is generally merely up or down) and trade in accordance with that information. Small pullbacks are generally ignored in favor of larger gains.