Written by: Shaley
WHY FOREX TRADING IS SUDDENLY INTERESTING IN SOUTH AFRICA Forex trading is basically the buying and selling of currencies. The value of one currency is weighed against the perceived value of another with one being the base and the other being the counter. Typical forex market currency trade looks like this: USD/ZAR with the USD being the base and ZAR the counter.
The allure of Forex Trading in South Africa The internet happens to be awash with advertisements from brokers and trading companies promising to make you a millionaire within no time and more so without having to work a 9 to 5 job. Social media has also contributed to the lure of forex trading and the gold mine it supposedly is in South Africa. The forex South Africa industry has suddenly become a hotspot for traders claiming to have made it big as a result of their being in the industry. Most of them also happen to be in their youth and document their flashy lifestyle on social media crediting their success to forex trading.
As a result, the thought of living the kind of life these traders do is irresistible to most South Africans. It has become a sort of get rich quick scheme with everybody wanting to have a taste of the pie. Another reason that seemingly makes this an ideal investment opportunity is the flexibility it affords one. You can choose what hours to work and where to work from as long as you have currency in your trading account. Motivating most of these upcoming traders is also the potential huge returns that seem to result from trading, going by the number of successful gurus all over the social network sphere in the country.
The truth about Forex Trading Every trade or business has its pros and cons and forex trading is no exception. Experts in South Africa are of the opinion that despite all the glitz and glamour surrounding the prevalence of forex trading in the country, there are also downsides that most of the brokers and agents will not willingly reveal. There is some truth in that the industry has the potential of earning you mind boggling returns but there is also a very high likelihood of losing all your investment in a matter of minutes.
The trick with forex trading is to keep your eye out on the international markets in terms of business, politics as well as international relations. Other than that, for you to earn astronomical figures, you need to make a significant investment as each trade earns pennies on the dollar or whichever currency you choose to trade. Industry experts warn investors daring to try forex trading that they should brace themselves for anything even as they hope and plan for the best.
What you need to know if you are considering forex trading It is a speculations game: most traders trade generally on speculation even though market trends play a role in a trader’s investment decision. That means chances of being wrong on your hunch are just as good as of your being right. It is not a get-rich-quick-scheme: the forex market despite being the most liquid in the world happens to be the most volatile. The erratic changes also make it among the most unpredictable. The high returns one can enjoy means that it is a high risk area. Nothing is as simple as it looks or sounds. Money will be lost: if you are a newbie looking to join the Forex industry in South Africa, expect to get your fingers burned before you get the hang of it. A lot of new traders, according to Chrizette Rossouw of Real Trader stand a 95% chance of failing.
Scams are real: as a South African, I am sure you are not new to pyramid schemes and the like. There are brokers and agents whose only interest is getting your hard earned cash and then vanishing, so beware.
In case you decide to invest… You will need to settle on a broker to engage. There is a good number in South Africa even though some are not genuine. The broker you settle on will require that you open an account with them and you will furnish them with your name and phone number. A good one will contact you to discuss on the best way forward while they ask for further documentation. Then you will need to make a deposit in your account to access the trading platform and enable you to kick start your forex trading.
Lastly, there is no dispute that forex trading could accord you financial freedom. However, like I mentioned above, it is just not as easy as it has been made to sound in South Africa. Your best bet would be to enroll for training first before you even think of looking for a brokerage firm. You will need to learn terminology in the field such as pip, pivot point as well as the role of momentum in forex market. Training will teach you market analysis which is a crucial part of success in trading not forgetting you will learn how to calculate your return on investment as you leverage your trades.
Train first before you dare to go. That way, you will be able to make the right choices when you start trading. You will also be guided to the best brokers in the country where you are assured of professional help whenever you need it and security for your deposits.