South Africa is one of the most prosperous nations of the African continent. It holds the position of being a significant exporter of precious metals like platinum and gold that contributes significantly to its GDP.
The total amount of services and goods export in South Africa account of 29.56 per cent as per a report (South Africa trade statistics) in 2018. It acquired US$ 93,597 million. Also, it's a world-renowned tourist spot.
So, there is a massive influx of forex money. Hence, it lands the citizen of South Africa in a preposition of making profits by learning a few tips in how to trade in the foreign exchange market.
Forex trading tips for a novice South African trader
Any citizen who wants to make the most of reigning culture of forex trading should witness the market and factors pushing the changes in its prices. There are plenty of currencies and currency pairs. Learning about them and their fundamentals is quintessential before taking a plunge in the financial market of infinite possibilities.
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Need a fast internet connection:- Forex exchange transaction is all bout time management. A fraction of second can see the market taking different trajectory, and profits may convert to losses. So, aligning with the best internet connection in the market will save extra time for bidding and buying. When there is no latency, in that case, a trader gets empowered to invest in possibly the best currency pairs in the financial market. The reaction time is less and benefits spikes exponentially.
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Pick the finest broker: After setting up a swift internet connection search for the best online broker must expedite. There are brokers like Oinvest in South Africa that can serve the expectations of beginners in the forex market and regulated by the authorised body of regulation. Ensuring the control of a regulatory body instil the confidence of genuine work process. However, in the case of an offshore broker, it may not apply. Hence, choosing an inhouse one is advisable.
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Open an account: Having selected a good online broker, its time to create an account by providing essential details ranging from name to address proof and bank account. However, one should diligently follow the instructions before filling the information.
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Try demo account features: Before jumping to fund the money in the wallet for trading forex, a trader should first try the demo feature, if provided by the broker. After trying all the features satisfactorily, one should decide to take a plunge in the real ecosystem.
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Put funds: Now, post the satisfaction; it is the time to fund the wallet with some amount to initiate forex trading. One can do it by connecting the bank account or directly through credit or debit cards.
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Download platforms: Most of the brokers have mobile and other apps for making trading compatible with the need of an investor. Also, reputed brokers own proprietary platforms that can be downloaded for use.
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Start trading:- Once, everything is set up and ready, it is time to enter the world of professional trading and reap the fruits of analysis and astute investments.
Forex trading tips to earn profits
Besides the conventional ways of trading in forex via sell and buy of currency pairs, here are some other ways that a South African can attempt.
Shorting:- If a trader is assuming that the value of the currency would dip in the future, then he/she can borrow that currency and sell it at when it surges at a higher price and buy that back later on at a cheaper cost. The process is shorting.
Carry Trading:- Similar to when a person keeps the money in the bank, he/she receive interest, holding currency pairs reap these rewards for the holder. Carry traders draw gains from the interest rate difference of several currencies.
Binary Options: The option is more of like betting. Here, the trader is asked to comment on the price of the currency pair on a given date. If it reaches the threshold, the money is made, else the owner losses it all.
