Right now, things get gradually expensive. Some South African citizens can manage through all the expenses and some are working as hard as they can for minimum wage. Others may be forced to work two or in some countries, may be more than two jobs a day.
Well, in this article we will try to help you by introducing an interesting method of making more money to cover up your expenses and make you wealthy. That is the fascinating world of Forex Trading.
How Forex Works in South Africa 2020
What is Forex Trading?
To start up, before knowing what is Forex trading and how does it work, you must basically be introduced to what Forex is. Forex (FX) which stands for foreign exchange is the international marketplace for trading and exchanging currencies. Currency exchange is crucial across the globe in order to conduct foreign trade and industries.
The Forex Market is the most massive and most liquid market in the world. The daily turnover of the market is five trillion dollars. Such an intense amount of cash!
The greatest and most unique feature of Forex is that there is no central marketplace. Forex transactions are conducted electronically over the counter. This means that the transactions occur online between traders from all around the world.
The market is open for 24 hours for five and a half days, making it one of the most available marketplaces ever. Currencies are exchanged in the great financial centres of London, New York, Tokyo, Zurich, Hong Kong, Paris and Frankfurt. Forex Trading is authorized by almost all the countries.
How Forex Trading works
Forex trading is basically the act of purchasing and selling currencies in order to make a profit. The prices of multiple currencies is linked in a trade. So, while trading, you’ll be constantly working with two currencies.
It seems a bit simple but you shouldn’t underestimate Forex Trading. In this particular industry, the rate of failure is exceptionally high among new traders, as there the learning methods are almost nowhere to be found now.
Even traders that are aware of that tend to be careless as well. They think to themselves “Why would it happen to me?” In the end, the majority of these traders walk away empty-handed, not quite sure what happened to them, or maybe even feeling a bit scammed. While the ugly truth is, they were careless and foolish.
Forex trading is an industry that is essentially set up for insiders that understand it. New traders should try to survive long enough to understand the inner workings of foreign exchange trading and become one of those insiders, and this will come with studying the market, understanding the terminology, and learning trading strategies.
For a beginner, it’s always better and safer to start step by step and with less money. Don’t rush things up. It’s common that your first trade might not go as planned. You should also think of having and executing a backup plan in case everything doesn’t turn out as it seemed at first and the trade isn’t as profitable as expected. Walking out of a losing trade is better than continuing in it and turning everything into a complete disaster. The most important thing is never to consider giving up an option. You should see failure as a chance or a warning for you to keep learning and trying again.
Forex trading has a simple aim. Just like any other form of speculation, you want to buy a currency at one price and sell it at a higher price in order to make a profit.
All currencies are divided or grouped in pairs. This means, you’re actually trading two currencies simultaneously, you purchase one and you sell the other and vice versa
The first currency of a currency exchange pair is called the base currency, while the second is called the counter currency. If we take EUR/USD exchange for example, euro would be the base currency, and the US dollar the counter-currency. If you want to buy the EUR/USD exchange pair, you’re actually buying the euro and selling the US dollar at the same time.
In Forex, you can trade using a lot of international currencies like: US dollars, euros, Australian and Canadian dollars, Swiss francs, Great Britain pounds, Japanese yen, New Zealand dollar, Russian ruble and many more
The most famous and the most preferred currency to deal with is the US dollars. Of course, due to the massive and wide range of the American economic power, it becomes nothing to think about for people to trade using US dollars.
Now then, in order to enter this world of Forex Trading and browse the financial markets and currency exchanges, you have to create a brokerage account. Opening a brokerage account is pretty easy and can be done in mere moments by filling out the registration form on the broker’s website. After that, the broker will check your application and activate your account, which makes it then ready for investing. Many brokers accept credit and debit cards, online payment services, and bank wire transfers for deposits, so you can choose the way that is most convenient for you.