Forex trading is governed by the Financial Sector Conduct Authority (FSCA) in South Africa. You need to be at least 18 years old and understand the foreign exchange market well to make reasonable profits. Remember that it is a high-risk venture, and you should be prepared to face potential losses that may occur.
Forex brokers in South Africa must be licensed under the FSCA to provide trading services to its clients. As a result, you should only choose licensed brokers as they can safeguard against unnecessary risks and protect you from scammers. Here is a quick list of five ways to get started with forex trading today:
1. Learn about Forex Trading
Understanding the forex market is crucial before you start trading. You must understand how different factors influence the market, such as politics, events, and finance news. Moreover, you need to be able to understand and create analysis reports as well as learn about trading strategies.
Other essential factors include identifying the best trading sessions and currency pairs. The London and New York trading sessions are often recommended for individuals. They occur between 8:00 AM to 4:00 PM GMT for London and 12 noon to 9:00 PM GMT for New York. You should identify how it corresponds according to the local time in South Africa.
2. Choose the Best Forex Broker
There are many reputable licensed forex brokers in South Africa. You should do your research and compare them with each other to choose the one best suited for your needs. Each differs in terms of services, platform, and trustworthiness. Look for one who can guide and support you through your journey as a beginner without overleveraging. Some forex brokers also provide their clients with the latest information and trends in the market to help make crucial decisions.
3. Practice with a Demo Account
Most forex brokers provide a demo account with test funds to get started with forex trading. It is important to note that you cannot withdraw or incur losses with a demo account. You can use your knowledge to predict the market movements to trade in currency pairs. The most traded pairs are JPY/USD, USD/GBP, and USD/EUR. It will help develop confidence and provide valuable insights before trading with your savings fund.
4. Go for Lower Spreads
You must have a trading strategy in place or have yet to have one. Most experts recommend going for lower spreads. Forex brokers earn money on spreads, which is the difference between a currency’s buying and selling price. A higher spread means a big difference, and vice versa for lower spreads. It will help generate more profits and avoid incurring significant losses.
5. Make Use of Tools
Different forex brokers in South Africa have distinctive platforms with their respective tools. Some important ones include real-time news and data, technical analysis tools, and helpful charts. They provide crucial information to make informed decisions for trading and help generate more profits. You can ask various forex brokers for free trials or demos to identify the best one that is easy to understand and implement. Some forex brokers also provide additional services such as extensive research and economic calendars to help base your decisions.
