The first thing that makes the Forex exchange attractive for beginners is finding out the basics of trading right here. Before becoming a trader, it is important to:
- Choose a suitable broker to carry out transactions (he will provide both software and “leverage”);
- Understand the terms, study the basic methods of analysis (fundamental – for the country, technical – for specific operations);
- Download software (terminal, most often – Metatrader of a suitable version);
- Try out the main types of operations in demo mode and not on real money.
Some of key tips for Forex trading in South africa are as follows:
- Trade not on a schedule, but when you have a balanced, well-thought-out decision.
- Don’t read everything – choose the most important ones from trusted sources.
- Study trends, but don’t focus on them.
- Think over scenarios of actions, do not rely on “sudden inspiration.” Know exactly when you will stop operations.
Difference between Forex and Stock Exchange
Since Forex is not an exchange but an over-the-counter market, the difference between Forex and a stock exchange is enormous. The first and most important difference is that Forex does not have a specific country, city, and work address. This is a group of banks and other organizations united by a common system for conducting financial transactions. The second difference is that it is impossible to check the volume of transactions. Therefore, traditional indicators for the stock exchange do not apply here. The third difference is that private individuals cannot conduct their operations on the stock exchange. Individual can easily try themselves in the role of a trader through a series of DCs (dealing centers).
More about currency pairs
Currencies are classified into two types: major (“majors”) and minor (“minors”). “Majors” are currencies of the most powerful economies globally, and “Minors” are currencies of less powerful economies. Major currencies include USD (US Dollar), JPY (Japanese Yen), GBP (British Pound Sterling), EUR (Eurozone Euro), CAD (Canadian Dollar), AUD (Australian Dollar), CHF (Swiss Franc), and NZD (New Zealand Dollar). Minor currencies are all other currencies from countries like Mexico, Turkey, Sweden, Poland, Hungary, Singapore, South Africa, China, etc.
Advantages of Forex trading
Despite the specificity of this foreign exchange OTC market, the advantages of Forex are outlined below:
- An opportunity to start with small amounts like $ 100 and try working with a conditional demo account.
- Access to trading operations even for individuals (through DC).
- High turnover (estimated at several trillion dollars per day).
- High volatility (currency pairs overcome hundreds of points per day, making it possible to earn faster).
- In addition, the “law of supply and demand” directly operates here – real forex brokers impose no restrictions. There is no need to pay income tax – an advantage for beginners with small amounts.
- In reality, the currency is not moving anywhere – which means there are no associated costs. It is easy to increase the volume of the transaction (if it is successful) several times.
- You can work with Forex from anywhere in the world.