Beginning the journey to Forex trading
Online trading is becoming increasingly popular, with Forexbrokers.co.za reporting 109 000 Forex Traders in South Africa, which is the second-highest in Africa following Nigeria. However, the volume of South Africa’s Forex trading in 2019 was the highest in Africa coming in at $20.3 million.
Dany Mawas, Regional Director at INFINOX, a leading CFD and FX broker with an international presence in more than 15 countries including South Africa, attributes these results to technological advances, which makes trading convenient and fast. Traders can now trade from anywhere and at any time, and will get quick, easy access to the markets.
“Apart from the potential of achieving lucrative financial returns, additional benefits of trading Forex include greater financial knowledge and developing skills associated with trading like discipline and emotional control,” he adds.
How to start trading
There are those that are apprehensive about starting online trading, due to the associated financial risk. To put them at ease, Mawas notes that while fine-tuning trading skills comes with experience, the best way to start is to open a demo account with one of the many online trading partners available today.
“A demo account is a simulation account that provides users with the opportunity to place trades and to become accustomed to how markets move,” he says.
Additionally, some online trading brokerages provide bonus incentives to boost traders initial deposit and give them a better platform to start on. With INFINOX, traders are only required to deposit as little as US $50 and will, in turn, receive an additional US $25 bonus. Meaning that 33% of their at risk capital is the bonus.
However, he points out that traders should also do their due diligence when selecting the brokerage to partner with and not only base their decision on the starting bonus. “This includes investigating where the brokerage is regulated, and ensuring it has a physical presence instead of merely being an online entity,” says Mawas.
Determining your plan of action
Mawas notes that although there are several game plans that beginner traders can adopt to gain profits on their investments, the old adage of ‘over-analysis leads to paralysis’ couldn’t be more true. “When developing a strategy, it is vital to spend time researching and learning what works best. The more you perfect managing your risk, the better you become. If I could give one piece of advice, it would be to start simple and keep it simple.”
Mawas emphasises that trading is a humbling experience due to its binary outcome of either making the right or wrong decision. “As such, it is important for traders to have emotional control and the willingness to learn from their trading mistakes.”
Being emotionally invested can be detrimental to success, he adds. “Often, when the market dips, traders will make the emotional decision to continue trading in the hopes that they recover quickly, which often doesn’t happen. It’s imperative to assess each situation for what it is and to make the most informed decision.”
Why trading is more accessible
Events such as COVID-19 have prompted people to stay more up-to-date with current news, says Mawas. “This is important as the outcomes of these events have an effect on the markets. Nowadays people are more clued up than they think they are when it comes to knowing what is happening and what could impact their trading. This knowledge makes trading more accessible for those that wish to start.”
He also states that the internet is full of useful information for new traders to digest, and that websites such as IX Intel offer manuals and how-to guides to help traders learn the basics of a successful trading career.
Mawas points out that the rise of social trading has also increased accessibility for beginner traders. “Social trading apps such as IX Social, allows users to access all the financial markets at their fingertips with the added bonus of tapping into other traders’ knowledge. Users can auto-copy top traders and receive the same results that they do.”
“Today, online trading is an easily accessible journey, and anyone can be successful if they use the right tools and spend time developing the necessary skills and acumen,” concludes Mawas.