The global pandemic has changed our perception of work. Around the world, lockdowns have caused countless bankruptcies and accelerated the adoption of remote technologies. South Africa is no exception. It will take years for the country to return to its pre-crisis condition. Now, the economy is in shambles, and residents need new sources of income. Online trading is a popular way to earn money.
You may be familiar with Forex. The largest financial market is now accessed online. Every day, institutions and individuals buy and sell immense volumes of currencies. Turnover estimates vary. What is clear, though, is that trillions of US dollars circulate in this market daily. Through trading platforms and apps, anyone can try to benefit from this bustling activity.
First, learn as much as possible about the market you will trade in. In addition to currencies, one may access stocks of the largest corporations, derivatives, precious metals, and more. Choose instruments you understand best, and monetize your knowledge. To enter those markets, you need four things:
- an account with a brokerage,
- trading software,
- knowledge, and
- the right mentality.
A registered account is your gateway to the real financial market. These companies act as intermediaries for clients. They provide access, support, and processing of all financial transactions. Brokers may be compared to online bankers, as they take care of payments to and from your account.
Residents of South Africa may trade through local and international companies. Global brands have obvious advantages, as their capabilities are broader.
Companies like ForexTime offer a rich selection of instruments, 24/7 support, and education. The brand is officially registered and licensed by trusted industry regulators. Reliable companies have nothing to hide, so you can find full license details on their official websites – usually, in the footer.
Sadly, Forex has given rise to different scams since the 1990s. Today, you may encounter fake websites with promises that sound too good to be true. Beware of any companies that guarantee quick riches. Reputable providers always stress the importance of education and the risks of trading online.
Brokers offer demo and live accounts. The first type is used for training purposes. It unlocks the simulation mode of online trading platforms so you can practice for free. The system will re-create actual market conditions, but any profit or loss will be virtual.
Every novice needs to start with a demo and explore the features of their platform. This is a great way to apply theoretical knowledge to practical tasks. You can see how positions are opened and closed, and how all features work.
To get started, fill in a simple form on your brokerage site. Usually, login and password are generated and emailed to you almost immediately. The entire process may take a few minutes.
The next step is to create a live account. The registration includes an extra stage – verification of identity and payment details. You will be asked for a copy of your ID, as this is required by industry standards. Once the account is funded, real trading can begin.
As Forex is risky by nature, do not rush headlong. Take time to gain experience – it will help you avoid devastating losses. There’s always a possibility that market forces will work against you. The job may be approached differently: there are short-term and long-term strategies.
Trading is not for the risk-averse. You need a certain degree of courage to begin. A safe and profitable investment is fiction. Where there is high return, there is always high risk. Any company promising quick and easy riches is a fraud. Losses will be made, but there are ways to keep them under control.
Traders must learn to establish Stop Loss and Take Profit for every position. These technical features allow exit at desirable price levels. Even if you fail, you know exactly how much you lose. Without precautions, you can wipe out your account in no time. A single reversal will deplete your balance. When trading on leverage, this is particularly damaging.
Last but not least, pay attention to emotions. You may be surprised, but emotional control is very important for traders. Strong feelings are common causes of poor judgment. Traders may act on the spur of the moment, for example, sell everything when the market is in panic. It is important to control impulses and be rational. If you’re feeling upset or ecstatic, refrain from trading for a while.