Forex Trading in South Africa • Forex Strategies South Africa • Benzinga - Benzinga

Posted: 26 Jun 2020 01:04 PM PDT

Benzinga Money is a reader-supported publication. We may earn a commission when you click on links in this article. Learn more.

The Bank of International Settlements (BIS) ranks the South African rand as the 18th most commonly traded currency in the world. According to the BIS 2019 triennial report, the rand has remained within the top 20 currencies since 2004. And it is the only currency on the continent of Africa to achieve this ranking in the forex market.

Attribution: Pixabay

Strong regulation in the financial sector and the relative strength of the economy give South Africans the confidence to trade in forex at a rate roughly equal to Nigeria. Local experts actually give South Africa a slight edge in total volume, average account size and number of traders.

Get Started with Forex in South Africa

Anyone who knows how to trade forex will tell you the game is 90% preparation. Your infrastructure needs to be solid or even the best laid plans will fall flat. As the biggest financial market in the world, forex is a global competition that takes no prisoners. Here's how you can get started.

Connect online. You can connect to the world of forex and trade currencies across the world from anywhere in South Africa. Make sure you have a solid Internet connection with no built-in latency. Forex trades are all about timing, and you don't need a delayed system reaction messing up a perfectly good strategy.
Search for the best online forex broker. You can connect to forex brokers across the world. Take note of the regulatory bodies that govern your chosen brokers. South Africa has relatively strong protections, but those protections may not apply if the broker you choose is offshore.
Open the account. Your broker will have a process for you to follow to open an account. Make sure you follow the directions closely. You must properly identify yourself and connect your bank account.
Fund your account. You can begin your trading career using virtual (not real) money. When you want to start making money, you will need to fund your account. This should be a relatively simple process if you have connected your bank account. Certain brokers will also allow funding through a check, debit card or credit card.
Download your trading platform. Most reputable brokers have proprietary trading platforms. This is the user interface you will use to make your investments into the forex market.
Trade. Now that your infrastructure is set, you can begin trading in the forex market.

South Africa Forex Trading Strategies

When it comes to the forex market, failing to plan is planning to fail. The more strategies you master, the more likely you are to consistently profit. Start your journey with some vetted gameplans.

Attribution: Flickr

Price Action

If you like reading and interpreting charts, you should enjoy trading off of price action. Predict the next move, strike while the iron is hot and take profits quickly. The price action trader is more concerned with a currency pair's pattern of movement. Large macroeconomic conditions and long-term trends don't matter as much because these trades aren't meant to be long — sometimes only a few seconds (if that).

Day Trading

Day trading is a specific kind of price action trading that closes all trades by the end of the day. Placing a time limit on the action protects a trader from big overnight moves. Although forex trades 24 hours a day, weekend moves can be somewhat surprising. Day traders exercise many of the same techniques as price action traders and are opportunistic. This kind of trading is also usually higher frequency than position trading, range trading or trend trading.

Range Trading

Range traders may hold a trade for minutes, hours or days. This kind of trading tries to take advantage of larger patterns based on support and resistance levels. Range trading works when a currency pair has no definite direction — it is moving within a range that can be predicted. Successful traders buy at the low points of the range and sell at the high points over and over.

Trend Trading

Trend trading usually takes place over the same time frame as range trading. The major difference is the behavior of the currency pair — it is moving in a direction rather than within a range. The successful trader will identify the trend (usually just up or down) and trade accordingly. You will usually ignore small pullbacks and wait for bigger profits as well.

Forex Trading Example in South Africa

Let's say ZAR/USD is trading at 0.05780/0.05790 and you think the price will rise. The margin rate of this currency pair is 3.17% and you want to purchase R150,000. You will only need $275.08 in your account — the broker will let you borrow the rest.

The ZAR/USD price moves up according to plan. After 3 hours, it's trading at 0.06020/0.06040. This is a move of 23 points (0.06020-0.05790), and your profit is (R150,000*0.06020)-(R150,000*0.05790) or $345.

Making Money with Forex in South Africa

There are many ways to make money in the forex market outside of the traditional "buy low, sell high" mantra (which works just fine as well). The more you know, the more likely you are to see opportunities as they come.

Carry trading: You can make money on the directional movement of a currency pair, but you can also make movement on the interbank interest rate of a currency. When you hold a currency in forex, that's just like holding it in a bank. You gain interest on your holdings. Carry traders try to profit from the difference in interest rates of various currencies.
Binary options: Instead of taking profit or loss based on the real time movement of a currency pair, you can participate in all or nothing options. If a currency is at a certain price on a certain date, you win money. If it is lower than the pre-established price on that date, you lose your investment.
Shorting: If you think the value of a currency will decrease in the future, you can borrow that currency and sell it at a high price to buy it back cheaper later. This is known as shorting a currency.

Best Online Forex Brokers in South Africa

Your forex broker and exchange provider are your windows into the forex world. Choose wisely.

FOREX.com

Account Minimum

100 of your selected base currency

Pairs Offered

80+

Account Minimum

100 of your selected base currency

Pairs Offered

80+

1 Minute Review

FOREX.com is a one-stop-shop for forex traders. With a massive range of tradable currencies, low account minimums and an impressive trading platform, FOREX.com is an excellent choice for brokers searching for a home base for their currency trading. New traders and seasoned veterans alike will love FOREX.com's extensive education and research center that provides free, informative forex trading courses at multiple skill levels. While FOREX.com is impressive, remember that it isn't a standard broker. You can't invest in the stock or bond market through your FOREX.com and you cannot open an account with tax advantages. The confusing pricing and margin structures may also be overwhelming for new forex traders.

Best For

MetaTrader 4 users
Beginner forex traders
Active forex traders

Pros

Impressive, easy-to-navigate platform
Wide range of education and research tools
Access to over 80 currencies to buy and sell
Leverage available up to 50:1

Cons

Cannot buy and sell other securities (like stocks and bonds)
Confusing margin requirements that vary by currency
Limited customer support options
Cannot open an IRA or other retirement account

eToro

Account Minimum

$50 USD

Pairs Offered

Account Minimum

$50 USD

Pairs Offered

1 Minute Review

Though Australian and British traders might know eToro for its easy stock and mobile trading, the broker is now expanding into the United States with cryptocurrency trading. U.S. traders can begin buying and selling both major cryptocurrencies (like Bitcoin and Ethereum) as well as smaller names (like Tron Coin and Stellar Lumens).

eToro offers traders the opportunity to invest their assets into premade portfolios or cryptocurrencies, similar to services offered by robo-advisors through traditional brokers. Though eToro isn't a one-stop-shop for everything an investor needs, its easy-to-use platform and low spreads is a great way to enter the cryptocurrency market.

Best For

International Forex/CFD Traders
New cryptocurrency traders looking for an easy-to-use platform
Traders who want to buy and sell cryptocurrencies on-the-go

Pros

Simple platform that is easy to master
CopyTrader feature that allows new traders to copy the same strategies used by professionals
Virtual dummy account that gives you $100,000 to practice trades

Cons

U.S. traders currently limited to cryptocurrencies
Only 15 major coins available to trade

AvaTrade

Account Minimum

100 EURO

Pairs Offered

50+

Account Minimum

100 EURO

Pairs Offered

50+

1 Minute Review

A fully regulated broker with a presence in Europe, South Africa, the Middle East, British Virgin Islands, Australia and Japan, Avatrade deals with mainly forex and CFDs on stocks, commodities, indexes, forex, cryptocurrencies, etc. This brokerage is headquartered in Dublin, Ireland and began offering its services in 2006. It offers multiple trading platforms and earns mainly through spreads.

Best For

Beginners
Advanced traders
Traders looking for a well-diversified portfolio

Pros

Controlled by regulatory agencies of multiple countries
Choice offered in terms of trading platforms
Support available in 14 languages and trading platforms in 20 languages
Practice/demo account available for trying out
Breadth of trading assets

Cons

Does not accept customers from the U.S. as it isn't regulated in the U.S.
Transferring funds to the account may take up to five days; withdrawals could take up to 10 days

Forex Terminology

You will need to know some basic terms to ensure proper trade execution. Here are some of the most important:

Pip: The smallest unit of measurement in the forex world — $0.0001 — also known as a basis point.

Lot size: The size of the order you execute. A standard lot size is 100,000 units of currency. You can trade in smaller lot sizes known as microlots.

Orders: You tell the forex platform what you want, and it delivers your order.

Calls: Calls are contracts based around a target currency pair. Buying a call gives you the right to take possession of the underlying currency at a certain price on a predetermined date.

Open New Financial Doors

Many investors use forex to open new financial doors in South Africa. Nothing is guaranteed, but numbers don't lie. People believe the opportunity is there. Take a look for yourself and learn to succeed in the forex market.

Hire a Pro: Compare Financial Advisors In Your Area

Finding the right financial advisor that fits your needs doesn't have to be hard. SmartAsset's free tool matches you with fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is legally bound to act in your best interests. If you're ready to be matched with local advisors that will help you achieve your financial goals, get started now.

Forex Trading in Ireland • Forex Strategies in Ireland Benzinga - Benzinga

Posted: 26 Jun 2020 11:56 AM PDT

Benzinga Money is a reader-supported publication. We may earn a commission when you click on links in this article. Learn more.

One of the most stable economies in the EU, Ireland serves as a major activity hub for forex on the European continent. The Global Financial Centres Index (GFCI) ranks Dublin as the No. 5 financial hub in Europe and No. 38 in the world. Regulation from multiple financial authorities helps secure transactional fidelity and provides a safe and even welcoming launchpad for forex speculation.

Attribution: Pxfuel

The euro is 1 of the strongest currencies in the world and offers a great advantage if you want to participate in the forex market in Ireland. Keep reading for everything you need to know about getting started with forex trading in Ireland.

Get Started with Forex in Ireland

Follow these steps to get your financial infrastructure ready for forex trading.

Make sure you have a fast internet connection. Connect to a forex broker through any desktop, laptop or smartphone. If you can connect from a setup with a large screen space, that is an advantage as well. Successful forex traders base their trades on a lot of information. News, charts and account reports can be difficult on a handheld phone!
Choose a broker. In Ireland, the business of being a forex broker is competitive. Use that to your advantage to get the best one for you. Reputable forex brokers offer fast execution, proprietary analysis and helpful customer service.
Open your broker account. After you have the broker you like, open your account following the broker's instructions. Each business will have a slightly different verification process and ways to connect to a funding source.
Fund the account. It takes money to make money! You should be able to fully fund your forex account from a personal check, your bank account, a debit card or a credit card.
Pick a trading platform. Your broker may have a proprietary trading platform. If so, you probably want to use your broker's software. If not, pick the trading platform you feel most comfortable using.
Start trading. Once your infrastructure is set up, you can instantly begin to trade in the forex market!

Ireland Forex Trading Strategies

Learning how to trade forex successfully involves lots of study and knowledge of investment strategy. Here are some of the most popular forex trading strategies that you should know about.

Attribution: Flickr

Day Trading

There's only 1 rule that all day traders respect: You must be in all cash by the end of the day. That means you have to make your money quick. Day traders are not concerned about long-term moves in the market. Chart technicals are much more important than currency fundamentals. If you want to make money fast, this may be the trading strategy for you.

Day trading includes an extremely fast form of trading known as scalping. Scalping is exactly what it sounds like — you move as fast as possible, shaving profits off of the top. In some cases, you'll be on minute charts, exiting trades in seconds. Timing is everything, so make sure your trading setup and internet connection are as close to perfect as possible. You'll be in competition with some of the most powerful traders in the world, including market makers.

Swing Trading

Swing traders fall into 2 basic categories — range traders and trend traders. Both of these types have similar skill sets. The real difference in the style has to do with the movement of the market, not the trader. Range traders buy low and sell high between a support and resistance range. Trend traders catch a directional ride when a currency decides to move up or down substantially in value.

Swing trading is a short-term strategy. You may hold your position for a number of days, but usually not much longer. You may need to understand some of the macroeconomic conditions behind a currency pair but you will also need to know how to read chart patterns.

Positional Trading

Positional trading is for investors who like to profit from long-term moves. If you are in a trade longer, you can usually expect bigger moves. Positional traders aren't worried about short-term pullbacks in the market or unexpected news items. Over the long term, illogical short-term moves have less influence than macroeconomic conditions.

If you like studying the inner workings of global finance, positional trading is for you. Studying the relationships between countries and business trends should help your success rate.

Forex Trading Example in Ireland

EUR/USD is trading at 1.12161/1.12603. You want to invest in the euro price rising. You prepare to buy 100,000 euros. The margin rate of this currency pair is 3.09%, so you will only need $3,472.60 in your account to purchase the full 100,000 euros. Your broker will let you borrow the rest.

The EUR/USD price moves up and is trading at 1.13010/1.13120 after 3 hours. You have enjoyed a move of 4.07 points and your profit is (100,000 euros *1.13010)-(100,000 euros*1.12603), or $407, when you sell.

Making Money with Forex in Ireland

Attribution: Pxfuel

You can make money in many ways in the forex market.

Shorting a currency: You can borrow a currency and sell it for a high price, buying it back later for a lower price. This is shorting and it takes advantage of downward moves in the market.
CFDs: Contract for differences (CFDs) are not currency pairs. They track currency pairs. Depending on the broker you choose, you will be using CFDs instead of buying and selling actual currencies. Practically, using CFDs is the same.
Binary options: You can trade currencies using a simple yes/no metric instead of tracking the direct movement of a currency pair.

Best Online Forex Brokers in Ireland

When you get ready to invest, you have a number of viable forex brokers in Ireland to choose from.

HYCM

Account Minimum

$100 USD (or equivalent)

Pairs Offered

FOREX.com

Account Minimum

100 of your selected base currency

Pairs Offered

80+

Account Minimum

100 of your selected base currency

Pairs Offered

80+

1 Minute Review

Best For

MetaTrader 4 users
Beginner forex traders
Active forex traders

Pros

Impressive, easy-to-navigate platform
Wide range of education and research tools
Access to over 80 currencies to buy and sell
Leverage available up to 50:1

Cons

Cannot buy and sell other securities (like stocks and bonds)
Confusing margin requirements that vary by currency
Limited customer support options
Cannot open an IRA or other retirement account

eToro

Account Minimum

$50 USD

Pairs Offered

Account Minimum

$50 USD

Pairs Offered

1 Minute Review

Best For

International Forex/CFD Traders
New cryptocurrency traders looking for an easy-to-use platform
Traders who want to buy and sell cryptocurrencies on-the-go

Pros

Simple platform that is easy to master
CopyTrader feature that allows new traders to copy the same strategies used by professionals
Virtual dummy account that gives you $100,000 to practice trades

Cons

U.S. traders currently limited to cryptocurrencies
Only 15 major coins available to trade

AvaTrade

Account Minimum

100 EURO

Pairs Offered

50+

Account Minimum

100 EURO

Pairs Offered

50+

1 Minute Review

Best For

Beginners
Advanced traders
Traders looking for a well-diversified portfolio

Pros

Controlled by regulatory agencies of multiple countries
Choice offered in terms of trading platforms
Support available in 14 languages and trading platforms in 20 languages
Practice/demo account available for trying out
Breadth of trading assets

Cons

Does not accept customers from the U.S. as it isn't regulated in the U.S.
Transferring funds to the account may take up to five days; withdrawals could take up to 10 days

Forex Terminology

Before investing, it's good to learn the lingo of the industry.

Pip: Also known as a basis point, this is the smallest unit that forex uses.
Lot size: The lot size is the amount you trade in a single order. A standard lot size is 100,000 units of a currency.
Orders: You give an order to the forex market just like you give an order to a waiter.
Calls: This is a contract that lets you buy or sell a certain amount of currency at or before a certain date.

Investing in the World

Forex may be easy to learn, but it is difficult to master. Investors spend their entire lives dealing with the nuances of currency, so give yourself time. Trade using a virtual account (a fully functional account with fake money) before using real money to invest.

Be sure to bookmark this page for updates on forex. Read as much as you can about forex at Benzinga and how to profit from it.