In today’s economy, having a second stream of income is usually helpful. This is why many South Africans are trading Forex. For those considering entering the market, there are many questions swirling around in their mind. The most important one: can you make money trading Forex?
Are traders making money successfully?
To start off with, Forex is not a ‘get rich quick’ solution. This is the first mistake most first-time traders make when they enter the market. With this mindset, it’s likely that you’ll lose more money than earn.
Here’s how some traders are earning a consistent profit:
Understanding the market
The market is not there to be beaten, it’s there to enlighten you. Analysing the global markets will help you determine when to trade and when you’ll be successful. Becoming fluent in what external factors influence the market will help you get a grasp on trading Forex.
Developing a trading strategy
The first thing any professional trader will tell you is that you need to devise a strategy. Going in and just placing trades is reckless and a sure way to lose money. Before you begin, determine your trading goals and the best time of day to trade. Also, having a risk management plan is key to ensuring you’re not losing a lot of money. This means placing a stop-loss order.
The problem that new traders have is that they give into greed and want to make a profit immediately. While you can make a substantial profit, it doesn’t happen overnight. It all boils down to learning all about the Forex market to make sure that you’re prepared when you make your first trade.
People who have become rich trading Forex
There are people who have made quite a bit of profit (read millions) with Forex trading:
He’s in the top 30 of the global rich list and is known for making $1 billion in a single day! How did he do this? He sold over $10 billion worth of British Pounds. In a nutshell, he sold pounds while they were at a high price and then bought them back once the price value decreased. Before he ‘broke the bank of England’, Soros was a Hungarian immigrant whose first full-time job was an entry-level position at a merchant bank called Singer & Friedlander.
Martin Schwartz was a financial analyst at EF Hutton before he quit and bought a seat at the American Stock Exchange. He started trading options and futures and made $600 000 in his first year as an independent trader and earnings $1.2 million in two years.
Stanley Druckenmiller had George Soros as a mentor and has managed to develop a successful career trading. It’s reported that he is worth over $3 billion.
Is trading Forex easy?
It may look difficult, especially if you don’t have an understanding about Forex market or trading. The good news is that there are steps you can take that will help you get a grasp.
With the right training, the Forex market doesn’t have to be a challenge. Find mentors or experts in the field who can help guide you. The great thing about working alongside seasoned investors is that they can help you understand the market and you’ll get front row seats as to how to monitor your trading portfolio.
If you’re still uneasy about it, try with small deposits or use a practice account until you feel comfortable.
How to get started
Once you’re comfortable and learned everything about the Forex market, you can start trading.
The next steps are:
- To find a trading platform. Do your research and find one that’s reputable or speak to fellow traders for recommendations.
- Once you’ve found a suitable platform, you need to register and fund your account. Each platform will have a minimum trade fee.
- Now you need to decide on which currency pair you’d like to trade with. By now, you should have a trading strategy in place, which may help you decide on your preferred pairing.
- Also, remember to have your risk management strategy in place.
To conclude, you can make money by trading Forex. All you need is the right strategy, the mentors, the mindset – then you’re good to go!
Our free financial trader education seminars will give you access to trading professionals. Book your seat and have a chance to learn from the best!