In South Africa, online trading is going strong. This is only natural, given the pervasiveness of remote technologies. International brokers recognize the potential of the region and tailor their services accordingly. Here is an overview of the present-day opportunities.
Economic Downturn
Since March 2020, COVID-19 has been wreaking havoc on world economies. Every country has been affected, with 915,920 registered deaths as of this writing. It is still unclear whether the virus will ever disappear.
The economic ramifications are just as serious as the healthcare crisis. Millions of people have lost their jobs due to shrinking revenues. Economists and politicians expect the effects to linger for years. The South African Government did not hesitate to impose lockdown. Now, it is either you adapt or become jobless.
Experts agree that the effects of the lockdown are the worst part. The demand for South African export has also shrunk. Now, ‘positive’ scenarios of recovery include a 5-percent decline in GDP. This would have been seen as a disaster a year ago.
In such conditions, opportunities for remote work are vital. While companies are falling apart, the currency market is not going anywhere. It is a tap or a click away. Modern apps and platforms provide access to trading 24/7. Thanks to virtual private servers, brokers in South Africa can ensure smooth trading regardless of any disruptions.
Remote Technologies
Trading systems have desktop, mobile, and web-based versions. The best examples, such as MetaTrader 4 or MetaTrader 5, combine all three. This means you can access your system from any device, at any time. Web-based versions work in popular browsers, so no downloads are necessary. Global Forex brands provide fxtm MT4 for free.
Cross-platform functionality is a wonderful invention. Traders’ data is stored on their brokers’ cloud-based servers. It is shared between different versions instantly. Thus, you can open a trade from your laptop, edit it via a tablet, and close via a smartphone. Access is unhindered.
Potential for Profit
Forex is not rocket science, and you do not have to be a financier to begin. Still, it is not for the faint-hearted. You need a willingness to learn, perseverance, and mental toughness. The goal of a trader is to anticipate market trends. They buy or sell currency pairs depending on their likely movement.
Suppose you trade USD/ZAR. As of this writing, the rate is 16.7499. This means 1 US dollar costs roughly 16.75 Rand. Here is a very basic example of trading logic.
If you expect ZAR to depreciate, you can buy more US dollars and profit from the decline. If your prediction is the opposite (ZAR will rise against the dollar), you can sell USD for ZAR, and wait for the national currency to grow.
Predictions are made based on technical or fundamental analysis. The first approach looks at past price patterns. The second method relies on news supplied by the media. Currency traders keep track of events that affect their pair. For instance, in the case of USD/ZAR, you would zoom in on the state of the American and the South African economy. The South African rand is heavily dependent on the price of gold, as the country is an exporter of the commodity.
Volatility and Liquidity
The South African rand and other exotic currencies are the most volatile. This means they are most prone to dramatic changes. For a trader, high volatility can translate into higher profit, but it is also riskier. This is why beginners are advised to choose the most popular pairs like EUR/USD. These are the most predictable, as they are linked to the largest world economies. Still, there is room for a reasonable profit.
Pairs like EUR/USD or GBP/USD are classified as Major. Minor combinations, like CAD/CHF, also represent large economies. Usually, these do not include the USD. Both types offer decent volatility, but without excessive risks. They are also the most liquid, which means that buyers and sellers find it easy to connect.
Be Aware of the Risks
Forex is a risky undertaking. No investment scheme can be risk-free, especially if it allows high returns. Steer clear of brokers that guarantee to make you rich: Forex trading is not easy. Everything depends on your own skills, knowledge, and resilience.
The most successful traders follow strategies, but they are not infallible. They hedge their risks and never stop learning. It is impossible to have only profitable trades. It is important to learn from your mistakes and use them to improve your roadmap.
More Opportunities
Mastery of Forex opens a world of opportunities. Traders create diversified portfolios with stocks, derivatives, and precious metals. Today, trading is more accessible and attractive than ever!