There are many investment opportunities when you have millions of dollars, but what if you only have 500 USD? The answer is, you are pretty stuck — with the average interest being 10-15% annually at the absolute most, you will not be earning your living off this money any time soon. However, there are other, riskier ways to invest your money. Ones that require you to be a little bit more savvy and involved. One of them is the Forex market.
What is Forex?
Forex is an international exchange for
foreign currencies. It is decentralized and largely controlled by the national
banks and international private corporations. It is big, sprawling, and
incredibly volatile. Which makes it a perfect place to make money.
How profitable is Forex?
Since Forex is volatile, someone could take advantage of the price fluctuations — buy low, sell high, and pocket the profit. Or you sell high and buy back low to refill your coffers with more currency to trade. It takes skill and knowledge, but it is also extremely profitable. On a monthly timeframe, the best traders can get over 100% in profit, effectively doubling their income.
On the other hand, volatility means a potential for loss. So while Forex traders can make a lot of money, they can lose just as much. In fact, over 90% of investors lose their first investment — and unless they wise up to how everything works, they will keep losing. Other people learn how to trade — and we are going to teach you the basics of this art right now.
A crash course on how to trade Forex
Trading on the Forex market is not a
particularly straightforward process, so let’s break it into bite-sized pieces.
This way you can keep track of what you already know and not feel completely
submerged into the dangerous, misleading waters.
First of all, you are going to need a Forex
How to pick your Forex broker
Forex brokers are companies that give you access to the market and allow you to trade there. They are necessary, since Forex itself is not particularly welcoming to the small traders. Each completely independent entity on Forex needs to purchase a terminal and pay a fee upwards of 1 000 USD/month.
Brokers allow traders to bundle together and
spread those costs among them, making trading profitable once again. Brokers
also handle all the formalities, consolidate orders and overall improve the
traders’ experience. However, they are also in full control of your money — and
you need to know which brokers you can trust.
If you are only starting out, consider JustForex — they are a perfect option for beginners, with a very reliable support system and a very traditional terminal experience. They also offer great trading conditions, although they do have some issues with slippage. Overall, if you are only starting out — they are one of the best choices for South African traders.
Now that you have a broker, it’s time to learn how exactly you are going to trade.
How to pick a trading strategy
There are a lot of trading strategies that
are suitable for beginners but most of them are based around the Price Action
principles explained on the ForexFactory forums.
Therefore, the best way to really get to the
meat of Forex trading would be this core strategy, which exists specifically to
teach you about the patterns of the market and how to exploit them.
How to create a trading account
To start trading with JustForex:
- Go to JustForex.
- Pick the account type you want and click “Open Account.” We recommend using Standard accounts since the 100 USD deposits are perfect for beginners.
- Fill in the form on the website. Use only your real data; otherwise, you won’t be able to withdraw your profit.
- Click “Register”.
Once you are done, you can deposit money and
start trading — but in order to withdraw, you will need to verify your account.
You can do it in your client area.
Forex is a powerful investment option,
especially if you do not have enough money for proper asset investment and want
to make living out of it. It’s pretty risky, but if you can get into it — Forex
is more than worth it. And if you are not sure of your abilities, you can
always open a free demo account where you will trade with virtual currency.