Methods of Analyzing Trades in Forex Trading

For those who are aspiring to start forex trading in South Africa, there is something very important that should be borne in mind - trading without planning is akin to gambling. Online trading is an activity that involves traders speculating about the market and its ongoing trends and utilizing the same to place informed investments. This requires traders to understand the charts thoroughly and discern the trends before placing a bet. This can be accomplished by analyzing the charts and learning about the price action. 

Types of Forex Analysis

There are two ways in which traders can analyze the market and make their position. The two types have their relevance on different time frames and are influenced by different factors.

Fundamental Analysis: Fundamental analysis is the process in which traders use fundamentally market altering factors such as events and news to read the behavior of the forex trading market and discern its future trend. Traders in South Africa that engage in fundamental analysis usually use news such as financial updates, government policy decisions, GDP figures, etc. to predict where the market could be headed. Looking out for cues that influence the market and using the same to discern the direction currencies would take can help traders place open positions that may react positively to the news and thereby bring profits to the traders.

Technical Analysis: Technical Analysis, as the name points out clearly, refers to the type of analysis in which traders use technical factors that influence the flow currencies in a market. These are factors that usually reveal insights on trader psychology and currency logistics in a market. They are highly relevant in short-term online trading as they usually follow trends that get replicated in every market cycle. 

Both these analyses have their significance in forex trading as they suit different trading styles. While Technical Analysis is suitable for traders looking to engage in short-term trades such as Scalping, Fundamental Analysis is used for long-term trading where market factors dictate the flow of the currencies. For novices who are looking to take up forex trading in South Africa, partnering with reputed brokers like WesternFX can help them master both these types of analysis and use them to good effect in trading.

What is the Minimum Money Required to Start Forex Trading?

For aspirants that are looking to enter the online trading scene in South Africa, this has always been an important question. The amount with which one should get started in forex trading is a question that has never been answered satisfactorily. A reason for this could be the fact that there is no right answer.

The forex trading industry is one which is quite open and welcoming to its traders. Unlike the stock exchange, online trading in currencies does not require a huge investment. If traders spend some efforts on locating the best forex brokers, they can usually get accounts for as low as $25 as the minimum deposit. With this being the case, most professionals can reach out to brokers like WesternFX to set up an account.

Is it wise to set up an account based on the lowest investment?

No. Setting up an account should be based on the purpose it has to serve. The amount of investment one should invest in the trading account should factor several criteria.

• Style of Trading: Traders engage in different styles of trading. While some of them may engage in short term trade activity such as scalping and swing trading, others may engage in forex trading that is long term.
• Purpose behind trading: Some traders may be in the trading business to learn how it operates before they move forward and use it as a means to diversify their portfolio. Others may be pursuing it as a career. In the first case, it is advisable to open an account with a small investment and test the waters. In the second scenario, it is wise for the trader to open an account with enough liquidity that he or she can experiment and at the same time make some profits on the go. This will also ensure that even if they face a few initial losses they can still have capital left in their account.
• Profit Targets: This is yet another deciding factor on the initial investment. For traders looking to make good profits out of their forex trading platforms, they need to invest in positions that are large enough to reap decent profits. While leveraging allows them to open large positions, having a large account can help them devise trading strategies that will produce maximum profits with minimum movements in the market.

For forex traders in South Africa, the best way to solve such tricky problems is to get the support of acclaimed brokers who can guide traders to make the right decisions. WesternFX is among the best forex brokers and has helped thousands of traders succeed on the market. Partnering with them can help understand the market better.

How to Build an Effective Forex Trading Strategy?

You can read scores of online resources or pore over countless books, but it still doesn’t guarantee you success as a Forex trader. So what does establish you as a viable player in the market? Practice and planning! Yes, nothing can come close to gaining hands-on experience and applying the learned knowledge in real life. A prescribed plan of action is also vital to drive your trading approach in the right direction and make you great fortunes. Do not equate Forex trading in South Africa to gambling. Instead, adopt a practical approach, create a plan, execute it, and gain experience to better your trading performance.

Let’s take a look at six tips that will help you craft the best Forex trading plan:

#1 Start with demo trading

Avoid pooling in real currency to test out the field. Instead, open a free Forex trading account, trade with virtual currency, understand the process, get familiar with the platform and assess your skill. Once you’re confident, only then should you venture into live trading.

#2: Emotional Strength

The Forex market with its high volatility and uncertain market conditions can plunge you into periods of emotional turmoil that could jeopardize your trading career. Keep up your emotional strength at all times and devise a plan that suits your personality and lifestyle.

#3) Set targets

You need to be prepared for losses, thus making it necessary that you prescribe an amount of loss that could be borne by you. Likewise, you also need to factor in the profit you’d like to make. Be realistic and come up with trading strategies that could chase down your profit goals.

#4) Stay tuned always

The Forex trading market is accustomed to swaying as per economic, political or other events. You can’t cut yourself off from it all if you expect to succeed as a trader. Read news feeds, magazines, journals and make sure you’re well-informed. This allows you to analyze the market before entering a trade.

#5) Refine your trading system

The trading platform you choose must support your needs. MetaTrader is considered the best by many. Once you’ve opted for the right system, you need to fine-tune it. Set support and resistance levels and use visual and auditory signals to alert you on entry/exit points.

#6) Maintain a journal

One of the biggest mistakes you could make is by believing that you’ve formulated the best Forex trading strategies – because you haven’t. There’s always room for improvement. Keep a journal, record all your trading activities, and know where and why you went wrong. This could help you alter your approach accordingly.

You can always do better by allying with reputed Forex brokers in South Africa. WesternFX is leading brokerage that can equip you with a free Forex demo account, loads of educational materials, and professional guidance to help you form a better trading plan.

Key Features that a Trading Platform Must Have

One of the principal decisions that a newcomer to Forex trading would need to make is which broker to ally with. It is critical that a beginner carries out research in this process, attempting to identify a brokerage that would have all the necessary aids and facilities that he or she would require. 

Among the many features that an online broker provides, possibly the most important one that you need to keep in sight is the trading platform. The trading platform needs to have high performance, along with all the vital requirements needed to trade. The platform needs to also remain reliable and stable, without chances of crashing or freezing in the middle of the trading process. 

In this article, we’re going to be looking at some of the key features that a trading platform needs to have for optimal performance:

1) Security for deposited funds

The first thing that a platform in currency trading should offer is a security for your deposited funds, regardless of what the amount is. 

2) Streaming function

Another vital feature is the capacity to stream data in a real-time manner for the trader to see. Although this facility would be handier with stocks and commodities trading than with Forex trading in South Africa, it could still be an efficient aid. The display of this needs to be convenience-oriented, allowing the trader to identify key data points easily. 

3) Simplicity and order-making capacity

The entire trading environment is better off with a simple and to-the-point arrangement, ensuring that clients do not end up making errors. The buying and selling orders, along with the ability to exit and enter transactions, need to be presented in a more organized and efficient manner. Along with all of these, a reliable trading platform should also allow clients to implement and edit stop losses.

4) Charting aids

A vital feature that most platforms would include is charting software. Charts are central for providing the information and analytics on which traders build their decisions. The better this facility on the platform, the more informed and calculated the trader’s transactions would be. An important factor for charting instruments would be the facility to project both short and long term trading periods. 

Of trading software, the first type is built by third-party entities and is adopted by brokers across the field. A prominent example of this would be MetaTrader 4. The second type would be platforms individually designed and tailored by the brokerage for its clients. Depending on the type of aids and facilities that one would like, both types of platforms come with their own unique advantages. 

If you want to ally with a broker with a stable, high-performance platform and plenty of instruments and aids, then choose WesternFX. We are among the leading Forex brokers in the region, with clients in South Africa and multiple other countries. Get in touch with us now!