Forex offers vast opportunities to African day traders
By Maddison Lambert
Forex or Foreign Exchange is a decentralised market where all of the currencies in the world are traded. It is the largest, most liquid market in the entire world that trades over US$5 trillion every day. Not even the biggest stock markets can compare to the amount of money being traded by investors on the Forex market.
The idea behind it is simple: you buy a currency when it’s low and you sell when it’s high. Forex traders make calculated risks by relying on fundamental and technical analysis to see whether or not the exchange rate will go up or down. There is no way of predicting how the currencies will perform in the short or long term.
If you’ve ever exchanged your money with a currency exchange shop when you’ve travelled abroad, then you’ve participated in a Forex exchange.
In Africa, online ads about Forex seminars are becoming harder to ignore given the fact that real people on social media channels are showing first-hand what it’s like to be a Forex trader. A quick search using the hashtags #lifeofatrader and #forexsignals will show you the lavish lifestyles that Forex was able to afford a number of self-made African traders.
Online, brokers also seem to be taking notice of the surge in Forex traders on the continent. A prime example of this is FXCM that recently allowed Namibian traders access to its markets, recognising that it’s a thriving market, which is only set to get bigger in the coming years. This is especially true in other African countries such as South Africa which is the reason why the country actively offers courses for newbie traders through UNISA .
So what’s the big deal?
The most attractive promise of Forex trading is the quick returns on investments. Forex boasts huge returns when done right, and you can make a living out of it if you undertake the right training. What’s great is that you can become a millionaire at a young age when you trade with Forex. Just last year, Sandile Shezi became South Africa’s youngest self-made millionaire at the age of 23. Simz D’ Mandla followed in his footsteps, becoming a millionaire by the age of 20 just by trading Forex.
In addition to huge returns on investment, the idea that you won’t ever have to work at a 9 – 5 job is quite attractive not only on the continent but across the rest of the world. After all, having the power to control your time and career is extremely appealing to the majority of professionals.
The biggest misconception about Forex is that everyone will become rich once they start trading currencies. Just like any other venture, Forex trading needs to be carefully assessed or traders run the risk of losing a lot of capital.
Successful traders are able to keep their emotions in-check and don’t let these rule their decision-making. If they allow emotions into trades, the chances are they will make erratic decisions that will not benefit them in the long run. Only through experience are traders able to understand how best to approach trading scenarios. And it’s ultimately not as easy as many would think, especially as it needs to be done ‘emotionless’.
“What they don’t tell you is that all beginner traders have a 95% chance of failing,” says Real Trader’s Chrizette Rossouw. Her capital was completely gone when she started trading and it took her years before she could make any real money from Forex.
Forex can become the next big thing in Africa if more people received the right training. With only a small startup capital and enough experience, African traders can profit substantially from this endeavor. They only have to look at the social media savvy traders who are currently embracing the #lifeofatrader and #forexsignals hashtags to see that it is possible to become a full-time trader in Africa.
About the author Maddison Lambert
After being a day trader for over 20 years, Maddison is now enjoying semi-retirement. When not playing golf, he still likes to keep abreast with all the market goings-on, hence he often writes about current trading news online across multiple channels.