Forex Trading in South Africa

Investar

Member
Joined
Jan 28, 2015
Messages
23
Hey guys

So for a while now I have been interested in getting into Forex. I understand it's a completely volatile option and should only get into it if you know what you are doing.
I've tasked myself with a few months to learn as much as possible about the different options and to educate myself what it's all about before I make my first deposit.

I would like your advice on your experiences with Forex, have you tried it out, were you successful?
What kinda platforms should I look into?

This is a big learning curve for me, so would appreciate all the feedback possible.

Happy trading!
 

RR777

Active Member
Joined
Jun 1, 2014
Messages
91
Go to a casino. You have MUCH, MUCH, MUCH better odds there. Or throw your wallet into Harties - you will lose less that way.

Why don't you ask the "guys, guys" OP from the pudding thread. He also went the gambling way.
 
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gram

Active Member
Joined
Mar 31, 2010
Messages
74
Hi Investar

FX is not for the faint-hearted. You can make easy money, fast, and lose it just as quickly.

firstly, educate yourself
http://www.investopedia.com/university/forexmarket/
www.babypips.com/school/
are a few sites that will help

secondly, open a demo account with a broker, anyone does not matter, just get used to the feel of it...(but avoid the local brokers, you will get better value with a European based i.e better spreads, charges), you can always use a european based vps if you are worried about speed.

thirdly, divorce yourself from any emotion if you intend trading. It helps, you cant fall apart when you lose money, you will make rash decisions trying to earn it back, and then lose even more in the process.

and, finally only trade money you are willing to lose.

hope this helps....
 

Muki

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Joined
Feb 11, 2010
Messages
103
I used to trade forex a few years ago, it is EXTREMELY volatile but you can still make some good money off it. You need to be very disciplined though and be very selective of the broker you go through as some are fly by night companies and disappear when you want to withdraw funds. The most common platform was MetaTrader 4 a few years back, I think MetaTrader 5 is out by now.

Go through the training at Babypips.com first, then run a demo account. Trade it as if it is your own money and after you have doubled it, put in money. It is very risky, but overall I ended up making a nice profit over a year or so.
 

Bismuth

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Jun 22, 2007
Messages
3,418
Would recommend BabyPips, found that quite informative. Have also traded a demo account, but didn't do too well for the short period I had it. But did enjoy it.

The key elements I got of it was as follows:

  • Don't trade on emotion
    [*]Only trade with what you can afford to lose

Do that, and you will be fine... or throw your wallet into the Harties! :D

B
 

FrankieK

Senior Member
Joined
Jan 14, 2015
Messages
819
OP, try thinkorswim paper money. Fairly easy platform to get used to. They will let you have free access for, I think, two months and you can reset the platform when you lose all your paper money. Remember the emotion when you are down $10k in paper money, then multiply that feeling by 1000+ when you lose real money.

Forex is heavily leveraged. 50:1 and up. And like that wild girlfriend you had at 'varsity, when she's on she's astonishing and when she's not she's downright diabolical. Forex trading is NOT for amateurs. Repeat NOT. Refer to FXCM from earlier in Jan after the EURCHF debacle.

Best thing for retail investors is to stick to standard investing in stalwarts like AAPL, GILD, BRK.B etc.
 

The_Ogre

Honorary Master
Joined
Apr 30, 2010
Messages
23,460
From this thread

That's somewhat true, but nowadays the brokers are also market makers. Meaning if there's nobody to take the opposite position to yours, then the broker will take it.

What is however a problem with demo account is there's no slippage. When trading on a live account, the larger the lot size the bigger the slippage...and this will either cost or make you money :)

The biggest difference between a demo and a live account is...YOU!

A real account is much more psychologically taxing, much, much more. And the reason is simple: no longer are you trading with monopoly money, money you lose or gain result in real losses or gains.

How much are you willing to lose before you walk away?
How greedy are you;when do you take profit?
How do you react when you lose a great deal of money?

This is the reason why some write EA's/robots which we program with our algorithms and leave on a VPS in Europe somwhere to trade on its own - thereby taking the emotions out of trading.

Why don't you run it on a server in SA you ask. Two reasons:
1) blazingly fast lines with very low latency to the Forex data centres
2) no loadshedding :D

disclaimer: this is not in any way, shape or form intended to be financial advice!!!
Remember, while trading Forex, when things do not go your way, it doesn't go your way at all! So always manage your risk.
 

Investar

Member
Joined
Jan 28, 2015
Messages
23
Hi Investar

FX is not for the faint-hearted. You can make easy money, fast, and lose it just as quickly.

firstly, educate yourself
http://www.investopedia.com/university/forexmarket/
www.babypips.com/school/
are a few sites that will help

secondly, open a demo account with a broker, anyone does not matter, just get used to the feel of it...(but avoid the local brokers, you will get better value with a European based i.e better spreads, charges), you can always use a european based vps if you are worried about speed.

thirdly, divorce yourself from any emotion if you intend trading. It helps, you cant fall apart when you lose money, you will make rash decisions trying to earn it back, and then lose even more in the process.

and, finally only trade money you are willing to lose.

hope this helps....
Thanks for this, there are so many Fx trading sites out there that it is a bit overwhelming.
 

Investar

Member
Joined
Jan 28, 2015
Messages
23
OP, try thinkorswim paper money. Fairly easy platform to get used to. They will let you have free access for, I think, two months and you can reset the platform when you lose all your paper money. Remember the emotion when you are down $10k in paper money, then multiply that feeling by 1000+ when you lose real money.

Forex is heavily leveraged. 50:1 and up. And like that wild girlfriend you had at 'varsity, when she's on she's astonishing and when she's not she's downright diabolical. Forex trading is NOT for amateurs. Repeat NOT. Refer to FXCM from earlier in Jan after the EURCHF debacle.

Best thing for retail investors is to stick to standard investing in stalwarts like AAPL, GILD, BRK.B etc.
Thanks for the feedback!
I understand its the craziest market and I want to try educate myself a lot before stepping into it.

I have decided to only put a small deposit into the accounts and once thats gone then it's gone.
 

Investar

Member
Joined
Jan 28, 2015
Messages
23
Would recommend BabyPips, found that quite informative. Have also traded a demo account, but didn't do too well for the short period I had it. But did enjoy it.

The key elements I got of it was as follows:

  • Don't trade on emotion
    [*]Only trade with what you can afford to lose

Do that, and you will be fine... or throw your wallet into the Harties! :D

B
I think it's important to go into the whole thing with the mindset of having a set ammount you would like to spend.. Once you have used that up then you can't deposit anymore.
 

The_Ogre

Honorary Master
Joined
Apr 30, 2010
Messages
23,460
Some tips from my personal experience:

Open a demo account every Monday with US $5 000 and double it by the Friday. Do this for a good two/three months. Every time you fail to do this then start from scratch.

Choose a broker who puts your money in a segregated bank account. All Australian forex brokers have to comply with this by law. This way, the broker can't use your money for business activities. They can also not touch your money once the company folds.

Always know how much you're willing to lose and gain before opening a position; don't move your goalposts.

If you've made three or more consecutive bad trades in a day, don't trade again on that day.

You will lose money and there will be times when you feel the world is against you. Dust yourself and try again.
 

Investar

Member
Joined
Jan 28, 2015
Messages
23
Thanks to all your feedback so far.

Currently I have decided to open up a demo account with GT247 Future Trader, as when you want to open a live account the min amount is R500 - perfect for me.

Going to read the manual and see how the platform works.
Still a bit confused cause if I buy something, I can't see my current holdings..
 

Diplos

Senior Member
Joined
Aug 7, 2003
Messages
731
Keep a close eye on the economic news calendar - various sites have them, for example:

http://www.forexcrunch.com/live-forex-calendar/

Pay especially close attention to things like US Non farm payrolls, that comes out once a month and can cause massive volatility. Either make sure your positions are closed and sit it out, or take a position shortly before the announcement.
 

Investar

Member
Joined
Jan 28, 2015
Messages
23
Keep a close eye on the economic news calendar - various sites have them, for example:

http://www.forexcrunch.com/live-forex-calendar/

Pay especially close attention to things like US Non farm payrolls, that comes out once a month and can cause massive volatility. Either make sure your positions are closed and sit it out, or take a position shortly before the announcement.
Ok thanks for this!
Got so much to learn and ended up staying quite late last night watching different tutorials.
Diplos are you into Forex?
 

Thor

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Joined
Jun 5, 2014
Messages
40,415
Keep a close eye on the economic news calendar - various sites have them, for example:

http://www.forexcrunch.com/live-forex-calendar/

Pay especially close attention to things like US Non farm payrolls, that comes out once a month and can cause massive volatility. Either make sure your positions are closed and sit it out, or take a position shortly before the announcement.
Thank you for this.


Also guys have a look at Justonelap.com
 

FrankieK

Senior Member
Joined
Jan 14, 2015
Messages
819
Thanks for the feedback!
I understand its the craziest market and I want to try educate myself a lot before stepping into it.

I have decided to only put a small deposit into the accounts and once thats gone then it's gone.
If you want crazy take a look at the E-Mini S&P500 (ES_F) futures. Great fun to be had there at 50:1. One point move on a single contract equals $50.
 

Investar

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Joined
Jan 28, 2015
Messages
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If you want crazy take a look at the E-Mini S&P500 (ES_F) futures. Great fun to be had there at 50:1. One point move on a single contract equals $50.
Can you explain this whole "risk" thing to me, as I do not really understand..


How much does it cost per trade? And the more risk you put do you use more money?
 

FrankieK

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Joined
Jan 14, 2015
Messages
819
Investar,

For the sake of argument we will do all calculations in USD and leverage for ES_F is 50:1. The cost per trade is about $4 for a "round trip" i.e. $2 for the buy and $2 for the sell, but forget about that for now.

- You open an account with a broker and deposit $2500. Most brokers require a minimum of $2.5k for a margin account.
- The S&P500 opens at 2000. At the open you buy 1 contract ($2000). You now control $100 000 ($2k x 50) worth of equity.
- The S&P500 drops 20 points (1%) during the day to close at 1980.
- Your $2000 is now worth $1000 (20 points x 50 = 1000.) and your account balance is $1500.
- The next day you feel good about the market and at the open of 1980 you buy another contract using $480 ($1980 - $1500) worth of margin.
- The S&P500 drops 25 points on the back of some bad economic data and an FOMC statement.
- Your loss for the day is now $1250 (25 x $50) and your account balance is now $250.
- In two days you lost 90% of your account value even though the S&P500 only lost about 2.5%.
- You are screwed now because any further losses will trigger a margin call from your broker as you will now owe them money.

To sum up: In two days you went from $2500 to $250 because of leverage and your trading account is as good as dead.

I'm not entirely sure about the leverage when trading forex but the essence is the same. Caveat emptor!!!

From the CME website: http://www.cmegroup.com/trading/fx/...uth-african-rand_contract_specifications.html
 
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Investar

Member
Joined
Jan 28, 2015
Messages
23
Investar,

For the sake of argument we will do all calculations in USD and leverage for ES_F is 50:1. The cost per trade is about $4 for a "round trip" i.e. $2 for the buy and $2 for the sell, but forget about that for now.

- You open an account with a broker and deposit $2500. Most brokers require a minimum of $2.5k for a margin account.
- The S&P500 opens at 2000. At the open you buy 1 contract ($2000). You now control $100 000 ($2k x 50) worth of equity.
- The S&P500 drops 20 points (1%) during the day to close at 1980.
- Your $2000 is now worth $1000 (20 points x 50 = 1000.) and your account balance is $1500.
- The next day you feel good about the market and at the open of 1980 you buy another contract using $480 ($1980 - $1500) worth of margin.
- The S&P500 drops 25 points on the back of some bad economic data and an FOMC statement.
- Your loss for the day is now $1250 (25 x $50) and your account balance is now $250.
- In two days you lost 90% of your account value even though the S&P500 only lost about 2.5%.
- You are screwed now because any further losses will trigger a margin call from your broker as you will now owe them money.

To sum up: In two days you went from $2500 to $250 because of leverage and your trading account is as good as dead.

I'm not entirely sure about the leverage when trading forex but the essence is the same. Caveat emptor!!!

From the CME website: http://www.cmegroup.com/trading/fx/...uth-african-rand_contract_specifications.html
Alright thanks for this! Still a bit confusing but I just need to wrap my head around it.
 

Investar

Member
Joined
Jan 28, 2015
Messages
23
So with my GT247 28 demo account I have R100k.
After playing around for the first time having no clue what I was doing I lost about R698.

I have set goals for the duration of the demo account that I have to achieve before opening a live account.
Goals
- Profitable every trade
- 75 pip gain per week
- Spot the trends from previous performance

Being that today was my first 'official day' I made R130 profit with a 32 pip gain, consisting over 3 trades.
1.1347 going short and selling at 1.1332
1.1324 going long and selling 1.1337
1.1342 going short and selling 1.1337

Kinda stoked with myself.
Onwards and upwards!
 
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