Trading Forex
on the Online Trading platform: pros, principles, strategies

FOREX is a shortening of 'foreign exchange'. The market can be understood as a giant international network that unites the largest world banks. Among the main market participants central and commercial banks, large investing companies, and international corporations can be pointed out.

Private persons can be market participants as well, but they are not able to access the market directly. Banks, brokers and other contractors provide such access for private persons. The total amount of currencies is more than 150 while some of them are adopted by more than one country (for instance, EUR, USD, etc.).

Referring to the Forex market, currencies are not traded on their own. They are offered in pairs that show the interdependence between two different currencies (for instance, EUR/USD, USD/SGD, etc.). Thus, using EUR/USD, people purchase US dollars selling Euros. Under the influence of different economic, political and financial events, the rates of currency pairs are constantly changing.

The market participants obtain their profits from currency pairs' volatility.

Users should understand that FX trading includes no direct purchasing or selling of currencies. A CFD contract is being made between two parties (a broker and a trader). According to the contract, the following conditions are indicated:

• A trader picks up 'lower' or 'higher' options depending on the technical analysis.
• If the price movement corresponds to the prediction, a trader obtains profit and can close a deal.

For instance, a user makes a CFD contract for EUR/USD. The rate is 1.8087. A trader selects the 'Buy' option predicting the rate increasing. When the rate is more than the initial one, profits are obtained. If not, the trader faces losses.

The market is characterized by certain common factors that make the analysis more understandable. Most of those factors are based on Charles Dow postulates:

• The price has been moving along the trend until the evident signal for the tendency change.
• The situation is constantly repeated.
• Each trend has three phases: accumulation, big move and excess.

According to those postulates, it is recommended to take the following market peculiarities into account:

1. A trend strength directly influences the possibility of the rate reverse movement. The strength depends on the interdependence between demand and supply.
2. A flat state frequently precedes the rapid price movement under the influence of significant news.
3. A flat state frequently precedes the rapid price movement under the influence of significant news.
4. The American and the European sessions are marked by the highest volatility while the Asian session is the least volatile. Time periods must be considered as well while making a deal.
5. The higher volatility is the higher spreads are offered by a broker.
6. The experts' predictions influence the market as well. Apart from the news itself, news anticipation has a particular value.

NOTE!
Those market laws can be taken into account while analyzing currency pairs and their rates movement but a trader should consider particular situations and conditions.

There exist numerous Forex trading strategies for different time periods, currency pairs and even trading styles. Among the most widespread ones the following strategies can be distinguished:

1. Scalping. This style is effective for short-time trading. A profit of several points is expected. A trader opens multiple deals to increase profit. The following strategies are suitable for scalping: MA method, news scalping and the Momo trading system.
2. Day Trading. This style is oriented for short-time trading as well (from several minutes to several hours). Impulse or Breakthrough strategies are mostly used for day trading.
3. Swing trading. This style implies positions holding for several days. Buy Low, Sell High; Trade the Range and Trading against the Trend strategies are used within this style.

NOTE!
The indicated strategies can be effective and bring profits but traders should understand that those ones don't work in all cases, otherwise the percentage of successful traders would be more than 8%. The experts recommend working out personal strategies based on technical analysis and your own experience.

To start using this investing instrument, the following steps are necessary:

1. Open an Online Trading account or sign in if you have already registered.
2. Set up the necessary settings in the trading platform's interface to make trading the most effective.
3. Press '+' in the upper menu to open a new asset.
4. Select the currency pair you prefer for trading (49 pairs are suggested in total).
5. Press the option you've decided to invest in (take into account that different multipliers are suggested for different assets).
6. Indicate the amount you want to invest (starting from $ 1).
7. Pick up 'Buy' or 'Sell' that correspond to price increasing and decreasing consequently.

You are able to close a deal any time you wish in the upper right-hand corner.

NOTE!
Funds depositing is necessary for real trading while users are also recommended to usea practice account without any limitations.

There exist more than 150 currencies that are united into thousands of trading pairs but the majority of those are not used by professional traders. The more popular pairs are, the easier their rate analyzing is expected to be.

The experts recommend concentrating on 1−2 trading pairs to get true profits. Some pairs' rates are almost mirrored. For instance, AUD/USD and NZD/USD move almost identically.

Moreover, the rates of different pairs may highly depend on particular news. For instance, any economic news concerning Great Britain influence pairs with GBP. Oil price influences pairs that contain CAD while the pair EUR/USD is extremely volatile under the influence of political news.

Thus, it is much easier to follow more specific information than to keep up with everything.

The market is controlled by financial institutions therefore it is accessible on working days. On weekends the market is closed all over the world. On the other hand, due to the time differences the market is actually closed for 1.5 days.

South Africa is understood as a promising region for the developing market because of two main factors: a high level of economic development and people's favorability to new investing instruments.

According to C Pattern, the average monthly deposit of a South African trader was $ 742 in 2019. That is significantly more than in other African countries.

Speaking about trading Forex in South Africa, there exist some pitfalls that need to be taken into account. Traders are free to deposit up to $ 230 000 choosing any brokers and that corresponds to the current South African legislation.

Referring to Forex trading South Africa, taxation should be taken into account as well. All citizens who get profits are obliged to pay from 18 to 41% depending on their annual incomes. On the other hand, net incomes only are the subject of taxation therefore funds used for the equipment purchasing, paying for different training courses, etc are tax-free.