You might have heard a lot about what is forex trading and how does it work in South Africa if you have a thing for business, money and trading.
And you might have been coming across people who boast about the Forex trading and argue that it is one of the biggest financial markets in the world. With global daily currency trading at record $6.6 trillion, this could be accurate.
Despite all these figures and facts, and people bragging about it, the forex market has more losses stories than rags to riches stories. However, irrespective of all the volatility and unpredictability connected with this currency market, forex is still going strong in South Africa and more citizens are diving into this unstable market to test their skills.
But what is forex trading and why is it so popular in 2019?
What is Forex Trading?
Forex, also known as Forex trading or foreign exchange, is the conversion of one currency into another. The world has different currencies. People travelling to other countries, or businesses operating from other countries, have to convert their currency into the another country’s currency. This is where forex trading is involved.
As mentioned, foreign exchange is trading of different currencies between seller and buyer. In the past, the forex market only consisted of central banks and big companies. However, today individual retailers are also venturing into the market with only $100 as a minimum initial amount to invest. But small fluctuation in the prices sometimes put traders in a risky position.
But despite this risky situation, why is it more and more in individual retailers are venturing into this market?
Its easy accessibility is one of the reasons why it is gaining a massive popularity. You can trade in the comfort of your home because it’s done online. You just need a smartphone, PC or laptop and strong internet connection to become part of this $6.6 trillion market.
24/7 Open Market:
The forex market does not have a particular running time just like the stock market has. This is an international market and has fifteen independent worldwide exchanges, open weekly from Monday to Friday, each with unique trading hours. So this mean that retailers in South Africa can work with people in Asia during normal business working hours. So you don’t have to quit your 9 to 5 job to focus on forex trading, you can it during your spare time.
Little Margin of Manipulation:
Another benefit of the FX market is its high levels of liquidity. This means that you can buy one currency from the market without encountering any severe change in its actual price. The money exchange market is the biggest market with a lot of people involved. Some work on it 24/7 and it makes it difficult for people to scam others and manipulate the market price. This is the reason the forex market is referred as liquid and convenient for beginners who are scared of scammers.
If you are also considering some ways to earn some extra money while keeping your 9 to 5 job, then forex trading might be good for you. You just have to be aware of its instability and volatility. Besides this, it is a good thing.
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Zita Zimande is a sports news journalist from the University of Johannesburg. Besides being a sports fanatic, she loves to cook during her spare time.