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Forex is the largest exchange in the world with roughly 5-trillion USD worth of currency being sold and bought there each day. The market is incredibly popular, with thousands of traders large and small constantly speculating on multiple currency pairs.
But how did Forex become so popular and how exactly can normal people make money off it? To figure it out, we met up with Felix Dlamini. Felix is aJohannesburg-based Forex trader who’s been trading for living for over eight years.
Felix, how did you become a trader?
Look, I always knew that there’s no way I would work 9-to-5. Having money come by regularly is definitely not the worst that could happen, but the overall routine was killing me. I had done it for two years by that point and it really wasn’t a good period in my life.
So when a friend told me that he is trading on Forex and even makes some spare cash out of it, I just jumped at the opportunity. It was back in 2011 when I was 27. This is how I earn my living nowadays.
What do you need as a trader to start trading Forex?
If you have never done trading before, there are some pretty good guides out there. Just Google “How to trade on Forex” and read the first three articles — that should cover your basics.
Once you get the theory, just start trading. Make mistakes, learn from them, and gradually start understanding what you should be doing. You can keep reading up on strategies and guides while you do it, just don’t blindly follow them. Treat them as guidelines at best.
Also, don’t start with real money. Open a demo account and practise there, at least until you understand how everything works and how to operate your trading platform.
ENQUIRE NOW – Contact JustForexAre there different trading platforms? Which one would you recommend?
There are a lot of platforms these days, and some brokers even support several of them. But I recommend you stick with MetaTrader 4 or 5. They work well, are easier to use and have a large community that constantly improves them. There are some advisors and indicators that you can only use with MetaTrader. You can find MetaTrader 4 and 5, including Web and mobile versions of MT4, at JustForex website for free.
Do newcomers need a trading plan? How do you make one?
Of course they do. Once you are ready to become a forex trader, you need to define your trading rules and risk management principles. Experienced traders often have diaries, where they write down their rules for each session and reflect on how successful they were.
If you are only starting out, you can use trading systems found on popular website and trading forums. Most of those systems aren’t great but they’ll carry you until you find your own groove. Overall, each trader has their own style that fits them best. They are defined by the market regularities they exploit and patterns of trading that lead to stable results.
How much do you need to start trading?
Not counting demo accounts? I’d say 100 USD is a good start. I started lower and I did alright, but 100 USD is a sweet spot in terms of security and strategy availability. It’s enough money to learn the real market conditions.
Once you learn more, I recommend upping your deposit to 1 000 USD. Or even 5 000 USD, if you can afford it. This way you will be able to manage your risks much better and won’t be taken out of the market by a stroke of bad luck.
How risky is Forex trading?
I, as an experienced trader, believe that Forex trading carries the same risks as trading in any other financial market. Once again, I want to emphasise that in trading it is very important to adhere to your strategy and manage your risks. And you need to choose the right broker.
How did you choose a broker? Who do you trade with?
The competition among brokers is very high. There are a number of good companies I have been working with for a long time. Last year I began to actively trade with JustForex Broker, they provide a large selection of trading instruments with low spreads and are pretty reliable with order execution. Also, Justforex provides a wide range of payment systems including African ones, such as South Africa EFT Transfers and African Local Cards.
How much can you make as a Forex trader?
That really depends on your deposit. With smaller ones, you won’t make much. However, some of my colleagues managed to spin 100 USD into 800 -1 000 USD in a month or two.
When it comes to larger deposits, everything depends on your skill. I once got around 1000 USD per month for a couple of months, from a 2 000 USD deposit. It’s not a common occurrence, but at the time I really understood the market and constantly kept in touch.
It was very taxing and I don’t do it anymore. Now I’m all about the swing trading strategy and algorithmic trading, which let me spend only 1-2 hours per day doing actual work. I guess you could say I’m retired.
To cap it all off, I’d like to say that Forex trading is a good way to make money. If you stick to the rules and practice, you’ll have a good chance to become rich. Or, at least, not have to work 9-to-5 in a hot, sweaty office.
