Forex FAQs

What is Forex?

Forex and ‘FX’ are shortened terms used for ‘foreign exchange’. Foreign exchange or ‘currency trading’ is the exchange of money from different countries. The value of one country’s currency is constantly changing against the value of another country’s currency. Forex traders make money through buying and selling currencies on the foreign exchange market.

Is Forex risky?

Yes, we advise all our clients that foreign exchange trading does involve substantial amount of risk. Risk only what you can afford

What does one need in order to start trading?

To be able to trade you only need a device with an internet connection and a funded trading account. In addition, we strongly recommend you to be equipped with Forex/CFD’s or other financial education and trading tools to help you minimize the risks in the market.

How does the forex market differ from other markets?

Unlike stocks, futures or options, currency trading does not take place on a regulated exchange. It is not controlled by any central governing body, there are no clearing houses to guarantee the trades and there is no arbitration panel to adjudicate disputes. All members trade with each other based on credit agreements. Essentially, business in the largest, most liquid market in the world depends on nothing more than a metaphorical handshake.

How long does it take to understand Forex?

This is like asking someone how long it would take to learn to speak a foreign language. Some would learn in 6 months, others in a year, some will never complete the learning process. We have had a few traders leave their first class profitable, and never look back. Obviously, this is not the norm, but still very possible. Some traders learn the method in just a few weeks to a few months. New traders take 3 months to 6 months to really understand how market makers moves the price.

What are you really selling or buying in the currency market?

The short answer is “nothing”. The retail FX market is purely a speculative market. No physical exchange of currencies ever takes place. All trades exist simply as computer entries and are netted out depending on market price. For dollar-denominated accounts, all profits or losses are calculated in dollars and recorded as such on the trader’s account.

How much money is needed to open an account?

An account can be opened with no money. Typically you are given 30 days to deposit money into your account before the broker will close it. You can start trading with as little as $50 USD by using micros (10 cents/pip). There are even steps you can take to trade with as little as 1 cent/pip. Or, you can open an institutional account with tens to hundreds of thousands. Each broker varies with their requirements, so do your research on the web and by asking fellow traders.

Contact Information:

Tel: 031-301-0663

Physical Address:

Redefine Towers - 20th Floor

320 Dr Pixley Kaseme (West) Street

Durban CBD

Durban

4001

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