Forex Trading in Tanzania • Forex Strategies • Benzinga
Foreign exchange (forex) trading is one way to make money in Tanzania. You may be able to earn significant returns without burning a hole in your pocket by trading Tanzanian shillings now. A vast majority of the people in Tanzania earn their livelihoods from the agriculture industry. The Tanzanian shilling (TZS) is their official currency…
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Foreign exchange (forex) trading is one way to make money in Tanzania. You may be able to earn significant returns without burning a hole in your pocket by trading Tanzanian shillings now.
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Get Started with Forex in Tanzania
A vast majority of the people in Tanzania earn their livelihoods from the agriculture industry. The Tanzanian shilling (TZS) is their official currency and it is further subdivided into 100 senti.
The Bank of Tanzania was established in 1966 and serves as Tanzania’s central bank. Its primary function is to implement monetary policies and uplift the national economy. The Bank of Tanzania manages the foreign exchange reserve that ensures sufficient capital is preserved, liquidity needs are met and income is enhanced for the people.
Under the Bank of Tanzania Act, 2006, the central bank has the sole right to issue banknotes and coins in the country. The Tanzanian shilling has denominations of 500, 1,000, 2,000, 5,000 and 10,000. Most of these banknotes depict animals and architecture found in Tanzania.
Due to the slow rate of GDP growth in the country, Tanzania relies extensively on financial support from the International Monetary Fund (IMF) to run its operations. It has a national debt of $7.9 billion.
Here’s a step-by-step guide to help you get started with forex trading in Tanzania.
Step 1: Get a digital device with fast internet connectivity.
You can use your desktop, laptop, tablet or smartphone to trade forex. The value of the currency pairs listed on forex brokers frequently fluctuate. Having a personal device to constantly track these changes is essential to successful forex trading.
Step 2: Find an online forex broker.
There are several forex brokers available online. Go through their websites and choose a broker that lets you trade currency pairs with TZS.
Be sure to check the footer of these websites for information on its regulatory bodies. If you can’t find any such information from the Securities Exchange Commission (SEC) the Financial Industry Regulatory Authority (FINRA) or other regulatory bodies, the broker can’t be trusted.
Step 3: Sign up for an account.
You can open a new account with the forex broker on its website. Some forex brokers require a minimum amount of deposit to open an account. These brokers also offer different types of accounts that vary in initial deposit requirements and spread sizes. Choose the one that’s right for you.
Step 4: Transfer funds to your account.
Once you’ve signed up for an account, you need to transfer funds to start trading forex. Depending on the broker you’ve chosen, you can choose your currency and fund your account using several options. Generally, these funding options include wire transfers, debit cards and electronic payment systems such as Paypal and Skrill.
Step 5: Download a forex trading platform.
You need to download the forex trading platform on your computer or smartphone. Take the time to customize the look and feel of the platform to help you get accustomed to forex trading.
Step 6: Begin your forex trading journey.
Before you start trading forex, you might want to open a demo account and trade using virtual money. These demos can help you get used to the interface of the forex broker without conceding unnecessary losses. After you feel confident using the platform, you can start trading forex using real money.
Tanzania Forex Trading Strategies
Forex traders from all over the world rely on a few simple strategies to maximize their profits and minimize losses. You can consider these forex trading strategies to earn better results from your investments.
News Trading
Global economic news and events can have a strong impact on forex markets. Many traders stay on top of influential financial information to anticipate short-term price movements of forex currency pairs.
You can research inflation rates, trade policies and multinational deals made between countries. You also run the risk of missing the window of opportunity if you’re not fast enough with your trade executions.
Day Trading
Day trading involves closely monitoring intraday price movements of forex currency pairs within a single trading session. These trades can take place anytime during the day and all positions are exited on the same day. Traders have adopted this method to reduce losses from overnight market volatility. Day trading can be very beneficial to short-term traders with limited time.
Scalping
Scalping is a strategy that involves making several trades throughout the day with low profit margins. The profits earned from minor price movements can add up to a sizable income.
Rapid price movements during intraday trading sessions can cause slippage on your trade executions. These tiny losses can quickly negate your earnings and eat away at your profits. This method of trading requires a lot of time and focus to track price movements. Scalping may not be favorable for traders with a full-time job.
Momentum Trading
Momentum trading or swing trading are trades that are executed when a forex pair starts to gain momentum in the market. Traders prefer to buy and sell currency pairs during market swings that can occur during the day, week or month. These traders rely on the volatility of the market to make a buck.
This method of trading can be less stressful than day trading or scalping. You can adjust your entry and exit points throughout the week to cut unnecessary losses.
Forex Trading Example in Tanzania
Let’s say the USD/TZS currency pair is currently trading at 2,310. According to that price, it will cost you 2,315 shillings to buy a U.S. dollar. You can choose to buy $100,000 at the rate of 23,10,00,000 shillings. After 2 months, consider the price of USD/TZS has risen from 2,310 to 2,315. You can then sell your $100,000 and earn a profit of 500,000 shillings in just 60 days.
Last year, the Bank of Tanzania tightened its control on forex by issuing new regulations. These new rules were set in response to the government revoking the licenses of 100 bureaus and the forced shut down of a newspaper for using unofficial data on exchange rates.
Because of the reduced number of forex bureaus in Tanzania, investors have turned to commercial banks for trading shillings. Around $10 million was traded in 2019 and that number is expected to grow in 2020. The increased transparency and improved currency inflows have been a driving force behind Tanzanian investors embracing commercial banks for trade.
Best Online Forex Brokers in Tanzania
Online brokers let you trade forex currency pairs with convenience. Online brokers let you trade forex currency pairs with convenience. Forex brokers are equipped with advanced tools and educational resources to help you learn how to trade.
Take a look at these top forex brokers to begin your forex trading journey.
Account Minimum
100 EURO
Pairs Offered
50+
Account Minimum
100 EURO
Pairs Offered
50+
1 Minute Review
A fully regulated broker with a presence in Europe, South Africa, the Middle East, British Virgin Islands, Australia and Japan, Avatrade deals with mainly forex and CFDs on stocks, commodities, indexes, forex, cryptocurrencies, etc. This brokerage is headquartered in Dublin, Ireland and began offering its services in 2006. It offers multiple trading platforms and earns mainly through spreads.
Best For
Beginners
Advanced traders
Traders looking for a well-diversified portfolio
Pros
Controlled by regulatory agencies of multiple countries
Choice offered in terms of trading platforms
Support available in 14 languages and trading platforms in 20 languages
Practice/demo account available for trying out
Breadth of trading assets
Cons
Does not accept customers from the U.S. as it isn’t regulated in the U.S.
Transferring funds to the account may take up to five days; withdrawals could take up to 10 days
Account Minimum
100 of your selected base currency
Pairs Offered
80+
Account Minimum
100 of your selected base currency
Pairs Offered
80+
1 Minute Review
FOREX.com is a one-stop-shop for forex traders. With a massive range of tradable currencies, low account minimums and an impressive trading platform, FOREX.com is an excellent choice for brokers searching for a home base for their currency trading. New traders and seasoned veterans alike will love FOREX.com’s extensive education and research center that provides free, informative forex trading courses at multiple skill levels. While FOREX.com is impressive, remember that it isn’t a standard broker. You can’t invest in the stock or bond market through your FOREX.com and you cannot open an account with tax advantages. The confusing pricing and margin structures may also be overwhelming for new forex traders.
Best For
MetaTrader 4 users
Beginner forex traders
Active forex traders
Pros
Impressive, easy-to-navigate platform
Wide range of education and research tools
Access to over 80 currencies to buy and sell
Leverage available up to 50:1
Cons
Cannot buy and sell other securities (like stocks and bonds)
Confusing margin requirements that vary by currency
Limited customer support options
Cannot open an IRA or other retirement account
Account Minimum
$50 USD
Pairs Offered
47
Account Minimum
$50 USD
Pairs Offered
47
1 Minute Review
Though Australian and British traders might know eToro for its easy stock and mobile trading, the broker is now expanding into the United States with cryptocurrency trading. U.S. traders can begin buying and selling both major cryptocurrencies (like Bitcoin and Ethereum) as well as smaller names (like Tron Coin and Stellar Lumens).
eToro offers traders the opportunity to invest their assets into premade portfolios or cryptocurrencies, similar to services offered by robo-advisors through traditional brokers. Though eToro isn’t a one-stop-shop for everything an investor needs, its easy-to-use platform and low spreads is a great way to enter the cryptocurrency market.
Best For
International Forex/CFD Traders
New cryptocurrency traders looking for an easy-to-use platform
Traders who want to buy and sell cryptocurrencies on-the-go
Pros
Simple platform that is easy to master
CopyTrader feature that allows new traders to copy the same strategies used by professionals
Virtual dummy account that gives you $100,000 to practice trades
Cons
U.S. traders currently limited to cryptocurrencies
Only 15 major coins available to trade
Forex Terminology
You should be familiar with a few basic forex terms before you start trading. Forex traders use these terms regularly during intraday trading sessions:
Pip: The smallest unit of price movement is measured in pips. Generally, forex currency pairs are listed up to the 4th decimal point.
Lot size: The lot size is the standard unit of your trading order. 100,000 units is the standard lot size. You can buy and sell currency pairs in smaller lot sizes as well.
Orders: An order is a command you execute through the online forex broker to carry out your trade. When you want to buy forex currency pairs, you execute a buy order. When you want to sell forex currency pairs, you execute a sell order.
Call: A call is a request received from your broker. It’s an indication that 1 or more of your open trades needs additional funding to maintain its position.
Start a Trend by Trading Forex in Tanzania
Affordable smartphones and widely accessible internet have made forex trading a possibility for Tanzanians. Forex trading has provided a robust market to make money but it also comes with a lot of risks. Take your time to analyze the forex market before you start trading forex.
These new pairs have been available since July 1st, 2019 and provide an excellent opportunity to diversify your clients’ portfolios and increase their exposure to this vibrant 24/7 market.
Asset
Typical Spread
Leverage
Margin
Min Nominal Trade Size
NEOUSD
1.5% Over-market
2:01
50%
10
EOSUSD
2% Over-market
2:01
50%
10
MIOTAUSD
1.5% Over-market
2:01
50%
10
To unify their cryptocurrency instrument labels, They are relabeling their existing Ethereum, Ripple & Litecoin instruments, by replacing the existing instruments with new USD labelled ones:
Asset
Old Symbol
New Symbol
RIPPLE
XRP
XRPUSD
ETHEREUM
ETH
ETHUSD
LITECOIN
LTC_Mini
LTCUSD
These new pairs have also been available since July 1st,
The trading conditions for each one is identical to those of the older respective assets they replace.
Effective immediately, new positions are only available on the new pairs.
Avatrade Clients will not be able to open new positions on the old assets, but those already open will remain unaffected until July 29th.
Existing positions on XRP, ETH and Litecoin-mini that remain open on July 29th will be automatically replaced with corresponding positions on the new pairs, , at the same opening price and at no cost to clients.
as any broker that values their clients would do , Avatrade makes sure that the clients will not be affected by the change.
Neteller one of the most known Digital fiat currency wallet provider , has started allowing its users to buy, sell, and hold cryptocurrencies including BTC, BCH, ETH, ETC, and LTC.
They do this on the large scale with a pilot in 10 countries and soon another 50 countries to join . They understand that if you do this effort it will only succeed if you can do this on a global scale.
founded in 1999, Paysafe Financial Services entered the market with the mission to provide an online alternative to the known traditional payment methods.
Most of the traders aiming us now neteller as one of the companies through which we made our deposits and if we had any profits also our withdrawals. A couple of years ago they left the Forex and Binary industry behind since the charge-back issue became just too expensive.
But as any companies knows, if you do not adept you die. The binary option market is all but dead and the Forex industry has moved also into the directions of the cryptocurrencies. thus, neteller understands that this is where the future is.
So Lasts week they announced that they are now offering a wallet with buy and sell cryptocurrency options.
As of today, Neteller users can buy, hold and sell cryptocurrencies via a recognized cryptocurrency exchange including bitcoin, bitcoin cash, ethereum, ethereum classic and litecoin, purchased using any one of 28 fiat currencies available in the Neteller wallet.
It may not seem so exciting but for many users that love this service it actually is. More and more currencies will be added making them an true exchange in the near future.
Now one is able to fund their neteller account through many different means (Mobile, Epay, Paysafecard, local bank deposits, and bitcoin)
We think that will make the threshold for many people, who would want to buy or sell cryptocurrencies, lower. This in return is a good thing for the overall acceptance of the cryptocurrencies in the mainstream of every day life.
The rates offered are somewhat in the lower middle of the current market making them go for the save route. The average market rates on the major cryptocurrency exchanges differ all in all not that much anyways, as this is not the main reason to choose to buy Bitcoin through Neteller
The minimum cryptocurrency purchase or sale amount is “approximately equal to 10 EUR,” the firm clarified, adding that the maximum amount depends on the transaction limits associated with each account.
When You open an account with Neteller you have to choose your default currency. This is of course for most people in accordance on their geographical locations, people in Britain will go for the pound most Europeans go for the euro and pretty much the rest of the work goes for the US Dollar, thou other currencies are available
The fee is 1.5 percent for purchasing and selling cryptocurrencies from wallets with EUR or USD as the default currency.
The fee rises to 3 percent for wallets with other default currencies.
Neteller | Why is this a good move for neteller and one that we should expect from other online Payment providers as well ?
At this moment till last week Neteller users can pay, get paid on thousands of sites, and send money around the world through their system.
The company claims to have “millions of point-of-sale, ATM and online locations” for users to withdraw or spend their cash.
Last July 25, Paysafe ( which as you remember is the company that owns Neteller and Skrill) announced that another digital wallet provider in its group, Skrill ( formerly known as moneybookers), started allowing customers to “instantly buy and sell cryptocurrencies, including bitcoin, bitcoin cash, ether and litecoin, using any one of the 40+ fiat currencies available in the Skrill wallet.”
We could now see that this was like their test run on this concept.
We do not know the numbers that Skrill produced since they offered this service but it must have been encouraging enough for Paysafe to include their flagship brand in this endevour.
We will see where this leads but we are hopeful that this is the next step in global acceptance to the cryptocurrency revolution. Let me know what you think
The currency trading industry and now also the cryptocurrency trading industry have gone through enormous volatile times the last couple of years. Now with trump and its trade wars. The fast rise and somewhat recline of the cryptocurrencies and the fast pace of international politics and economies that create high rises and steep fall of the currencies.
So what does it all mean and what can you do before start to trade on these news headlines.
Good brokers like LegacyFX and UBCFX provide the traders with the latest market news and updates on a continuous basis but if you are new to trading you still have no idea what to do with this.
You start by understanding that the involves a high degree of risk, including the risk of losing you hard earned money. Besides the ones that were lucky enough to have bought Bitcoin a couple of years back and cashed in in the end of 2017, most people don’t get rich overnight.
You have to understand that you only trade with money that you are able to lose, going hungry because you want to open a trade is not the right wy to go about it.
So, What is Forex?
You should by now understand that the value of currencies goes up and down every day.
This in general becomes apparent the moment you go on vacation and what you bought last year with your money now is not the same amount you get today at the exchange.
This is on a large scale, what a lot of people do not know is that there is a foreign exchange market – or ‘Forex’ for short – or “FX” for even shorter, where you can potentially make a profit from the movement of these currencies.
The most known Trader is George Soros who made a billion dollars in a day by trading currencies. This is of course on a scale that we are not able to reach and you need a huge amount of money to begin with. Still he made a billion in one day!!
The internet has played a huge part in making trading in currencies accessible for the masses. You also do not need huge amounts of money to actually do this. Now keep in mind that if you make 10% profit on your investment but the investment was just $50 you basically just end up with $55. still no bank will give you 10% interest on your money.
Many people and I am talking millions are now trading every day, most do this on the side and don’t do this as a full-time job, but there are today enough people that are full time traders and making enough money to live comfortably.
Retail forex market needed Brokers
The Forex market for the retail market was born, it started around 15 years ago to become more serious as technologies advanced and the stream of information became almost instant, this is important for trading as one second can make the difference between profit or loss.
So, the moment the technology was there the people that wanted to trade were there all that was needed were the Forex brokers that offered the platform for trading.
There are latterly hundreds of companies of not thousands that offer this service and there are good ones like LegacyFX and there are scams (these tend to not last long)
Forex explained in short
The Forex market is the largest financial market on the planet and has been for many years now.
Its average daily trading volume is more than $4 trillion. (just let that number sink in for a second). Of this total amount around 5% is the retail market meaning traders like you and me. Still 5% of 4 Trillion is still a number with a lot of zeros behind it.
If you compare that with the New York Stock Exchange, which only has an average daily trading volume of $55 billion. You truly see the size.
To give you another example:
if you were to put ALL of the world’s equity and futures markets together, their combined trading volume would still only equal a 25% of the daily Forex market. Insane right?
Why does this even matter?
It matters because there are so many buyers and sellers that transaction prices are kept low. To explain how trading the Forex market is different than trading stocks, here are a few major benefits.
Most Brokers don’t charge commissions – you pay only the bid/ask spreads.
There’s 24hour trading – you decide when to trade and how to trade.
You can focus on your currencies and become experts in only those pairs that you follow instead of following and selecting out of 5000 stocks
You can trade on leverage, (something to be very aware of as it can magnify potential gains but also your losses).
Forex is accessible for almost everyone– you don’t need a lot of money to get started
In the Forex market you can trade on Demo accounts to learn before you commit your money
How is Forex traded?
The mechanics of a trade are virtually identical to those in other markets. The only difference is that you’re buying one currency and selling another at the same time.
This is also the reason as to why the currencies are quoted in pairs, like EUR/USD or USD/GBP.
The exchange rate represents the purchase price between the two currencies.
Example:
The EUR/GBP rate represents the number of GBP one EUR can buy (relevant now with all the Brexit issues going on) . If you think the Euro will increase in value against the British Pound, you buy Euros with British Pounds. If the exchange rate rises, you sell the Euros back, and you cash in your profit.
Now the same works for strading Bitcoin, ethereum, Litecoin or other cryptocurrencies. this has become an entire new market and has introduced many people to Forex . you should here be also aware that trading cryptocurrencies is like regular trading so you will be able to lose great sums of money.
the Best thing i found about trading cryptocurrencies is that the Leverage by default tends to be very low which makes the risk of losing it all much smaller.
Sounds simply enough?
Why does not everyone Trade.
The same could be asked as to why not everyone plays poker, you can make money. The comparison between the 2 is actually closer than you might think.
All traders that are successful will tell you that 80% of successful trading is psychology and the other 20% is research. It takes time to get the research down, but it can take a lifetime to master the psychology.
People tend to do things differently when real money is on the line and are accepting losses in the hope that the trend will reverse or taking out profit too early because they don’t want to lose what they just have gained. In short, the psychology is the hard part.
One should be aware that you can loose real money and a lot of it very fast if you don’t know what you are doing.
Now most Good Forex brokers offer some educational tools, some more than others that will teach you how to trade. There is also something that is called social trading that will allow you to follow other traders and see what they are doing in order for you to learn and make money at the same time.
So here are some ground rules for those that look to start trading
Get involved in the market, watch read and listen to the news to understand what is happening
Go through a trading course ( a good one is here)
Open a demo account and trade at least a month (my advice to do this even longer)only on this before you even think about trading with real money.
Check out social trading, there are some options for this, this broker offers this also.
Try with an amount that you are able to afford losing. See this as your tuition money.
Take it slow, don’t become greedy and follow the basic rules
Basic Rules (there are many more but start with these)
The trend is your friend
Don’t add money to a losing position
Don’t trade on too many different currency pairs
Trade only with a good broker
Don’t open to many positions (no one needs 100 positions a day)
Develop your strategy and stick to it.
Know that NO ONE is 100% of the times right, everyone loses some.
Last but not least, don’t trade with money you cannot afford to lose.