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What you need to know about Online Forex Trading in Zimbabwe

The Foreign Exchange Market is the largest financial market in the world. Bloomberg, a global leader in financial data and analysis, reported a daily currency trade volume of over $6.6 trillion, back in April 2019. This was a 29% increase in volume compared to April 2016.

The Foreign Exchange Market is the largest financial market in the world. Bloomberg, a global leader in financial data and analysis, reported a daily currency trade volume of over $6.6 trillion, back in April 2019. This was a 29% increase in volume compared to April 2016.

24/5 availability, low capital requirements, high liquidity and zero low-entry costs are one of the few factors that has made retail forex so popular among investors.

With the rise of 3rd-party trading platforms like – MT4 and MT5, many low-cost retail brokers have opened in recent times which resulted in the growth of retail forex trading globally. In Africa too, retail FX trading has grown in the past few years and presently there are estimated to over 1.3 million African forex traders that trade in forex daily.

The trading in forex market is done on currency pairs. Traders can buy, sell or exchange currencies based on the current exchange rate of a currency pair like EUR/USD. FX trading involves a lot of risks and traders have to take risks related to leverage, interest rate, economy and counterparty into account before starting forex trading. Also, there are other risks related to human emotions and insufficient knowledge of the financial instrument & market uncertainty.

We take a look at some of the aspects of retail forex trading, the reasons behind its increasing popularity among African investors and the risks involved.

What is Retail Forex Trading?

 

Retail forex trading is a part of the larger forex market where banks, government and companies transact. Retail forex traders speculate on the exchange rate fluctuations of different currencies. Speculators buy currencies with the aim to sell them off at higher price later on.

 

Speculation can result in gains for the traders but the risks involved are very high. This is because, during the period that an investor holds the currencies they’ve bought, the currencies can fluctuate in value due to various reasons which can be hard to predict for most traders.

 

The forex market trade is done on currency pairs such as – the EUR/USD or Euro/US Dollar pair. Here, the base currency is Euro and the quote currency is US Dollar. Presently, the exchange rate of the EUR/USD pair is around 1.18. This means, in exchange for 1 Euro you can get 1.18 US Dollars. The EUR/USD pair is the most traded currency pair in the world.

Why is it so popular among African investors?

 

Africa has seen an increase in retail forex trading demand over the past few years. Currently, South Africa, Nigeria, Kenya, Tanzania have around 200,000, 190,000, 65,000 and 50,000 forex traders respectively. And Zimbabwe too has reportedly over 45,000 traders in the retail forex market.

One of the main reasons for this impressive growth in the region is the establishment of local forex regulatory bodies in Africa like – Financial Sector Conduct Authority (FSCA of South Africa) and the Capital Markets Authority (CMA of Kenya) which created secure & regulated trading environment for SA & Kenyan traders in which they oversee the conduct of the market participants as well as educate local investors about the risks. The FSCA and the CMA issue brokerage licenses as well as function as financial watchdogs over institutions that provide financial services and products.

Moreover, the startup & regulatory costs imposed by the FSCA and CMA on African brokers are much lower than most other regulatory bodies in EU, UK and Australia. This resulted in many local brokers like CM Trading, BlackStone Futures to open & grow their business in Africa and also encouraged big overseas brokers like FXTM, IG, HotForex, Avatrade, Pepperstone to get forex broker license from FCSA & CMA.

These brokers help build the local ecosystem in Africa for new traders by establishing local IB networks, trader groups, seminars where new investors are educated about forex trading.

Apart from above, African forex investors are attracted to forex market due to its unique nature over the other financial markets. This includes high volume, liquidity, low entry costs, ease of deposit/withdrawal options, 24-hour services and on-the-go trading facilities that can be availed by using just a mobile application or any platform of choice. Further, with the rise of mobile internet, social media and digital communications, more and more young people are coming to know about trading and are turning to online investing.

But, this growth has also caused rise to investment scams in Africa, just as there are genuine brokers who aim to provide safe environment to the investors and build a reputation for themselves, there are also some unregulated entities/persons who want to cheat inexperienced investors with false claims and promises.

Risks of Investing in the Forex Market

 

Most of the risks involved in forex trading arise from trading with insufficient knowledge about the markets.

But, most common risk that new forex investors take is trading with an unregulated broker. Not all unregulated brokers pool money from the public with ill-intent. But, in most cases this is their intent and many new investors fall prey to such persons/entities who make huge promises of returns or never invest their money in the markets. So, it is always wise to choose a regulated forex broker that is licensed by bodies like FSCA, CMA, FCA or ASIC.

In case you run into any disputes with a regulated broker, you always have a dispute resolution body to appeal to for damages and seeking legal aid. But this is not possible in case of unregulated entities. So, it best to avoid them and be safe than sorry!

Apart from above, there are some inherent risks associated with retail forex trading. Such as:

  • Market Volatility and Unexpected Movements

 

The forex market is very volatile in nature. This is because the value of any currency is influenced by various economic, political and natural factors.

Any event, whether of local, national or global significance, can have the potential to crash the markets. This is why investors need to stay highly alert and updated, to be able to make a move in case of any unfavorable development.

For example, in the month of March, almost all currency pairs became volatile and some even dropped upto 35% in value. The cause was the outbreak of novel coronavirus. Developing nation currencies took the worst hit and one of the worst affected ones was the South African Rand – falling by around 32% against the US dollar, in the months of March and April.

 

  • Risks of using High Leverage/Margin Trading

 

Margin based trading allows you to trade with only a fraction of the required capital for an investment. It is expressed as a ratio of the minimum amount of money needed to make the investment against the actual amount of capital required for the investment. Most brokers in Africa offer high leverage with low margin requirements to their clients.

For example, for an investment worth $1000, a leverage of 1:1000 implies that you only need to pay $1 as margin to the broker.

Leverage is a double-edged sword. Higher leverage means higher profits, but only if the trade plays out in your favor. If it doesn’t, you can lose just as much as you stood a chance to gain.

  • Over Trading & Investing more than you are willing to lose

 

Due to the volatile nature of the forex market, any trade can go wrong in seconds. If you invest all your money at once, there is a chance that you might end up losing all of it. This is why one should only invest a fraction of the money from their savings and only invest what they can afford to lose.

Risk Management could help reduce risks of a forex trader where trader can determine his/her risk tolerance and make adjustments to their portfolio based on the same. It can be done through tools provided by brokers like:

  • Negative Balance Protection-

Protects you from incurring losses more than the amount you have deposited.

  • Stop-loss Orders-

Protects you from incurring losses greater than your risk tolerance. A stop-loss order can stop a trade if the losses exceed a pre-defined threshold.

However, even with proper planning and use of risk management tools, investors can still lose a lot of money. This is because the forex is much riskier to invest in than other investments like government bonds or mutual funds. For new investors, it is recommended to start trading in small amounts. This will help you to get accustomed to the market and also determine whether or not it is suitable for you.

Is Forex Trading Legal in Zimbabwe?

There is no clarity on rules relating to Online Forex Trading in Zimbabwe as there is no direct law or directive allowing or banning online forex trading activity.

Foreign exchange transactions are regulated by Reserve Bank of Zimbabwe and exchangers must be regulated by bureau of exchange. And trading is allowed to Regulated Organizations through new forex auction system.

Individual Investors are not allowed to invest online as there are restrictions on online & offline foreign exchange transactions. Yet some investors find their way to do so, which is illegal.

There is no regulation for forex brokers in Zimbabwe making it risky for investors. There is no forex broker that is regulated in Zimbabwe and if anyone claims so, take caution.

If you still want to invest in forex at your own risk, you must do proper due diligence on local Forex laws, online investing restrictions in Zimbabwe and on brokers you want to choose. Most globally reputed forex brokers are regulated under different top tier regulations like FCA, ASIC, FSCA and you must only trade with them.

New forex investors should study, analyze the market and strategize accordingly and before starting off with real money, test their strategy in a demo account. Most reputed brokers provide demo accounts to their clients. Demo accounts can help you familiarize with the effectiveness of your strategy and also help you understand more about the trading platform and tools offered by the broker.

Make sure you understand the laws and regulations in Zimbabwe on online forex trading before you invest any money.

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Neteller Launches Cryptocurrency Exchange Service

Neteller Launches Cryptocurrency Exchange Service

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.

Neteller and Cryptocurrencies

Neteller is a service which is operated by Paysafe Financial Services Ltd.,

paysafe

paysafe

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.

Conditions for buying and selling cryptocurrencies through Neteller

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

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The basics of trading that one should know

The basics of trading that one should know

Things you should be aware of before you start

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.

  1. Most Brokers don’t charge commissions – you pay only the bid/ask spreads.
  2. There’s 24hour trading – you decide when to trade and how to trade.
  3. 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
  4. You can trade on leverage, (something to be very aware of as it can magnify potential gains but also your losses).
  5. Forex is accessible for almost everyone– you don’t need a lot of money to get started
  6. 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

  1. Get involved in the market, watch read and listen to the news to understand what is happening
  2. Go through a trading course ( a good one is here)
  3. 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.
  4. Check out social trading, there are some options for this, this broker offers this also.
  5. Try with an amount that you are able to afford losing. See this as your tuition money.
  6. Take it slow, don’t become greedy and follow the basic rules

Basic Rules (there are many more but start with these)

  1. The trend is your friend
  2. Don’t add money to a losing position
  3. Don’t trade on too many different currency pairs
  4. Trade only with a good broker
  5. Don’t open to many positions (no one needs 100 positions a day)
  6. Develop your strategy and stick to it.
  7. Know that NO ONE is 100% of the times right, everyone loses some.
  8. Last but not least, don’t trade with money you cannot afford to lose.

Now all that I want to say is good luck.  😊

 

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Wanted Cryptography Experts in China

 Wanted Cryptography Experts in China

The sooner we get to the official launch of China Digital Money. the more Cryptography Experts are needed.

it almost is surreal as they pushed against this from the beginning but now S China digital money may soon be a reality.

The Bank of China (PBOC) is hiring cryptography experts by the masses as reported by the South China Morning Post (SCMP)

this is the latest in the Chinese efforts to have a state controlled cryptocurrency for its own means.

The institution is one which worries a lot about the effect of investor activity in the cryptocurrency market. this in great contrasted to the directive issues in 2014 by the PBOC  that Bans any activity related to the cryptocurrency market.

Yet the Central bank of china started to build their own work force for building and developing their crypto in 2017.

something like if you can beat them , copy them.

in 2017 the Yicai Global reported that this targeted workforce would work from central Beijing as was to be names the  digital currency research institute

This research institute would primarily focus on the latest in digital currency technologies and all the different applications that would benefit from cryptocurrencies.

the former deputy director of the PBOC’s science department, Mr Yao Qiann would be in charge of the overall project

since then they are expending with opening a new research institute expanded in Nanjing . the idea for this center is to create more interest n the technologies and its possible applications.

the pilot programs are to be implemented by state controlled banks and academic institutions which should result in blockchain hubs that would attract new developing talent and additional capital to further develop the cryptocurrencies.

“Beijing’s ideal digital currency must ensure the smooth running of monetary and financial stability policies and at the same time protect consumers.”

Apparently, the ultimate goal for the Digital Currency Research Institute (DCRI) was to clear the path for a national cryptocurrency. Reports indicate that the fintech hubs will serve a purpose higher than initially believed. Reportedly, the hubs will serve as testing ground for China digital money. Here, the currency will undergo tests from prototype phase to future mass production.

and thus we get to the point that they are looking aggressively for new talent in the cryptographers and computer scientists sectors. now that more and more student have said good bey to the united states in the last couple of months after feeling they were less welcome this drive for finding new employment has only intensified and is answered by the large amount of brilliant young people coming back to live in chine after their education abroad.

The salaries are even higher then what they would have earned if they would stayed in the US and gone of to work in some of the companies in the Silicon Valley.

So we could expect that China is now also looking to become a world player in this industry as they have become the leaders in so many other fields.

 

 

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