What Is Forex Trading


The forex market is a market to exchange one currency for another for immediate or future delivery. There is a wide range of participants, from banks and brokers to corporations and individuals. It is made up of a network of counterparties who buy and sell currencies between themselves at an agreed market price, either for speculation or for hedging currency risk.

For the vast majority of people going about their daily lives, foreign exchange is only really relevant when planning an overseas holiday. However, for currency traders, forex trading offers an opportunity to earn profits from trading. The forex market volume is more than $6 trillion a day, trading 24 hours a day around the world, five days a week, making it by far the largest financial market in the world.

Currency values are affected by political and macroeconomic news, as well as technical analysis and trader psychology. These price fluctuations enable traders to speculate on the future value of a currency. While rewards can be huge, these opportunities do not come without risk.

Why forex trading is so important?

Forex trading is the oil which lubricates all global financial markets and is an essential element of all international business. Forex trading is carried out by banks, brokers, corporations, investment funds and individual investors. The collaboration between these different entities generates an extremely liquid global market that impacts and shapes businesses around the world.

The global forex market is critical to support international trade, as countries import and export goods and services across international boundaries. A country’s currency also acts as a pressure valve for its economy, helping to avoid continuous boom-bust economic cycles.

 For example, if a country has a weak economy, its currency will tend to devalue, which automatically makes it more competitive in international markets, stimulating exports and helping its economy to recover. 

The opposite is true for strong economies since a stronger currency makes a country less competitive abroad; hence, it should prevent the economy from overheating. Without the ability to trade in different currencies and across international borders, company prospects would be limited and global economic growth would suffer.

How Tradewise Global include forex into their programmes?

Tradewise Global is an accredited provider of training and education for individuals and companies in South Africa that want to learn to trade and profit from the Forex market. Our accredited on-campus and online forex trading programmes provide the academic knowledge and practical skills to enable students to trade Forex with a robust and structured trading strategy.

We believe that the best recipe for success is to not only teach our students the various concepts and strategies involved in trading but to also show them how to implement forex trade strategies with regular live market analysis. Whether you have been trading the markets for a while or are just starting out on your trading journey, our courses are suitable for traders of any level.

Forex trading strategies can take a long time to master, especially if you are only aware of the conventional methods of trading that you can find anywhere online. Our courses provide the in-depth knowledge required to enable you to develop your own methods and then enhance them as your trading experience grows.

Unlike other forex trading courses which teach how to execute a trade with basic forex strategies, Tradewise Global trading courses teach a personal trading development method. This method will separate you from the crowd and help you to identify your personal trading goals.

CFD’S What Is CFD Trading

 

A CFD stands for “contract for difference”. CFD trading allows you to take a position on the price of an instrument without actually owning the underlying asset.

One of the most unique aspects of CFDs is that they enable you to profit from falling markets as well as rising ones.

A contract for difference creates, as its name suggests, a contract between two parties on the movement of an asset price.

There are several key features of CFDs that make them a unique and exciting product:

 

+ CFDs are a derivatives product

+ CFDs are leveraged

+ You can profit from both rising and falling prices

A Contract for Difference (CFD) is an agreement between a buyer and a seller to exchange the difference in the price of an underlying
instrument over a period of time. CFDs provide clients with an opportunity to get geared exposure to the performance of a share in a simple

and cost-efficient format. CFDs allow investors to position themselves in relation to the rise or fall of JSE-listed securities, without the need for ownership of such securities.

CFDs are leveraged products that require an investor to deposit cash as margin rather than the payment of the full value of the underlying position. Depending on the position taken by such an investor, the investor may be either the long or the short holder of the CFD.Effectively cash is being borrowed by the long holder and lent by the short holder in respect of the underlying security. 

The initial margin deposit will vary depending on the stock traded but will provide for gearing of between five and ten times.

 

SHARES / Why Trade Shares

What is share trading and how does it work?

Shares trading is a popular choice among traders who want to take a position directly on individual companies. From technology and telecommunications to health care and utilities, shares trading offers endless options in terms of sectors and risk levels.

Trading profits are generated by buying a share at a low price and selling it at a higher one or by selling at a high price and buying at a lower one if you think that the share of a company will decline.

1. Exchange rates

Currencies fluctuate in value against each other 24 hours a day. As a rule of thumb, companies who import benefit when the currency of their country rises as their purchasing power rises too.

2. Oil prices

Companies who are dependent on oil for the conduction of their business, such as airlines, are the first to be affected by significant or unexpected changes in the price of oil.

3. New legislation

Let’s take tax policy for example. Should a country change its laws on corporate tax, this will have a direct effect on the profitability of the companies based in the territory.

4. Interest rates

Interest rates are determined by the central banks and reflect the cost of capital. A cut in interest rates, for example, can give stock markets a significant boost.

5. Expectations & rumours

Sometimes an event, such as an interest rate cut, might not even take place, but the stock markets can move significantly just because of the expectation. Should the event not materialize, the markets return to their usual trading levels. That’s exactly where the saying ‘buy the rumour, sell the fact” stems from.

6. Unpredictable events

 

In this category fall terror attacks and natural disasters. The September 2011 attacks caused the stock markets to plummet, with the Dow Jones losing as much as 7% on the day following the tragic event.

 

COMMODITY TRADING

What Are Commodities?

 

A commodity is goods used in business or on a market. Each commodity, when traded on an exchange, must meet standards and grades. They may each be slightly different, however, ultimately are the same amongst all producers. There are two different kinds of commodities, soft and hard:

Soft commodities – This refers to items that are grown as opposed to mine. For example, agricultural products such as sugar, corn, wheat, coffee and more. Produced by farmers, these instruments are highly sensitive to climate and weather changes and have cyclical price patterns dictated by seasons.

Hard commodities – This refers to items that are mined, such as Gold, other precious metals, diamonds and oil, along with other energy products.

 

What is Commodity Trading?

Commodity trading is an exciting and sophisticated type of investment.

While this type of trading has many similarities to stock trading, the biggest difference is the asset that is traded. Commodity trading focuses on purchasing and trading commodities like gold rather than company shares as in stock trading.

Like stocks, commodities are traded on exchanges where investors work as a team to purchase or trade products in an attempt to generate profit from the fluctuation of market prices or because they need that particular product.

DAY ONE

Price Action
Exchange Rates
Cyclicity
Emotional Mastery
Advanced Price Action
Trading Strategies
Placing a Trade
Creating your Plan

DAY TWO

SmartCharts
180 Profit Booster
Income Wave
Inter Bank Radar
Pip Runner
Money Market Breakout
Forex and the News
Risk Management
Trading Plan

DAY THREE

Put Theory into Practice
Place Trades in a Live Environment alongside Professional Trader
Review Theory
Develop Practical Understanding of SmartCharts
Make Money Live Trading
Discover Real-Time Market Insight