There is an obvious interest by a number of people in Ghana to trade the Forex market, regardless of this, there seems to be a gap in knowledge and experience to guide people to actually profit from the Forex market. In this article, we would show you how to trade Forex in Ghana and actually profit from it without blowing your account.
There are so many ways to trade the Forex market from Ghana, indeed the mechanics of trading Forex is the same regardless of your location. While some of the things I would discuss with you here would be specific to Forex traders in Ghana, the same generalization can be made for every trader across the globe.
What is Forex Trading
Understanding what Forex Trading truly is, Forex trading is basically the act of buying and selling currencies with the hopes of gaining profits from the rise or fall of these pairs. When you buy a currency and its value rises, you gain money from it, but when its value falls you lose. When you sell a currency and its value rises you lose, but you gain when its value drop.
Does that sound confusing? If you are new to Forex and now learning how to trade Forex in Ghana, it might be confusing at first but read on.
A trader who buys a currency expects it’s value to increase for him to benefit, and when it’s value decreases, he actually losses out, in the same vain when a trader sells a currency, he or she expects the value of the currency to drop, and when it drops he makes money.
The History of Forex Trading
Basic Things to Know when Learning How to Trade Forex
Every profession has it’s own language or terminology that is used. When learning how to trade Forex in Ghana or anywhere else in the world, you need to know these terms to aid you in better understanding of the concepts as explained. Some of the key terms you should know are;
In Forex, currency’s are always paired. Currency’s never stand alone, unlike stocks. You always have currency’s in pairs. eg. GBP USD, NZD USD etc. Because of this combination, anytime you buy or sell a currency you are essentially buying one and selling the other at the same time.
The base currency is the currency that is mentioned first or appear first. in the example above, GBP USD, GBP is the base pair. When you issue a buy order of the GBP USD, you are effectively telling your broker to use your USD (Sell your USD) to buy the GBP. Why? Primarily because you believe the GBP is going to rise against the USD, and when it does, you make money, when it doesn’t, you lose money.
Leverage in Forex is a doubled-edged sword, it can make or unmake you. Leverage increases your purchasing power. Think about this scenario, if you fund your account with $1000, you effectively can buy 1000 of the USD or it’s equivalent in another currency.
These are some of the things not explained to you when learning how to trade Forex in Ghana, and yet these things are so important that they can destroy your dreams of becoming a professional Forex trader even before you start.
Your broker provides you with a leverage (in simple terms a short loan), these often comes in ratio’s. If your broker gives you a 1:50 leverage, it means for every dollar you put in, your broker is willing to loan you 50. Thus your $1000 deposit now has a purchasing power of 50,000 USD.
Why is leverage a doubled edged sword? Simply put a thousand dollar account without leverage can purchase 1000 USD or it’s equivalent in the other currency pair as explained above, which is essentially 0.01 lot size (You would understand lot size later). However, with the leverage you can now trade 0.5 lot size.
This means if the trade moves in your direction 1000 lot size, you win $500 dollars essentially half of your account is gained in a single trade. However if the trade goes against you that same amount of pips, you would have lost half of your account in a single trade.
This why we describe leverage as a double edged sword that must be used with caution. It becomes even more dangerous when broker’s offer leverage as high as 1:1000. Always remember, an increase in purchasing power often comes with an increased risk.
Bid / Ask Price
Forex quotes come in two’s, the bid and ask price. The bid price is the price you buy the currency from. The Ask price is the price you sell. There is always a difference in the bid and ask price, and this difference is called the spread. You should know that spread can increase your cost of trading, the best forex brokers have some of the lowest spreads in the market, flee from a broker that offers’ higher spreads.
When you go long, you are bullish on the base pair. in other words, you are buying and you expect the value of the base pair to rise against its counterpart. When you are short or bearish, you are selling the base pair and you expect it’s value to drop.
How to Trade Forex in Ghana; Key things to Note
Basic Things You Need to Start Trading Forex in Ghana
- A Computer with Internet Connection
- A broker
- Some Capital
- The Right Education
You need a computer with an internet connection, you could also trade via your phone or tablet but the ideal thing is to trade from a computer with a large screen. It does not necessarily mean the top of the line computer but you need something that does not freeze at the very least.
You would install then install a trading software from a broker of your choice, who you would trade with. The most popular of this software is the Meta trader 4 software, however, there are other software such as the meta trader 5, the C-trader, etc. You would come across several of these while learning how to trade Forex in Ghana, however I recommend you chose one and stick to it, I prefer the Meta Trader 4, and I think you would love it as well.
If you are learning how to trade Forex in Ghana, having a good broker is key to your success. Do not just choose any broker without proper research.
The Forex Broker is the intermediary between you and the Forex Trading Ecosystem. The broker provides the platform, the liquidity, and the security of your account. It is important to note that a broker can make or unmake you, hence choosing the best broker is of paramount importance.
If you want to read more about the best Forex broker to use as a trader in Ghana, kindly click here.
Now that you have a brokerage account, proceed to download the trading software which you would be using in your career as a Forex trader.
Ever heard the quote; ‘You need money to make money?’, well you are in luck, at this stage you need to fund your brokerage account, just how much to begin with should depend entirely on your financial situation. However, I do not recommend you put your entire life savings into your first brokerage account without proper Forex Education or Mentorship, chances are you would blow the account.
Learning how to trade Forex in Ghana by starting with a demo account. I understand there are differing opinion about this out there. The argument is that people trade different when real cash is involved due to their emotions, thus they are better off starting with a real account and mastering their emotions from day one.
I have a different opinion, there are different stages of training. If you are at the strategy phase in your journey of learning how to trade Forex in Ghana, it would not make sense risking real money. We start to deal with real money after you have mastered strategy and we are now dealing with you mastering your emotions.
The first 3 months of your journey as a Forex Trader, I recommend you use a demo account which your broker would gracefully provide you.
The demo account is your opportunity to trade the Forex market without actually risking real money. I recommend you start with a demo account commensurate of the amount you would put into your real account. Thus if you are planning to fund your real account with an amount of $1,000, you should use same for your demo account to get a realistic feel of trading a thousand dollar account.
As you begin your journey as a trader, learning how to trade Forex in Ghana, you would soon realize you need Forex Education or Forex Mentorship in order to make any money. This is an important decision that can make or break you. The right Forex Mentor would save you a lot of pain and agony in the long run and would contribute immensely to your success as a trader.
Sure, you can go solo and figure things out for yourself, but that would often take you years to master. we are here to help you.
The Forex market has created so many billionaires across the globe, but why do so many Forex trader’s in Ghana fail at making a living from trading?
Having the basic set up in place, it is time to learn even the most basic things, for example, you might want to learn the proper use of the Meta Trader software. We have a video here for you.
Why do Forex Trader’s in Ghana Fail
There are several reasons why a person learning how to Trade Forex in Ghana might fail, all of which can be classified into two points; Lack of knowledge, Lack of efforts. I explain more below.
- Lack of proper Mentorship; Every profession takes years of training and in some situations internships, The doctors, the Lawyer, the Engineers all take years of good quality training and mentorship in order to qualify. Unfortunately, most people who get into Forex just jump in one day, opens a brokerage account, and begin to gamble away. In my opinion, this is the number one reason Forex traders fail. Like every other profession, you need training, lots and lots of training. It is highly improbable to learn how to train Forex in Ghana and become successful, only a small fraction of people can, but it would take years and lots of emotional torture. Don’t torture yourself. Get mentored.
- Most Forex Traders in Ghana do not take trading as a profession, they end gambling instead of trading. Okay here me out. If you take Forex as a profession, you would have a standard operating procedure. If you go to a hospital, there is an SOP for a medical lab scientist to follow in performing any laboratory procedure, the surgeon has an SOP for his or her surgery. Tell me, what is your SOP’s for any trade you take? If you don’t have any of this, chances are you are gambling.
- The blind leading the blind; There are so many false prophets in this industry teaching people how to trade Forex. Encouraging people to believe they can start with nothing and become multi-millionaires overnight trading the Forex market. Leading people into Forex with a get rich quick mentality. These people sell you a product, a bot a signal, etc. and that is how they make their money instead of trading. They push these products as if it is the holy grail when indeed many of such products are filled with lies and smart marketing.
- Doubt; The story of Roger Banister and the 3 minutes barrier always comes to mind. If you are unaware of the story read it here. Most Forex Trader’s, have never seen a single successful trader in real life. Of course, there is the news and many blog articles of people referring to themselves as successful Forex trader’s but deep within, some of you are doubting, some of you are asking yourselves if Forex Trading is a scam to begin with.
- Greed; Greed is a terrible emotion in any business, it is more profound in Forex as the results are often devastating for the trader. How often do you make 100 pips, or perhaps 200 pips, and yet wait for the market to turn against you, to hit your stop loss? We all fall prey to this emotion of greed from time to time. However, you can not continue to do the same things over and over again and expect different results. I find the best antidote to curing greed in Forex is by having an SOP as described above and stick to it. Do not trade emotions, trade methods.
- Lack of Strategy, Lack of Efforts; At SlytEdge, We Mentor Forex Trader’s to become profitable in the Forex market. Doing this has taught us a lot about most retail brokers. Here are the bare facts. Most retail traders blow their accounts before they are able to take even the 50th trade because there is no strategy to grow their wealth. Why rush to blow a thousand dollar account, go work hard, fund the account only to blow it again? It makes no sense to me whatsoever. Most retail traders would rather blow accounts after account and yet find Mentorship too expensive. If you are willing to blow your next account, Love your dreams enough to seek a Forex Mentor.
Are you learning how to trade Forex in Ghana? Let us know your unique challenges in the comments.