The retail trading industry in Africa has grown substantially over the past few years, and new market legislation has been introduced in a number of nations across the continent.
As a result of this expansion, experts now believe that there are as many as 1.3 million Africans actively trading currency.
Tanzania is no exception. Everything beginner forex traders in Tanzania need to know to get started successfully is outlined here.
1. Sign up with a regulated broker
When looking for a forex broker, it is vital to locate one that is regulated by a respectable body such as the Financial Conduct Authority (FCA) or the Securities and Exchange Commission (SEC).
There are a number of shady brokers and gurus out there whose main objective is to scam you out of your money. Therefore, if you want to start trading, you need to find a reliable broker that has been approved by a number of different regulatory bodies.
2. Practice on a demo account
After signing up with a broker of your choosing, you may use the demo account to get a feel for the market and learn more about the factors that affect the value of different currencies.
Trading on a demo account is a great way to learn the ropes of the broker’s platform and get comfortable with its features.
As a learning tool, demo accounts are especially helpful for novice traders since they allow them to practice dealing with the market’s inherent volatility without risking real money.
3. Analyse the markets
There is no assurance that a trader, no matter how much experience they have, will always be successful in their endeavours. Because of this, it is absolutely necessary for you to keep a constant awareness of everything that is going on in the rest of the globe in order to be able to make trading decisions that are based on accurate information.
4. Find a trading strategy that suits you
When trading the foreign exchange market (Forex), traders can choose from a dizzying array of strategies, with new ones being developed all the time. The best traders will use a wide range of strategies, and they will know exactly when to apply each one.
Methods for trading Forex will be based on either fundamental analysis, which examines economic trends and news events, or technical analysis (analysing historical price action on charts).
5. Manage your trading risk
Trading accounts can be opened with a minimum deposit of as little as $5 USD, despite the fact that the majority of brokers require only a minimum deposit of between $100 and $200. (12 000 TZS).
The question that needs to be answered before you start trading is, how much money should you put down? Both the amount of money you have available to spend and the amount of risk you are willing to assume are factors that go into the calculation.
The vast majority of seasoned currency traders agree that a trader should never risk more than three percent of their account balance at any given time.