Hello subscribers and readers, welcome back, it’s been a while. If you just stumbled upon this blog today, you are welcome. Should you find value in this post and wish to be notified whenever there’s a new publication, please kindly subscribe. Today’s topic is one of the frequently asked questions from people who follow my work online, people ask me this question every other day, including my mentees. That is also a biggest contributor of people seeing it fit to borrow money to trade. I cannot ignore the fact that Forex trading has been portrayed as the quickest way to make money online. Without further ado, let me get to it.
Why Do People Borrow Money?
Most people borrow money when there’s an emergency that needs to be taken care of and they have no emergency fund to finance it at that time. I know that other people do borrow money just so they can go and have some fun, but today I need to focus on borrowing for a need. A person who borrows money to trade may feel that there’s a need as they also believe that they can easily pay it back after trading for a week or so.
Disadvantages Of Trading With Borrowed Money
Trading requires you to be “sober minded”. Anything that causes stress, pressure and anxiety should be eliminated or avoided. When you trade under pressure, you are likely to be impatient and make mistakes. Let’s say you borrowed R50 000 from the bank and your loan repayment is R3000 p/m (please note that these may not be accurate figures), this will mean that every time you place a trade, you will be thinking about making that R3000 and if it happens that you are only left with one week to pay, you’ll find yourself forcing your way into the markets so you can make the loan repayment amount. I have done this a lot and I have seen other people doing it. It always leads to margin call.
What If My Start Up Capital Is Too Small?
I always advise traders not to trade on demo for too long because trading on live account is totally different from trading on demo, it requires its own practice and no one gets too attached to fake money. If you think your capital is too small, do not wait until you get more money. Start small and work on growing it. I have published a PODCAST on this topic, please do check it out for practical tips on how to grow a smaller trading account. I know from feedback that this episode has been helping a lot of traders to grow their smaller trading accounts.
I hope this helps. Thank you for stopping by. Please kindly share this post with your peers using the share buttons on the sidebar. For weekly tips on trading psychology, you can download the App on Google Playstore and never miss out on those tips. Stay safe and take care.
Stock Index trading is when you trade a basket of stocks which make up an index , but you go through one of the instruments like Nasdaq, Ftsee100, S&P500, Dow Jones, Dax and many others to trade it. Stock Index trading is different from Stock Trading. In Stock Trading you are trading stocks of specific companies, and each company has its own price. Once you’ve purchased stock, you then own the stock and it has to be transferred to you by the seller. Stock trading also requires you to do lots of research about companies where you want to buy their stocks.
How to trade Stock Indices?
Trading in the Forex markets is not only about currencies. There are various financial instruments that can be traded (you may require a bigger capital to do so). Maybe up to now you thought trading stocks is not for you, you are a Forex trader. The opportunity for Stock Index trading is presented right in front of you, you see it every day when you log in to your trading platform. If you are like me and you have taken trading financial markets as an investment, you might want to diversify your portfolio by introducing Stock Index trading to your daily activities, instead of focusing on currencies only. Let me start by identifying some of the few stock indices that you can check out.
INSTRUMENT
CATEGORY
Dow jones/USA30
Industrial
Nasdaq/USA100
Technology
Ftse100/UK100
Comprises of 100 companies on London Stock Exchange (Vodafone is one of the companies listed)
S&P500
Comprises of highly market public held companies. Amazon is one of them.
Dax/Ger30
Represents 30 largest and most liquid German companies that trade on the Frankfurt Exchange
Advantages of trading a Stock Index
Stock indices have generally higher returns than the stock market they represent.
The volatility is reduced when compared to currencies.
Stock index trading requires less research as opposed to trading /investing in individual stocks.
When trading a stock index e.g. FTSE 100, you do not have to spend weeks analyzing all 100 companies under this umbrella but all you can do is just follow FTSE 100 index as you would do analyzing your currencies.
Stock index trading does not require any traditional stock brokerage where you pay high fees, you can buy and sell on the same Mt4 trading platform as you would do with your currencies and it is a much cheaper way.
How to trade FTSE 100
You will have to know what is happening in the markets as far as the economic calendar is concerned in order to succeed in this. A few points to consider when trading FTSE 100 is the release of Interest Rates announcements, UK manufacturing numbers, GDP (gross domestic products) figures, housing figures and Inflation data.
All the above are key to trading FTSE 100 successfully. This index tends to imitate the European markets as it trades during the same time frame as European markets. As I always say “we are eating this elephant one piece at a time.”
Ask anyone in any field, they will tell you that without patience and perseverance , you can never go anywhere (we cannot do anything without it). Whether you want to lose weight, eat clean, start a new business, or even being a parent requires a lot of patience. Being patient means we have to learn to be calm, even when things aren’t going our way. As hard as it is to exercise patience, it is one skill that everyone must possess, especially in this field of trading in the Financial markets.
When I look back at what I’ve been through in my trading journey, there were times when I really felt like giving up but I am glad I didn’t. A trader who lacks patience will always donate his/her money back to the Markets. Newbies to the markets do not really like to hear the word patience, all they want to do is to place that trade and make their profits. Professional traders do not trade every hour of every day and as a trader, you need to develop different types of patience for different situations.
1.Patience to wait for your perfect setup
Most traders fail even with the best strategies. They fail because they are not patient enough to wait for that perfect setup. If you always trade when in a rush and never plan for your trading sessions, you are only headed for disaster. Every business has a structure, I fail to understand why traders think it is OK to just trade without a proper plan or structure. If you want to be successful in this field, you need to learn how to plan and follow through with your own trading plan.
2.Patience to let your trade run for a bit longer
There are traders who are very patient to let a losing trade run for a few days while it depletes their free margin, but they fail to let a winning trade run till it reaches it’s targeted profit. All the above applies with every method of trading. In my method of trading planning is everything. I teach my mentees to be good planners and never to be random in the markets. Every business has some sort of structure and forex trading is no different. This was the shortest post I’ve ever written but hopefully you have gained something. I have just done my weekly trading plan and I am ready to face a new week with new possibilities and opportunities.
Thank you for stopping by. Please kindly share this post with your peers. To receive notifications on your email whenever I publish a new blog post, you can subscribe to the blog. You can also download my App on Google Playstore and have this content at your fingertips. Earlier today, I published a new episode on my Podcast titled ”Trading for a living, is that even possible?”. Till next time, cheers.
Addiction is a condition of being addicted to a particular substance or activity. In this instance we are referring to Forex trading as an activity. It is also very true that Forex trading can be easily turned into some serious gambling if a trader gets addicted to it. I have also seen that a person who has a gambling problem finds it challenging to succeed in Forex trading because gambling is all about crossing your fingers and just hoping for the best.
A person who gambles in casinos sees a slot machine whenever they look at charts and they get that adrenalin rush. Until they work on their gambling problem and overcome it, it is only then that they can see progress in their trading as well. I have had a few experiences with mentees who had a gambling problem that they had to overcome in order to start seeing great results in their trading. They all had similar challenges. This is not a fact, but just something that I have observed.
How Do You Know That You May Be Addicted To Forex Trading?
At some point in my life, I was also really addicted to Forex trading. I will list a few of my then issues and also most of them are the issues that most people struggle with. I will also share tips on how to overcome them. We know that addiction can cause unproductivity, break families, friendships or even ruin businesses and lead to debt. Forex trading addiction is NO different, it can do the same. Below are the most experienced issues.
You are constantly feeling like you might miss out on an opportunity if you take your eyes off your platform and therefore you stay glued to it the whole day. You treat your trading platform as a hang out spot.
You set your daily targets, but you can’t seem to stop even when you’ve made 5 times more, as a result, you always give all the daily profits back to the markets at the end of each trading day.
Every time you can’t sleep for whatever reason, you always go straight to your platform in the middle of the night to trade.
You are always checking out Forex forums or social media groups just to see what other people are trading and you follow everyone’s trades and disregard your own trading plan (if at all you have one).
You get super excited whenever you see anything with the word “Forex” in it and the word “strategy” excites you even more. You are always hunting for the new strategy. I went through all the above mentioned.
What Can You Do To Overcome it?
1.UNLEARN some of the things that you believe about Forex trading. You may be finding it easier to be addicted to it if you still believe that the more you trade, the more you make money.
2. Find something else to spend your free time on, get productive.
3. If you think that Forex forums/groups are contributing to your addiction, remove yourself so you can focus on your healing.
4. Avoid subscribing to every website that sends you daily signals, it can be really confusing and overwhelming.
5. Make up your mind and want the change, you have to want to change. You can do it, I know you can. I DID.
I hope these tips help. Thank you for stopping by. Kindly help me reach out to more people by sharing this post. Thank you and please take care of yourselves and stay safe.
Hello readers & subscribers. If you recently subscribed to this blog, you’ve probably noticed that you haven’t received any new weekly publications (2020 has been hectic & overwhelming). If you just stumbled upon this blog, welcome, please do subscribe. The year 2020 has been rough for most of us. I know that in the beginning of each year, most of us have our plans drafted and how we would like to start a new year, we have our goals and we are usually looking forward to a new year. 2020 was no different, we had plans and goals. Some of the goals were reached and some weren’t. Some of the plans had to be halted or adjusted. A lot of people lost their lives, their job, businesses and livelihoods. There’s still a lot to be grateful for though. Having an opportunity to read this post, calls for gratitude just for being alive.
Desperation Left So Many People Vulnerable
There’s been a lot of financial uncertainties due to the struggling economies. A lot of people started to look for alternative ways to make money. Forex trading became one of those alternative ways. Most people started to hunt for online investment opportunities. Scammers have been having a “feast” with more people getting vulnerable for the fear of losing their businesses or jobs. It is unfortunate that even those who lost their jobs had to lose all their life savings from joining all these Forex “investments” scam companies that promised them higher returns with zero efforts. I must say that the FSCA has been doing a great job in investigating and shutting these companies down. Unfortunately, the losses may never be recovered. I also published a blogpost warning potential investors about Forex scams being on the rise since the Covid-19 pandemic. You may also like to learn how to verify any financial service provider, if they are authorized to offer investments packages to the public, check that information HERE, for the safety of of your funds.
Thank You, Thank You, Thank You
From the bottom of my heart, I thank you for reading my posts, I thank you for subscribing, I thank you for sharing my work, I thank you for downloading my App, I thank you for listening and following my Podcast and I thank you for enrolling for my private lessons, mentorship & coaching. (WhatsApp +27 78 144 6851 for available special offers on private lessons, learning how to trade for yourself is the best option). The plan was to publish at least 50 articles in 2020, I only managed to publish 31 articles. I am grateful for being able to do that under these circumstances.
Take Care
Please take care of yourselves, stay safe and wear your mask. I wish you a happy and a prosperous new year, not forgetting good health. May all your 2021 plans and dreams come to fruition. Let’s cross over safely and continue to dream and dream big. Remember, you are BLESSED & UNSTOPABLE. Cheers, till we meet again in 2021.
FSCA : Financial Sector Conduct Authority formerly known as Financial Services Board (FSB) is the regulatory body of financial institutions that provide financial services and offer financial products. These institutions include banks, insurers, market infrastructures and retirement funds/administrators. They are all licenced in terms of the financial sector law.
What Is The Main Responsibility of FSCA?
The FSCA supervises and regulates the conduct of financial institutions. They also help to protect the financial customers by ensuring that they get fair treatment from financial institutions. Their mandate is to enhance, maintain and support the efficiency and integrity of the financial markets. The FSCA also provides financial education and issues warning statements about financial institutions that are under investigations or have their licence withdrawn etc. You can read all about their media release on their website HERE, who knows, you might just see your current financial institution on the news. Those financial services who are treating customers unfairly and breaking the law, are severely dealt with.
Why This Blog Post?
Sometime last week, a story broke out about how the Minister of Finance said Forex trading is illegal in South Africa (which was clearly incorrect information/fake news). From the comments that I was reading online regarding the story, I realised that most people are not aware that they have rights and access to call and verify any financial markets related news with the regulatory body. I obviously did that and spoke to them and they confirmed that if there’s any news like that, it would have been on their website since they are the one who regulate the industry.
It also didn’t make any sense to have a whole minister of finance talking to a newspaper publication about illegalizing Forex trading before speaking to the regulators. I also get a lot of emails, WhatsApp texts and other social media inboxes from people who are scammed by companies simply because they had no information on how to check if those companies are authorized to offer Forex and other types of investments. I then decided to post this information here to educate more people about FSCA because sharing information is my calling. I am hoping that you’ll be kind enough to help me spread this information to as many people as possible because it might save lives. Below are the instructions on how to check if your Forex broker or any other financial institution is authorised to offer the services that they currently offer. Go to the official FSCA website by clicking HERE and follow the steps below.
Step 1
Step 2
Step 3
Step 4
Step 5
Step 6
Step 7
Step 8
Step 9
Conclusion
For the safety of your funds, never trade with an unauthorized broker or give your money to any unauthorised institution or individual, even if they show you their FSP number, always confirm and verify with FSCA if they are authorised to handle public funds. Most Forex Brokers or companies are offering services that they are not authorised to offer. On the last step (step 9) click on “here“ and you’ll find more information on the products. To get to “here” you can click on “key individuals”. If anything confuses you about the products, you can call FSCA or email them.
The broker that I used for demonstration, is one of the brokers that I trade with. I also wrote a review on them. You can check out the review post HERE and if you wish to open an account with them, you’ll find a link on that post and feel free to WhatsApp me for assistance should you get stuck (WhatsApp details at the bottom of this post). Some brokers are trading under a different name. If that is the case, the information should be on the broker’s website and you can still get the FSP number from the website and verify it, the name that they trade under, will definitely show up when you check their FSP number.
I hope you found some value in this post. Kindly help me to reach out to as many people as possible by sharing it. Thank you for stopping by and please stay safe. Don’t forget to download the App on Google Playstore to have this content at your fingertips
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