Introduction To Forex Trading A Zimbabwean Perspective v2

Introduction to Forex Trading: A Zimbabwean Perspective
Introduction to Forex Trading :
A Zimbabwean
Perspective
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Introduction to Forex Trading: A Zimbabwean Perspective i
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Introduction to Forex Trading: A Zimbabwean Perspective ii
01
What Is Forex? 1
05
How Do You Start Forex
Trading From Zimbabwe?
02
16
Advantages Of Trading
Forex 3 06
Risks Of Trading Forex 19
03
Understanding Currency 07
Pairs 5 Frequently Asked Questions
Why do exchange rates On Forex Trading In Zimba-
fluctuate? 8 bwe 23
04
How do you profit in forex
trading? 9

Introduction to Forex Trading: A Zimbabwean Perspective 1
01
What Is Forex?
Foreign Exchange market (forex or FX for What Is Forex Trading?

short) is a global marketplace for
exchanging national currencies. Forex trading involves the buying & sell-
ing of global currencies in the forex mar-
The FX market is decentralized. In other ket with the objective of making a profit
words, there is no physical location where on the fluctuations in the exchange rate.
investors go to trade currencies as they
do for stocks on Wall Street or on the Zim- Simply put, you buy a currency when you
babwe Stock Exchange. believe its value is going to appreciate
(go up) against the other currency or you
FX traders use the Internet to check the sell a currency when you believe its value
quotes of various currency pairs from is going to decrease (go down) against
different dealers. the other currency.
The forex market operates every day When you exit the trade, the difference
except the weekends and its volume between the trade’s entry & exit price de-
reached up to US$6.6 Trillion per day in termines your profit or loss.
2020. The forex market is very liquid, one
can buy and sell currencies instantly i.e. An illustration will help you understand
there are always buyers and sellers at any forex trading.
given time when the markets are open.

Let’s suppose you are a Zimbabwean and to these fluctuations, it becomes possible
you visit South Africa and you have some to make a profit from speculative trades.
US$ in your pocket. The first thing to do is
to exchange your US$ for the Rand and Until recently, forex trading in the curren-
you can do this in a bank. This process is cy market had been the domain of large
itself participation in the Forex market by financial institutions, corporations, cen-
exchanging one currency for another. tral banks, hedge funds and extremely
wealthy individuals. The emergence of
However, the forex trading we are dis- the internet has changed all of this, and
cussing here is not done physically, rather now it is possible for average investors
it is done online. to buy and sell currencies easily with the
click of a mouse through online broker-
In forex trading, traders hope to gener- age accounts.
ate a profit by speculating on the value
of one currency compared to another.
This is why currencies are always traded
in pairs—the value of one unit of currency
doesn’t change unless it’s compared to
another currency. Exchange rates are al-
ways changing and fluctuating, and this
happens because of different factors. Due

02
Advantages Of Trading Forex
1.) The forex market is open 24hrs/day,five days a week.
From the Monday morning opening in Australia (11 pm Sunday Zim time) to the
afternoon close in New York (11 pm Friday Zim time), the forex market never sleeps. This
is awesome for those who want to trade on a part-time basis (even if you are em-
ployed full time) because you can choose when you want to trade.
2.) You can use leverage in forex trading
In forex trading, a small deposit can control a much larger total contract value.
Leverage gives the trader the ability to make nice profits, and at the same time keep
risk capital to a minimum.
For example, a forex broker may offer 500-to-1 leverage, which means that a $50
dollar margin deposit would enable a trader to buy or sell $25 000 worth of
currencies. Similarly, with $500 dollars, one could trade with $250 000 dollars and so
on. While this is all presents a chance for increasing profit, you should be warned that
leverage is a double-edged sword. Without proper risk management, this high degree
of leverage can lead to large losses.
We will discuss this later.
3.) There is high liquidity in the forex market
Because the forex market is so enormous, it is also extremely liquid. This is an

advantage because it means that under normal market conditions, with a click of a
mouse you can instantaneously buy and sell at will as there will usually be someone in
the market willing to take the other side of your trade.
You are never “stuck” in a trade. You can even set your online trading platform to
automatically close your position once your desired profit level (take profit order) has
been reached, and/or close a trade if a trade is going against you (a stop-loss order).
4.) There are low barriers to entry in forex trading
Getting started as a currency trader does not require lots of money. Online forex bro-
kers offer “mini” and “micro” trading accounts, some with a minimum account deposit
just of $5 or less (We will look at different brokers in later sections).

This makes forex trading much more accessible to the average individual who doesn’t
have a lot of start-up trading capital. It also means you can start without risking signif-
icant amounts of capital and you can scale up as needed.
6.) You can practice forex trading using virtual money
Most online forex brokers offer “demo” accounts that allow you to practise your trading
and build your skills, along with real-time forex news and charting services.
The demo accounts are free and you can open one at any time without any obligation.
Demo accounts are very valuable resources for those who are “financially hampered”
and would like to hone their trading skills with “play money” before opening a live trad-
ing account and risking real money.
Demo accounts allow you to get a feel of the trading process without using your real
money. Every trader should start trading with a demo account before risking real mon-
ey. We will show you how to open a demo account in the following sections.
7.) You can trade forex from anywhere in the world
With forex trading, you can trade from anywhere in the world as long as you have a
device with an internet connection! This means that with forex trading you choose to
settle in any part of the world and still continue your trades. You can still trade even
when there is a level 5 lockdown in your country.
You can trade at home in your pyjamas, report to no boss and not have to keep up with
those nosy and irritating co-workers. Forex trading can offer one a possibility of being
their own boss and if done well it can pay handsomely.
These are some of the reasons why forex trading is getting more and more popular
amongst Zimbabwean forex traders.

03
Understanding Currency Pairs
Currencies are always traded in pairs—the value of one unit of currency doesn’t change
unless it’s compared to another currency. Forex transactions involve two currencies,
which form a so-called currency pair. One currency is bought, while the other is sold.
Consider the USD/ZAR currency pair. If you buy this pair, you will be buying dollars and
selling rands. If you sell this pair, you will be selling dollars and buying rands (ZAR is the
international currency symbol of the South African Rand).
Which are the most traded currency pairs?
The following are the most traded pairs
• EUR/USD.
• USD/JPY.
• GBP/USD.
• AUD/USD.
• USD/CHF.
• USD/CAD.
• EUR/JPY.
• EUR/GBP.
Most currency traders stick to these pairs because they generally have high volatility.
We would suggest that you start out with these pairs too and expanding as you gain
more knowledge.
To illustrate volatility, let’s use two charts. The chart below shows a currency pair with
high volatility.

The chart below shows low volatility in the circled area. This is called a ranging market
(because the price movement stays within a certain range) and is a bit tricky to trade.

Reading a Forex Quote
One of the biggest sources of confusion for those new to the currency market is the
standard for quoting currencies. In this section, we’ll go over currency quotations and
how they work in currency pair trades.
Let’s simplify it: Do you remember when $1 was equal to R10 in Zimbabwe? The quote
would look like this
USD/ZAR=10
The currency to the left of the slash is the base currency, while the currency on the
right is called the quote or counter currency. The base currency (in this case, the U.S.
dollar) is always equal to one unit (in this case, US$1), and the quoted currency (in this
case, the South African Rand) is what that one base unit is equivalent to in the other
currency. The quote means that US$1 could buy 10 South African Rand.
Since the base currency (USD) is always equal to $1 in the quote, if the rand gets
stronger the quote would look like this.
USD/ZAR=8
This means that you now need fewer Rands to buy one dollar.
If the Rand becomes weaker against the USD, the quote would read something like
this.
USD/ZAR=15
Meaning you now need more Rands to buy one dollar.
The forex quote includes the currency abbreviations for the currencies in question.
Most currency exchange rates are quoted out to four digits after the decimal place,
with the exception of the Japanese yen (JPY), which is quoted out to two decimal
places.

Why do exchange rates fluctuate?
Exchange rates float freely against one another, which means they are in constant
fluctuation. Currency valuations are determined by the flows of currency in and out of
a country. High demand for a particular currency usually means that the value of that
currency will increase.
Demand for a currency is created by tourism, international trade, mergers and

acquisitions, speculation, and the perception of safety in terms of geopolitical risk.
If, for example, a company in Japan sells products to a company in the United States
and the U.S.-based company would have to convert dollars into Japanese yen to pay
for the goods, the flow of dollars into yen would indicate a demand for Japanese yen.
If the total currency flow led to net demand for the Japanese yen, then the yen would
increase in value.
You may remember a time in Zimbabwe in the last decade when we were using our
own Zim dollar and the rate of the rand would fall towards Christmas when Zimba-
bweans who were working in South Africa would come back home with the rand and
change it for the Zim dollar.
The rate of the rand would fall in comparison with the Zim dollar because the rand
would be in high supply. The rate of the rand would shoot up in early January as those
people now wanted to go back to South Africa and the rand would be in high demand.
This illustration shows how demand and supply affect exchange rates.
Currencies are traded around the clock - 24 hours per day. Even though morning in
Tokyo occurs during U.S. night-time, trade and banking continue around the world.
Therefore, as banks around the world buy and sell currencies, the value of currencies
remains in fluctuation. Interest rate adjustments in different countries have the biggest
effect on the value of currencies because investors typically look for safe investments
with the highest yields.
If an investor can earn 8.5% interest on deposits in England but can pay 1% interest for
the use of money in Japan, then the investor would pay to borrow the Japanese yen
in order to buy the British pound. Such trades take place all the time and in very large
numbers.

04
How do you profit in forex trading?

So now you have an idea of what forex trading is, let’s tackle the one burning question
that everyone who is interested in a new business venture asks:
Where is the money?
Trading currency in the Forex market centres around the basic concepts of buying
and selling.
How Do You Profit In A Buy Trade In Forex Trading?

Let’s take the idea of buying first. Let’s suppose you bought something (a house, jew-
ellery, stock etc) and it went up in value. If you sold it at that point, you would have
made a profit. Your profit would be the difference between what you paid originally
and the greater value that the item is worth now.
Currency trading is the same way.
Let’s say you want to buy the AUDUSD currency pair. If the AUD goes up in value rela-
tive to the USD and then you sell it, you will have made a profit. A trader in this exam-
ple would be buying the AUD and selling the USD at the same time.
For example, if the AUDUSD pair was bought at 0.74975 and the pair moved up to
0.76466 at the time that the trade was closed/exited, the profit on the trade would
have been 149 pips*. (See the chart below…) 0.76466-0.74975=149 (disregard the fifth
digit)

* A pip is a number value. In the Forex market, the value of a currency is given in pips.
One pip equals
0.001, two pips equals 0.002, three pips equals 0.0003 and so on. One pip is the small-
est price change that an exchange rate can make. Most currencies are priced to four
numbers after the point.
So what is the value of the 149 pips in money terms? Well, this depends on the lot size.
What is a Lot in Forex?

In the past, spot forex was only traded in specific amounts called lots. The standard
size for a lot is 100,000 units. There are also mini, & micro lot sizes that are 10,000 &
1,000 units respectively.
Lot Number Of Units Profit Per Pip

Standard 1 100 000 Ten Dollars ($1490)
Mini 0.10 10 000 One Dollar ($149)
Micro 0.01 1 000 Ten Cents ($14,90)
If one micro lot of the AUD/USD is being traded, each pip would be worth $0.1, as op-
posed to $10 for a standard lot. We have calculated the profit in the table above using
the 149 pips from our example above.
Such a movement (of 149 pips) can take place within minutes during very volatile
periods!
So, depending on your lot, you could have made a profit of $14,90 to $1490 in an hour
or so!
Quite exciting stuff, right?
However, this is not always the case, sometimes such movement can take hours or
days to get or the currency pair can start falling before it reaches that number of pips.
This is just an illustrative example of the potential profits of forex.
What is Leverage in Forex?
You are probably wondering how a small investor can trade such large amounts of
money. Think of your broker as a bank who basically fronts you $100,000 to buy
currencies.
All the bank asks from you is that you give it $1,000 as a good faith deposit, which he will
hold for you but not necessarily keep.
This is how forex trading using leverage works.

The amount of leverage you use will depend on your broker and what you feel
comfortable with.
Typically, the broker will require a trade deposit, also known as “account margin” or
“initial margin.” Once you have deposited your money you will then be able to trade.
The broker will also specify how much they require per position (lot) traded.
For example, if the allowed leverage is 100:1 (or 1% of position required), and you wanted
to trade a position worth $100,000, but you only have $5,000 in your account, your
broker would set aside $1,000 as down payment, or the “margin,” and let you “borrow”
the rest. Of course, any losses or gains will be deducted or added to the remaining cash
balance in your account.
The minimum security (margin) for each lot will vary from broker to broker. In the
example above, the broker required a one per cent margin. This means that for every
$100,000 traded, the broker wants $1,000 as a deposit on the position.
Leverage is a double-edged sword, it can help you get higher profits but if your forecast
is wrong, you will incur heavier losses. Most brokers will give you the option to choose
your leverage when you sign up for a demo or real account. Generally, the lesser the
leverage ratio the safer it is and the smaller the position you can trade.
Let’s go back to our illustration.
Had the pair moved down to 0.74805 before the trade was closed, the loss on the trade
would have been 17 pips. The monetary value of this loss would have been determined
by the lost size as well.
This is how you profit from opening a buy position. It makes no difference which
currency pair you are trading. If the price of the currency you are buying goes up from
the time you bought it, you will have made a profit.
Here is another example using the AUD; In this case, we still want to buy the AUD but let’s
do this with the EURAUD currency pair. In this instance, we would sell the pair. We would
be selling the EUR and buying the AUD simultaneously. Should the AUD go up relative to
the EUR we would profit as we bought the AUD. (Remember you always buy or sell the
base currency. If you buy the base, you are selling the quote currency simultaneously
and vice versa)
In this example, if we sold the EURAUD pair at 1.2320 and the price moved down to 1.2250
when we closed the position, we would have made a profit of 70 pips. Had the pair
moved up instead and we closed out the position at 1.2360 we would have had a loss
of 40 pips on the trade.
How Do You Profit In A Sell Trade in Forex Trading?
Now let’s take a look at how a trader can make a profit by selling a currency pair. This
concept is a little trickier to understand than buying. It is based on the idea of selling
something that you borrowed as opposed to selling something that you own.

In the case of currency trading, when taking a sell position, you would borrow the cur-
rency in the pair that you were selling from your broker (this all takes place seamless-
ly within the trading station when the trade is executed) and if the price went down,
you would then sell it back to the broker at the lower price. The difference between
the price at which you borrowed it (the higher price) and the price at which you sold
it back to them (the lower price) would be your profit.
For example, let’s say a trader believes that the USD will go down relative to the JPY. In
this case, the trader would want to sell the USDJPY pair. They would be selling the USD
and buying the JPY at the same time. The trader would be borrowing the USD from
their broker when they execute the trade.
If the trade moved in their favour, the JPY would increase in value and the USD would
decrease. At the point where they closed out the trade, their profits from the JPY in-
creasing in value would be used to pay back the broker for the borrowed USD at the
now lower price. After paying back the broker, the remainder would be their profit on
the trade.
For example, let’s say the trader sold the USDJPY pair at 122.761. If the pair did in fact
move down and the trader closed/exited the position at 122.401, the profit on the trade
would be 136 pips.
In a nutshell, this how you can make a profit from selling something that you do not
own.
When you buy a pair, like in the first illustration, you would have gone ‘long’ on that pair.
When you sell a pair, you open a short position. So, remember this, buying a pair=going
long: selling a pair=going short. This is the technical jargon of the trade.

In wrapping up, if you go long on a currency pair and it moves up, that trade would
show a profit. If you open a short position on a currency pair and it moves down, that
trade would show a profit.
Simple, right? Not by a long shot!
Making the forecast on the movements of the pairs is by no means an easy task. By
now, we hope we have impressed it upon your mind that making accurate forecasts of
the currency movements is where the profit lies, doing wrong forecasts leads to losses.
So how do traders make these forecasts?
There are two broad ways of analysing exchange rate movements 1. Fundamental
analysis and 2. Technical analysis.
1.) Fundamental analysis
Fundamental analysis is the interpretation of statistical reports and economic

indicators. Things like changes in interest rates, employment reports, and the latest
inflation indicators all fall into the realm of fundamental analysis.
Forex traders must pay close attention to economic indicators which can have a direct
– and to some degree, predictable – effect on the value of a nation’s currency in the
forex market.
Given the impact these indicators can have on exchange rates, it is important to know
beforehand when they are due for release. It is also likely that exchange rate spreads
(we will look at spreads later) will widen during the time leading up to the release of an
important indicator and this could add considerably to the cost of your trade.

Therefore, you should regularly consult an economic calendar that lists each
indicators release date and time. You can find economic calendars on Central Bank
websites and also through most brokers.
2.) Technical analysis
In finance, technical analysis is a security analysis methodology for forecasting the

direction of prices through the study of past market data, primarily price and volume.
Like weather forecasting, technical analysis does not result in absolute predictions
about the future. Instead, technical analysis can help investors anticipate what is
“likely” to happen to prices over time. Technical analysis uses a wide variety of charts
that show price over time.
Technical analysis other tools like candle charts and technical indicators like MACD,
oscillators etc.

05
How Do You Start Forex Trading From Zimbabwe?
Forex trading is accessible to everyone with an internet connection. But just because
everyone can do it, does not mean that everyone should do it. Serious Forex traders
know that education, discipline, and strategy are essential elements of a profitable
trading career. If you start trading Forex without these skills, you may profit from a few
trades, but you will eventually lose.
If you prepare properly and you are ready to learn, Forex trading can be a great way
to create a steady income.
Before getting started you are going to need a device with a good internet connection
so you can access the trading platform. Zimbabwean mobile networks generally have
a network connection that is good enough for trading.
On top of that you are going to need the following to start trading:
1. A Forex Broker that gives you access to the markets

2. A way of depositing & withdrawing real funds to and from your trading account
3. A trading strategy that you will use to forecast price movements
How Do You Choose A Forex Broker From Zimbabwe?
This is a challenge because of a number of factors. For starters, some brokers do not
allow Zimbabweans to open accounts with them due to sanctions.
Other brokers accept Zimbabwean accounts but their funding methods like Skrill,
Neteller, Credit Cards & Bank Transfers are not easily accessible for most Zimbabwe-
ans.
Other brokers may not be legit and may end up scamming you. Regulated brokers are
safer and much more trustworthy.
The trick is to find a broker that accepts Zimbabweans, has funding and deposit meth-
ods that are easily accessible for the local traders.
Below we present three brokers that satisfy both requirements and you can go ahead
and open demo accounts with these brokers.
We have only selected the brokers that are regulated (with at least 2 regulators in-
cluding FSCA, FCA, ASIC, CySEC), have competitive trading fees, and transparent re-
cord for fair dealing practice in the past.
1. Deriv
This broker has been in existence since 2000 and is trusted by more than one million
traders worldwide. On top of offering currency pairs for trading, Deriv is also the only
broker that offers the highly popular synthetic indices. These assets are traded by
many Zimbabweans and include volatility, boom, crash, step and jump indices.
The major advantage of this broker is that they have local payment agents. These
agents can help you move funds in and out of your account using local payment
methods like EcoCash, Zipit, Mukuru and US$ Cash. This makes it very convenient for
local traders.
Deriv also has a platform called Dp2p which allows traders to exchange Deriv credits
for local payment methods. A trader who wants to withdraw their profits on Deriv can
transfer their balance to another trader who wants to fund their account in exchange
for a local payment e.g EcoCash.
You can also deposit and withdraw even if you have not verified your account with
Deriv. The minimum deposit with this broker is only US$5 but you can deposit as little
as $1 using the Dp2p platform.
It is for these reasons that Deriv is the most popular broker amongst local Zimbabwe-
an traders.
Opening a demo account on Deriv is free and you can open yours by clicking here or
by typing www.swagforex.co.zw/go/deriv in your address bar.
For more information on Deriv you can read these articles on our website:
How To Easily Fund Your Forex Trading Account Using Ecocash & Other Local Payment
Methods
How To Easily Register As A Deriv Payment Agent
How To Trade Without Verifying Your Account: Quick & Easy Ways For Zimbabweans
How Does DP2P Work For Zimbabweans?
2. JustForex
JustForex is another broker that is getting more popular amongst Zimbabwean online
forex traders. The broker has fewer payment agents but it is slowly getting momen-
tum. The broker has low trading fees and this is very attractive for local traders.
JustForex payment agents also allow you to fund your forex trading account using
EcoCash, Zipit, Mukuru and Cash. To enjoy the payment agent services on JustForex
you can open your account here and you will automatically be linked with a local
payment agent
3. SuperForex
Superforex is also another broker offering local payment agent services. You can
open a SuperForex account here.
Trading Strategies
A Forex Trading Strategy is a set of analyses that a forex trader uses to determine
whether to buy or sell a currency pair at any given time. Forex trading strategies can
be based on technical analysis, chart analysis, or fundamental, news-based events.
There are a lot of forex trading strategies out there. They include:
Price Action Trading
This is the study of historical changes in currency prices to predict which way the
price is going to move next. If you love studying charts and looking for patterns, then
price action trading is for you. It relies almost entirely on technical analysis. You can
learn about Price Action trading here.
Swing Trading
Swing trading is a longer-term trading style that requires patience to hold your trades
for several days at a time.
In contrast to swing traders, day traders usually are in and out of the market in one
day and trend traders often hold positions for several months. You can learn more
about swing trading here.
Scalping
Scalping is when a trader opens and closes many trades in a day. The goal is to make
lots of small profits. Technical analysis is an important factor with scalping, but the
main problem is the time investment required. Scalpers can spend the whole day
glued to their trading monitor.

06
Risks Of Trading Forex
Trading Forex and CFDs carry a significant risk including losing all the money in your
trading account over a short period. You should consider whether you understand
how CFDs work and whether you can afford the high risk of losing your money. The
principal risks of trading are:
Risk 1 – Volatility: The Forex market is extremely volatile at times. While this volatility
presents opportunities for making a profit, it also can mean that the market can go
against you in a very short space of time and you can make a big loss
Risk 2 – Unpredictability: The Forex market is not something you can predict with 100%
accuracy. There are just too many factors and actors on the market for it to be fully
predictable. Even the most profitable traders have losing trades time and again.
Traders need to set a win-loss target ratio where you account for some losses and
use a strategy to minimise them and be profitable in the long run
Risk 3 – Leverage: CFD trading requires using leverage. Leverage is a tool used in
trading to amplify your profits, but it also amplifies your losses which are automati-
cally deducted from your trading account. Your account balance can be wiped out
with a single bad trade.
Risk 4 – Interest: In some cases, interest will be charged on your trades. For example,
interest can be charged when you carry trades overnight and your broker will take
funds from your account to pay this fee.
Risk 5- Emotions & Psychology: Trading with real money comes with a whole range of
emotions that can mess up your thinking and lead you to bad decisions which cost
you.
Risk 6- Rushing to trade live funds: Most beginner traders think that it is easy to make
money in the forex markets and they rush to trade real funds before understanding
how the markets work. This leads them to losses that could have been avoided if they
had taken the time needed to learn
Risk 7- Forex Scams: There are a lot of scammers out there who are ready to pounce
on naive people in the name of forex. Below are some of the scams.

Online Forex Trading Scams Targetting Zimbabweans
1. Account Management
This is where someone approaches you and offers to trade on your account and you
share profits. These people will usually show you screenshots like the one below.

The goal is to make you confident in their trading skills so that you can fund your ac-
count and then give the login details so that they can trade on your behalf.
You invest your capital and they invest their skill and then you share profits. Most
newbies like this kind of arrangement because it takes the pressure of learning and
analysing the market off of them.
The danger with this kind of arrangement is that these account managers may not be
as good as they claim and they may just want to experiment with your money without
any financial risk on their part.
If they get lucky and their trades are successful then you share the profits and they
win. If they lose all the money in the account then it’s your loss and they simply disap-
pear.
You will come across a lot of these account managers on social media especially
Facebook, WhatsApp and Telegram. They will mostly approach you as you join forex
trading groups.
We would advise you to be very cautious with such arrangements. If you are ever go-
ing to try an account management arrangement make sure that you use money that
you are ready to lose. It will be more like a gamble at best.
2. Forex Pool Investment Scams In Zimbabwe
In this type of scam the ‘fund managers’ will ask you to invest with them and get a
fixed rate of return after a certain period. They will promise you rather incredible re-
turns eg 100% in 5 days or something like that.
They will claim that they are expert traders and they will spin your money through bi-
nary options, forex and bitcoin trading.
They may give you your returns when you initially invest small amounts with them as
a way of making you gain confidence with them. They will then disappear without a
trace after you invest larger amounts with them.
They take advantage of the fact that most people do not know how online forex and
bitcoin trading work. Such people are easy to deceive and scam.
A lot of people have fallen prey to this kind of forex trading scam in Zimbabwe and
you should be on the lookout. Never even attempt this kind of arrangement. Once
someone approaches you proposing something like this you should block them right
away.
3. Forex Trading Lessons Scams In Zimbabwe
In this instance, unsuspecting but eager forex newbies are asked to pay for forex
lessons so that they can get better at trading. In most cases, however, the education
that is being sold is found freely online and the scammers are just smart enough to
package it as theirs.

For example, there is this free Price Action Trading Course that may so-called forex
mentors want to teach others and charge a fee.
At the end of the forex trading course, you will not be any better than you would be if
you had searched for the information for yourself online for free.
Be very careful and sceptical before enrolling with any forex mentor online as a lot of
people have made more money from teaching forex trading than from the forex mar-
kets themselves.
4. Forex Signals Scams In Zimbabwe
Here some forex ‘gurus’ offer a service whereby they do the market analysis for you
and they simply tell you to buy or sell a certain pair. This is another attractive ar-
rangement for newbies in forex trading as it also takes the hard work from them and
they can get to profit by simply following the signals.
A challenge with this arrangement is that the signals may be ‘hit-or-miss’ and in the
end, you may find out that your net position is negative. By that time you would have
already paid for the signals and it will be a double loss on your side.
A good signal service should have a trial period of ideally two weeks where you get to
see if the signals are legit and profitable.
If your signal provider simply asks you to subscribe without a trial period you must be
on the alert.
5. Indicators, Expert Advisors (EA’s) & Robots Forex Scams
Indicators, EA’s & Robots are supposed to make trading easy for you by either telling
you when to take trades or taking the trades for you.
In this type of scam people will try to sell you indicators or robots that either do not
work or are found freely on the internet. Some of the indicators, EA’s & Robots may
even be found freely online and will be useless as well.The seller will want to take ad-
vantage of naive traders and rip them off.
6. Skrill Exchange Scams
This type of scam was popular before Skrill closed its accounts for Zimbabweans.
However, variances of this scam still exist.
This type of scam happens when you want to fund your forex trading account but you
only have local money Eg EcoCash & Zipit. You then look for someone who has funds
in their e-wallet (eg PerfectMoney, WebMoney, AirTm or even bitcoin) who wants
local money.You then send the local money but they don’t hold their end of the deal
and they block you.
Fortunately, scams of this type have been declining since Deriv introduced local pay-
ment agents and the Deriv-peer-to-peer (Dp2p) platform.

07
Frequently Asked Questions On Forex Trading In
Zimbabwe
How can I open a forex trading account from Zimbabwe?

You first need to choose a broker that accepts local traders like Deriv. You then open a
demo account. Afterwards, you can open a real account and start trading real mon-
ey. You can get step-by-step account opening instructions here.
How much do I need to start trading forex in Zimbabwe?

You can open your forex trading account from Zimbabwe for as little as US$5 de-
pending on your broker. So, in essence, choosing the amount you want to start trad-
ing with depends on what you can afford and the risk you are willing to take. Remem-
ber you can lose all your invested funds in the forex market.
Risk management is a very important part of Forex trading and most serious traders
agree that you should never risk more than 3% of your balance on a trade. If you have
a starting balance of 100 USD, this means that you should never risk more than 3 USD
on a trade.
With an account balance of 1000 USD must not risk more than US$30 per trade. As a
beginner, you will probably not afford to start with a significant amount and that is ok.
However, you should know that the smaller your account is, the smaller your potential
profits and the longer you need to trade to get meaningful profits.
Beginner traders can start with a minimum account balance between 200 – 500 USD.
This allows traders to make small profits, while still maintaining a sensible approach
to risk and growing their knowledge of forex trading.
Is Online Forex trading legal in ZImbabwe?

Yes, online forex trading from Zimbabwe is legal. However, it needs to be done through
a reputable, well-regulated broker.
Is forex trading a scam?

No, forex trading is not a scam. The Forex market is a legitimate trading market where
the world’s currencies are traded. It is not a scam in itself. However, there are scams
surrounding forex that sometimes lead people into thinking that forex trading is a
scam.

What is the best time to trade forex in Zimbabwe?

The Forex market is open 24 hours a day, Monday-Friday, but the best time to trade
Forex is when the world’s major stock markets are most active. The time when all the
major financial centres of the world are open is from about 10 am to 3 pm Zimbabwe-
an time. You can, however, still trade outside of these times but the volatility is usually
lower.
Which one is the most common trading platform in Zimbabwe?

Deriv MT5 (DMT5) is the trading platform used by the most popular broker in Zimba-
bwe, Deriv. As a result, it is the most popular trading platform in Zimbabwe. It is more
popular than MT4.
Which one is the most popular broker in Zimbabwe?

Deriv is the most popular broker in Zimbabwe. This is largely due to the broker’s ex-
clusive synthetic indices which are a favourite trading asset of Zimbabwean traders.
Other popular brokers in Zimbabwe include Hotforex, XM, JustForex and Superforex.
Can I fund my forex trading account from Zimbabwe using local pay-
ment methods like EcoCash, Zipit. Mukuru and Cash?
Yes, you can do so via local payment agents. At this point in time, only three brokers
can allow you to do that and they are Deriv, JustForex and Superforex.
Can you get rich by trading forex in Zimbabwe?

It is possible to get rich by trading forex from Zimbabwe. However, this is not easy and
there are a lot of factors that come into play. For example, you need to have a firm
grasp of the market and have a substantial deposit e.g of US$100 000 to be able to
get significant returns from the forex market. You also need to be a disciplined trader
who practices money management and has mastered solid trading psychology. All
this is not easy and it takes a very long time to master.
Conclusion
We hope we have managed to give you a general appreciation of how forex trading
works. If you have read to this point it probably means you are interested in forex and
would want to explore it further.
We would advise you to start by opening a demo account here and playing around
with it. Don’t rush to trade live funds. Rather you should spend more time learning
about the markets.
Networking with fellow traders on social media is also a great way to gain more
knowledge.
We also suggest that you regularly visit our website www.swagforex.co.zw where we
put up regular updates.
You can also email us at trade@swagforex.co.zw

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Introduction to Forex Trading: A Zimbabwean Perspective

Introduction to Forex Trading :

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Limit of liability/disclaimer of warranty:

No warranty may be created or extended by sales or promotional materials. The

If professional assistance is required, the services of a competent profession-

Nothing contained in this publication is intended to constitute legal, tax, securi-

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Foreign Exchange market (forex or FX for What Is Forex Trading?

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1.) The forex market is open 24hrs/day,five days a week.

2.) You can use leverage in forex trading

We will discuss this later.

3.) There is high liquidity in the forex market

Because the forex market is so enormous, it is also extremely liquid. This is an

4.) There are low barriers to entry in forex trading

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6.) You can practice forex trading using virtual money

7.) You can trade forex from anywhere in the world

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Which are the most traded currency pairs?

The following are the most traded pairs

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Reading a Forex Quote

Meaning you now need more Rands to buy one dollar.

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Why do exchange rates fluctuate?

Demand for a currency is created by tourism, international trade, mergers and

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Where is the money?

How Do You Profit In A Buy Trade In Forex Trading?

Currency trading is the same way.

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What is a Lot in Forex?

Lot Number Of Units Profit Per Pip

Quite exciting stuff, right?

This is just an illustrative example of the potential profits of forex.

What is Leverage in Forex?

This is how forex trading using leverage works.

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Let’s go back to our illustration.

How Do You Profit In A Sell Trade in Forex Trading?

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Simple, right? Not by a long shot!

So how do traders make these forecasts?

1.) Fundamental analysis

Fundamental analysis is the interpretation of statistical reports and economic

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2.) Technical analysis

In finance, technical analysis is a security analysis methodology for forecasting the

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1. A Forex Broker that gives you access to the markets

How Do You Choose A Forex Broker From Zimbabwe?

How To Easily Register As A Deriv Payment Agent

How Does DP2P Work For Zimbabweans?

Price Action Trading

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