Recently, I invited an expert to teach members of the iKrate community forex trading for 6 days. In this period, we went through practical training to understand the basics of forex trading and how to begin our journey in forex trading.
I realized that I basically had no idea of forex trading even though I had heard it several times and been told by friends to start trading. It was therefore an eye-opener and a surprise when I finally got the meaning of forex trading and realized that this is actually something I had done previously yet didn’t know. In fact, my parents have been engaging in it for as long as I can remember (but not necessarily in the way that we are going to learn how to do it in this course).
My guess is, you might have even engaged in forex trading before except that you aren’t aware that it is forex trading.
Oh yes! Give me a moment to explain how and you may realize that this isn’t something new.
What is forex trading?
8 years ago, I was working with my mother after she traveled and I was in charge of almost everything that had to do with her business.
One prominent commodity which gave us much profit was groundnut paste. Yet, we had to import it from Cote d’Ivoire because we didn’t have time on our hands to make it by ourselves and the imported ones were of good quality and at an affordable price.
For that matter, anytime we wanted to place an order for groundnut paste we had to exchange the Ghanaian cedis which is our primary currency to the CFA, the currency for Ivorians.
As you may know, there is a certain exchange rate that is applied to calculate the equivalent of the money we had and that also determines how much value we could get in Ivory Coast.
On one occasion, when I went to exchange the money, I got more CFA than was required for the purchase. This was because the CFA had fallen against the Ghanaian Cedis.
Thus, I had to keep the rest of the CFA. Even though I could have sold the CFA back to get my money back in Ghana Cedis, I decided to keep it based on the fact that some few days ago it was even difficult for me to get close to that rate.
Also, I had an inner conviction that the CFA will rise soon and we will be buying it at a very high price afterward.
I kept the money and soon forgot about it. After some time, we were struggling to change other monies because the rate had gone so high that it was affecting our market.
Let me make this more practical for you. With the first exchange that I talked about, I was changing a thousand West African CFA francs for about 3.5 Ghanaian cedis.
As at the next time (as mentioned earlier), we were now exchanging a 1000 CFA for about 4.5ghc. This meant that if I went out to sell the CFA that I had accumulated, I was going to make about 1.0ghc per CFA.
I was tempted to exchange the money the moment I remembered I had it. My mother had come back, thus, I was no longer in charge of the business. I informed her and she advised me to hold onto it because the CFA keeps climbing and it’s going to go higher than that at a time.
I waited patiently and not long after that, we were exchanging 1000 CFA for about 5.7ghc. I was still reluctant to sell and I managed to convince myself that it would go high again and that I would sell the moment it hit 6.0ghc.
It began to go up past the 5.7ghc so I became excited and pretty soon it even went past 6.0ghc. I still didn’t want to sell because the market was going in my favor.
It was looking favourable until one day I came back home and my mother informed me that the Ghana Cedis had dropped against the CFA. I realized it had come below the 5.70ghc and was threatening to come way lower than that.
I had to sell what I was holding if I actually wanted to make gains from my money was the advice my mother gave me. I went on to sell it to my mother herself because she needed some of the CFA to purchase goods from Cote d’Ivoire.
I exchanged it at a 1000 CFA for 5.60ghc. This sounded interesting to me. I had made a profit of 2.10ghc on each 1000 CFA I held. I don’t remember the exact amount of CFA that I was holding but it was quite substantial and I made a huge profit.
To satisfy my curiosity I just checked the exchange rate as of July 24th, 2021, as I was writing this and it was hovering around 1000 CFA for about 10.70 Ghc. If I had held on to the money until now, can you estimate how much profit I would have gotten?
I hope you understand all that I have narrated to you? Basically, that is all what forex trading is about.
Forex Trading Definition
Forex trading involves you trading in various currency pairs as was narrated above. You either buy or sell a particular currency when the market is favorable and you take an opposite action when the market reverses.
So for instance I bought the CFA when the rate was low and sold it when it went up. That is how you make money from forex trading.
If it happens that the market does not go in the direction that you predicted then you are going to make a loss. An example will be if after my first exchange, the value of the CFA dropped way less again, I would have lost the value I invested into it.
Forex trading, therefore, involves you understanding how the market works and being able to predict with a certain high level of certainty how the market will go, and placing the appropriate order.
You can actually deal with any currency pair of your choice.
How can I engage in forex trading now?
However, unlike how I had to go and buy the currency physically and store it by myself which is another risk (what if someone had stolen the money I kept?), this form of trading has been digitalized.
There are a number of platforms that you can trade on and we will look at them in detail subsequently.
You will sign up with any of such platforms known as brokers then make a deposit of a certain amount with which you want to trade with. You then go ahead to place an order (whether buy or sell) for a particular currency pair.
You are allowed to close the trade anytime you like whether it is going in your favor or not. After closing the trade, you can withdraw your money especially if you made a profit.
Forex trading is actually that simple and almost anybody at all can engage in it. For a beginner, you may need the guidance of an expert to appreciate how and when you should place a trade in order to maximize your profit.
I was very fortunate to be part of this one week training. Prior to this one-week training, I didn’t know what it was and didn’t have the confidence to venture into it but as you can see now, it is a different story altogether.
Thanks to Mr. Isaac Kabenla Ackah for all the insights he gave us throughout the training. I spoke to him and he agreed to make the recordings of the training session available to you at a very affordable price.
For all the six training sessions he has placed them on offer for just 100ghc which is less than $17 as at this moment.
One more reason why I encourage you to get these training sessions is that in these sessions he took people like me who have no knowledge in trading and taught us and made us practice and shared results live in the training. So, you won’t only be learning from him but also from the practices that we also did and especially the mistakes we made that he had to correct us on.
More importantly, after signing up, he is ready to send you some signals that will help you make some profits in your early days of trading. I will continue this piece but go ahead and place your order now and launch your career or side hustle in a high-paying digital skill like forex trading.
Catch you in the next episode.