2. HOW FOREX TRADING ACTUALLY WORKS

In Forex trading, currencies are traded in pairs. This is because when you buy one currency, you are always selling another at the same time.

Example of a currency pair:

USD/ZAR = United States Dollar / South African Rand

In this pair:

USD is the base currency

ZAR is the quote currency

The price shows how much of the quote currency (ZAR) you need to buy 1 unit of the base currency (USD).

If USD/ZAR = 18.50

It means 1 US Dollar = 18.50 Rand

WHAT DOES BUY (LONG) AND SELL (SHORT) MEAN?

BUY (also called going long):

You click BUY when you believe the base currency will go UP in value.

Example:

You BUY USD/ZAR at 18.50

If the price goes up to 19.00 → You make a profit

If the price drops to 18.00 → You make a loss

SELL (also called going short):

You click SELL when you believe the base currency will go DOWN in value.

Example:

You SELL USD/ZAR at 18.50

If the price drops to 18.00 → You make a profit

If the price rises to 19.00 → You make a loss

HOW PROFIT AND LOSS HAPPENS

You make money when the price moves in the direction you predicted.

You lose money when the price moves against your prediction.

The amount you make or lose depends on:

• How far the price moves

• The lot size you used

• The spread (broker fee)

WHAT IS A “PIP”?

A pip is the smallest price movement a currency pair can make.

Example:

If USD/ZAR moves from 18.50 to 18.51

That 0.01 movement is called a pip (or a point)

More pips in your direction = more profit

More pips against you = more loss

WHAT IS “SPREAD”?

The spread is the difference between the BUY price and the SELL price.

This is the small fee your broker charges for each trade you open.

Example:

Buy price: 18.52

Sell price: 18.50

Spread = 2 pips

When you enter a trade, you start slightly in loss because of the spread. Once the price moves in your direction, you enter profit.

WHAT IS “LOT SIZE”?

Lot size is the size of your trade. It controls how big your profit or loss will be.

Here is a simple guide:

Lot Size = Risk Level

0.01 lot = Small risk (best for beginners)

0.10 lot = Medium risk

1.00 lot = Big risk (not for beginners)

As a beginner, it is highly recommended to start with 0.01 lot to protect your capital while you learn.

In the next lesson, you will learn how to read Forex charts and understand price movement.

3. What You Need To Start Trading (Beginner Setup)

Starting Forex trading does not require a lot of expensive equipment. It is actually very simple and affordable, especially for beginners in South Africa.

Here is what you need:

1. A Smartphone or Laptop + Internet

You don’t need a fancy computer to trade Forex.

All you need is:

• A smartphone (Android or iPhone) or a laptop

• Stable internet connection

Most traders in South Africa use their phones to trade, and it works perfectly.

2. A Trading App (MT4 or MT5)

To place trades, you need a trading platform.

The two most popular trading apps are:

• MetaTrader 4 (MT4)

• MetaTrader 5 (MT5)

These apps allow you to:

• See live charts

• Place Buy & Sell trades

• Set Stop Loss and Take Profit

• Analyze the market

They are FREE to download on Android, iPhone, and laptop.

3. A Trading Account

You need a trading account to connect to the market.

There are two types:

• Demo account – For practice (fake money)

• Real account – For real trading (your money)

As a beginner, you should ALWAYS start with a demo account.

Once you are confident and consistent, you can then open a real account.

4. A Broker (Very Important)

A broker is a company that connects you to the Forex market.

They provide:

• Your trading account

• Your login details

• The trading platform

• Access to the market

Examples of popular brokers in South Africa include companies like:
Exness, HFM, FXTM, etc.

Choosing a good, trusted broker is very important.

5. Basic Knowledge

Before you trade, you must understand the basics such as:

• Buy and Sell

• What a pip is

• Lot size

• Risk management

Never trade just because someone told you to.
Trade because YOU understand what you are doing.

6. Small Capital to Start

One of the best things about Forex is that you can start with a small amount of money.

In South Africa, you can open a trading account with as little as:

✅ R100 – R500 (depending on the broker)

This makes Forex accessible to almost everyone.

But remember:
Small capital means small risk and slow growth.
This is the safest way to start.

IMPORTANT REMINDER

You don’t need a lot of money to start.
You need:
✔ Knowledge
✔ Discipline
✔ Patience
✔ Practice

Start small, learn properly, and grow with time.

Next Lesson:
Demo vs Real Account – What’s The Difference?

4. Demo vs Real Account

This is one of the MOST IMPORTANT lessons for beginners.

Many people lose money in Forex because they rush into a real account without practice. Don’t make that mistake.

1. What is a Demo Account?

A demo account is a practice trading account that uses FAKE money, but shows REAL market prices.

This means:

• The charts are real

• The price movements are real

• The only difference is: the money is not real

You can trade, test strategies, and make mistakes without losing your own money.

This is the safest place for beginners to start.

2. Why beginners MUST start with a demo

A demo account helps you to:

• Learn how the platform works

• Understand how price moves

• Practice Buy and Sell

• Control emotions (fear and greed)

• Test strategies without stress

If you cannot make profit on a demo account,
you will NOT make profit on a real one.

Demo first = Protection + Experience + Confidence.

3. What is a Real Account?

A real account is when you trade using your OWN money.

Everything becomes real:

• Real profit

• Real losses

• Real emotions

This is where most beginners fail, because emotions take over.

That is why you should only move to a real account when:

• You understand risk

• You have a strategy

• You are consistent on demo

4. Main Differences: Demo vs Real

Demo Account:

• Fake money

• No real risk

• No real emotions

• Best for learning & practice

Real Account:

• Real money

• Real risk

• Strong emotions involved

• For experienced & disciplined traders

5. How long should you use a Demo?

I strongly recommend:

✅ Minimum: 30 days
✅ Best: 60 – 90 days

During this time, your goal is NOT to get rich.
Your goal is to:

• Be consistent

• Control your emotions

• Follow rules

• Grow slowly

Once you can make profit for at least 2–3 weeks in a row on demo,
then you can start thinking about a real account with a SMALL amount.

IMPORTANT MESSAGE

A demo account is not a toy.
Treat it like real money.
Respect it.

This is what builds:
✔ Trust in yourself
✔ Discipline
✔ Responsibility
✔ Long-term success

Next Lesson:
Risk Management – How to Protect Your Money

5. Trading Sessions (Simple Version)

The Forex market is open 24 hours a day, 5 days a week.
But it does not move the same all the time.

Different countries open and close at different times.
These are called trading sessions.

The 3 main trading sessions are:

1. Tokyo Session (Asian Session)

This session opens when Asia starts trading.

It includes countries like:

• Japan

• China

• Australia

During this session:

• The market is usually slower

• Movement is smaller

• Best for experienced or patient traders

It is less volatile compared to London and New York.

2. London Session (European Session) – MOST ACTIVE

This is the most important trading session in the world.

It includes:

• UK

• Germany

• Other European countries

During the London session:

• The market is VERY active

• Price moves faster

• More trading opportunities

• High volume

Most big institutions and banks trade during this time.

This is one of the BEST sessions for Forex and Gold trading.

3. New York Session (US Session)

This session opens when the United States starts trading.

It includes:

• United States

• Canada

During the New York session:

• The market is very volatile

• News releases often happen

• Strong price movement

• Good trading opportunities

When London and New York overlap, the market is usually at its most powerful.

4. Best Trading Time for South Africans 🇿🇦

For South Africans, the BEST time to trade is usually between:

✅ 9:00 AM and 6:00 PM (South African time)

This is because:

• The London session is active

• The New York session overlaps later

• The market has strong movement

This time window gives you:
✔ Better price movement
✔ More opportunities
✔ Faster setups
✔ Better profits (when done correctly)

FINAL TIP

You don’t need to trade all day.

Choose 1–2 hours inside the active session,
focus, trade, and then stop.

This protects you from overtrading and losses.

Next Lesson:
Risk Management – How To Protect Your Trading Account

6. Basic Trading Strategies for Beginners

As a beginner in Forex, your job is NOT to use complicated strategies.

Your main job is to:

• Understand direction

• Identify simple areas on the chart

• Wait for good opportunities

The more simple your strategy is, the better your results will be.

Let’s break it down:

1. Support & Resistance

Support = A level where price usually STOPS falling and goes UP

Resistance = A level where price usually STOPS rising and goes DOWN

Think of it like this:

• Support = Floor

• Resistance = Ceiling

When price reaches SUPPORT → Look for BUY
When price reaches RESISTANCE → Look for SELL

These levels are powerful because many traders watch them and trade from them.

This is one of the most important concepts in Forex trading.

2. Trend Trading (Uptrend & Downtrend)

A trend shows the general direction of the market.

There are only 3 types of trends:

Uptrend → Price is making higher highs and higher lows
Downtrend → Price is making lower highs and lower lows
Sideways → Price is moving between support and resistance

As a beginner, your job is very simple:

In an UP trend → Look for BUY opportunities
In a DOWN trend → Look for SELL opportunities

Never fight the trend.
The trend is your friend.

3. Break & Retest (Simple Explanation)

A break and retest happens when:

• Price BREAKS through support or resistance

• Then it comes back and RETESTS that level

• Then it continues in the same direction

Example:

Price breaks above resistance
It comes back and touches that level
Then it goes up again

This is one of the safest and best entry strategies for beginners.

Instead of chasing the market, you wait for:
✅ Break
✅ Retest
✅ Confirmation
✅ Then enter

This protects you from bad trades and fake signals.

IMPORTANT FOR BEGINNERS

The goal of a beginner trader is NOT to trade every day.

The real goal is to:
✔ Understand direction
✔ Be patient
✔ Wait for clean setups
✔ Take only GOOD trades

One good trade is better than ten bad ones.

Don’t overcomplicate it.
Simple strategies work.

Next Lesson:
Risk Management – How To Protect Your Trading Account

7. Risk Management (VERY Important)

This is one of the most important lessons in Forex trading.

Most beginner traders fail not because of strategy, but because of poor risk management.

You can have the best strategy in the world —
but without proper risk control, you will still lose your money.

Here is what you must understand:

1. Never Risk More Than 1–2% Per Trade

This is a golden rule in trading.

It means:

• If you have R1,000 in your account

• You should only risk R10 – R20 per trade

This protects your account from big losses and gives you time to learn, improve, and grow consistently.

Small risk = Long-term survival.

2. Always Use a Stop Loss

A Stop Loss is a level that automatically closes your trade if the market goes against you.

It is your protection.

Without a Stop Loss:

• One trade can destroy your entire account

With a Stop Loss:

• Your loss is controlled

• You stay safe

• You stay in the game

Never enter a trade without a Stop Loss.

3. Don’t Trade With Rent or Food Money

Trading should NEVER be done with:

• Rent money

• Food money

• Transport money

• Gambling money

Only trade with money you can afford to lose.

When you trade with “scared money”, you:

• Panic easily

• Make bad decisions

• Overtrade

• Break your rules

This is how accounts get blown.

4. Control Your Emotions

Two emotions destroy traders:

• Fear

• Greed

Fear makes you close trades too early.
Greed makes you hold trades too long.

Risk management + discipline + calm mindset = success.

You must trade like a robot:
Simple
Calm
Controlled

FINAL MESSAGE

Protecting your money is more important than making money.

If you protect your account,
profits will come with time.

If you chase profits,
you will lose everything.

Master risk first.
Money will follow.

Next Lesson:
Common Beginner Mistakes In Forex Trading

8. Common Beginner Mistakes

This lesson is very important for beginners.

Most people don’t lose money because Forex is a scam.
They lose money because they make the SAME mistakes again and again.

If you can avoid these mistakes, you are already ahead of 80% of traders.

Here are the most common beginner mistakes:

1. Overtrading

Overtrading is when you take too many trades in one day.

Some beginners:

• Trade every small move

• Open many positions at once

• Try to “force” the market

This leads to:

• Confusion

• Big losses

• Emotional trading

Remember:
More trades does NOT mean more money.
It usually means more losses.

2. Revenge Trading

Revenge trading happens after a loss.

You lose a trade, then you feel angry and want to:

• Make your money back fast

• Enter another trade without thinking

• Use a bigger lot size

This is very dangerous.

Revenge trading is one of the FASTEST ways to blow an account.

After a loss, the best thing to do is:
✅ Take a break
✅ Calm down
✅ Come back with a clear mind

3. Using Big Lot Size

Many beginners think:

“Big lot = Big profit”

But they forget:
Big lot = Big loss too

If the market moves slightly against you, your account can be wiped out.

Small lot size = Safety + Long-term survival

As a beginner, always trade SMALL lots.

4. Trusting Fake Signals or Scammers

Many beginners fall for:

• “Get rich quick” signals

• Fake mentors

• Telegram groups promising 100% win rate

• Instagram traders showing fake profits

Real trading is not easy.
There is NO 100% winning system.

If it sounds too good to be true…
It is probably a lie.

Learn to trade for YOURSELF.

5. Trading When Bored or Emotional

Some people trade because they are:

• Bored

• Stressed

• Angry

• Sad

• Excited

Trading with emotions is like driving drunk.

If you are not calm and focused,
do NOT trade.

6. Not Using a Trading Plan

Without a plan, you will:

• Enter randomly

• Exit randomly

• Lose consistency

• Lose money

Even a simple plan is better than NO plan.

IMPORTANT MESSAGE

Mistakes are part of learning.

But repeating the same mistakes is a choice.

The best traders are not the smartest,
they are the most DISCIPLINED.

Learn from mistakes –
Don’t become one.

Next Lesson:
A Simple Daily Trading Routine For Beginners

9. Simple Step-by-Step Example Trade

Now that you understand the basics, let’s walk through a VERY simple example of how a beginner would take a trade.

This is for learning purposes only.

We will use: XAUUSD (Gold) as an example.

Step 1: I Open MT4 (MetaTrader 4)

First, I open my MetaTrader 4 app on my phone or laptop.

I log in to my trading account and make sure I am connected to the internet.

Step 2: I Choose XAUUSD (Gold)

In the “Quotes” or “Symbols” section, I find and select:

XAUUSD (Gold)

Gold is a popular pair because it moves well and gives good opportunities.

Step 3: I Mark Support

I look at the chart and find a support level.

Support is an area where price has stopped and gone up before.

I draw a horizontal line where price has touched and rejected multiple times.

This tells me:
“Price may go up from here again.”

Step 4: I Wait for Confirmation

I DO NOT enter the trade immediately.

I wait for:

• A strong candle closing at support

• A rejection (long wick / tail)

• Clear sign that price wants to go up

Patience is VERY important here.

Step 5: I Place the Trade (Buy)

Once I see confirmation:

I click:
✅ BUY

I use a small lot size suitable for my account.

Step 6: I Set Stop Loss & Take Profit

This is VERY important.

✅ Stop Loss: I put it just below the support line
✅ Take Profit: I put it at the next resistance area

This gives me:

• Controlled risk

• Clear target

• Peace of mind

Now the trade is safe and planned.

Step 7: I Let The Trade Play Out

Once everything is set:

I DO NOT touch the trade
I DO NOT panic
I DO NOT add more positions

I wait patiently for either:

• Take Profit to hit ✅
  OR

• Stop Loss to hit ❌

This is called discipline.

IMPORTANT MESSAGE FOR BEGINNERS

Trading is NOT about clicking fast.

It is about:
✔ Waiting
✔ Planning
✔ Executing
✔ Protecting capital

One well-planned trade is worth more than 10 random trades.

This is how professionals trade.

Next Lesson:
How To Create A Simple Trading Plan (For Beginners)

10. Beginner FAQ – Frequently Asked Questions

This section answers the most common questions beginners in South Africa ask about Forex trading.

These answers are simple, honest, and beginner-friendly.

1. How much money do I need to start Forex trading?

In South Africa, you can start trading Forex with as little as R100 – R500, depending on the broker.

However, just because you CAN start with a small amount does not mean you will make big profits immediately.

As a beginner, your goal is NOT to get rich fast.
Your goal is to learn, practice, and protect your money.

The best starting point is a Demo Account, where you trade with fake money and learn without risk.

2. Is Forex trading legal in South Africa?

✅ Yes, Forex trading is legal in South Africa.

Many South Africans trade Forex every day using international and local brokers.

However, you must avoid:

• Scammers

• Fake “get rich quick” schemes

• Unregulated brokers

Always choose a trusted and regulated broker.

Trading is legal — but you must be smart and careful.

3. Can I trade on my phone?

✅ Yes, 100%.

You can trade Forex on:

• Android phones

• iPhones

• Tablets

• Laptops

• Desktop computers

Most beginners in South Africa use their smartphones, and that is perfectly fine.

You just need:

• A good internet connection

• The MT4 or MT5 app

• A trading account with a broker

4. What broker is best for beginners?

The best broker for beginners is one that has:

✅ Low minimum deposit
✅ Easy withdrawal in South Africa
✅ MT4 or MT5 platform
✅ Good reputation
✅ Customer support

As a beginner, choose a simple and trusted broker, not one that promises to make you rich.

Your knowledge is more important than the broker.

5. How long before I become profitable?

This depends on the person.

For most people, it can take:

• 3 – 6 months to understand the basics

• 6 – 12 months to become consistent

• 1+ year to become confident and profitable

Forex is not a quick money scheme.
It is a skill like driving or learning a language.

If you are patient, disciplined, and consistent, you can become profitable.

FINAL MESSAGE FOR BEGINNERS

Forex trading is not about luck.

It is about:
✔ Learning
✔ Practice
✔ Discipline
✔ Risk management
✔ Patience

If you respect the process, the process will reward you.

This is the end of the Beginner Lessons section.

Next step (optional but powerful):

“How To Create A Simple Trading Plan – Beginner Guide”

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