How to succeed when trading forex in Malawi

Growing popularity of forex trading

One cannot deny that forex trading has gained popularity and traction all over the world, particularly considering the fact that it has given people another income stream to pursue. This is especially true in Africa, a continent plagued by various societal and financial issues. According to reports in early 2021, more and more young Africans that have not been successful in the job market have been turning to forex trading to make a living. Although it has no guarantee of success, any credible broker would advise that to improve your chances of capitalising on the world’s largest financial market, you may want to consider betting on the most popular forex option: USD. Known as the world’s reserve currency, the USD forms part of the majority of forex transactions and the most popularly traded currency pairs. Other perceived stable currencies are the EUR, GBP, JPY and CAD. However, it is very important to note that forex trading can be a high risk, high reward pursuit, which is why caution and tact is advised. Despite this, there are reportedly well over 1.3 million online forex traders across Africa.

Trading forex in Malawi

As in any part of the world, it is important to be mindful of the fact that forex trading is not a quick way to get rich, contrary to popular belief. It is not uncommon for traders to have unrealistic expectations at first, which is mostly attributed to the success stories that are populated as a way to attract more first-time traders. Nonetheless, Malawians need to be extra cautious because for the past few months, the country’s foreign exchange reserves position has been volatile, which is reflective of the impact of the global and economic conditions of 2020. Although, Malawi has seen an increase in the demand for forex, according to the Reserve Bank of Malawi, but has failed to deliver in terms of the supply required for financing it.

As already noted, there is no guarantee of success when trading, but there are a few things that you can keep in mind to guide your decisions. It is often said that practice makes perfect, while one can never be perfect at trading because it is an activity of chance, Malawian traders do need to keep practicing. In this way, they will gain a better understanding of the markets over time, which could lead to success in the long run. Moreover, making use of risk management tools is advised to mitigate the potential losses that you may face, especially those that may push your account towards a negative balance. Perhaps one of the key aspects to consider are global political and economic conditions, over and above Central Bank announcements. All of these work hand in hand and provide an overview of inflation, exchange rates, trade activity and tariffs, as well as other decision-making statistics which all contribute to the performance and value of any given currency. These can be described as the driving forces behind exchange rates, and can be used to gauge or predict future market conditions to better inform your trading strategy.

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Frk
Frk
1 month ago

What are the taxes under, like from profits of such though.

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