Safe or not safe, that is the forex question.

If you are a tea lover you will be very interested to know that there is a drought in certain regions of South Africa. Ok, I know that you might be thinking, what a drought has to do with me and drinking tea. Well, it does affect us more than you might think, because of the drought there is a possibility that the price of Rooibos might increase with 60% to 90%.

Furthermore, due to the fall of the Rand there is a chance that inflation will increase, and analysts say that it could be more than 6% compared to around 5% this year, which will lead to a possible interest rate hike of up to 2% next year. It does seem that there is no time like now to start growing your capital to offset the effects of these financial indicators.

How do you grow your money

safely and get a decent return.

This is the question that most people ask but very fewer can fully answer simply because they don’t have enough information to base their answer on. So how do you answer this question, well you first have to understand what to look out for. Here are a couple of things to keep in mind when deciding who to "trust" with you money.

Get to know your broker. When trading forex you always have to work through a trading broker that provides the trading platform for you to trade and make money. But not all brokers are created equally, so you will have to take a look at them very carefully in order to determine if they are the right broker for you. You will have to find out the following:

1. Is the broker licensed with the relevant regulator in the country they are doing business. IN South Africa that regulator is the Financial Services Board (FSB). The license is the regulator's assurance to you that the business/broker is approved for the services that they provide.

2. Make sure that the broker is licensed in the country that they have their head office. Sometimes brokers do business in South Africa with an FSB license but also run their head office in Cyprus for example, and they would need a license there too.

3. Can your trade capital be deposited with a local bank which the broker has an account with and do these funds remain in South Africa when you trade?

4. Are client funds held in a separate account, where expenses of the broker is not deducted?

These are the primary questions to ask when considering if a broker is right for you or not. In addition to this, you will also have to know the following when it comes to the actual trading activity:

1. Does the broker requote? When your broker cannot or does not want to open a trade at the price that you entered the trade, this is called a requote. This can experience largely when there is high volatility news.

2. Is scalping permitted? You should be able to take trades with very small targets of 2-10 points. These small trades are called scalping trades

3. Positive slippage. This is when a trade is entered at the price that is requested.

4. Is hedging permitted? Hedging is the process of opening a trade in the opposite direction of another trade in order to manage the impact of any possible loss.

So, as you can tell it is important to know what questions to ask and to have enough information to make the best decision. All of this information is what we considered when choosing our new trading broker and it was good that we do that because the new broker has all the aspects that align with our 3 pillars of our business, Transparency, Control for the client and Security and Safety of Trading Funds.

This is why we choose CM Trading as our preferred broker because they provide all of the above features and has a good reputation in the market. The final reason for our partnership with CM Trading is the option of CopyKat Trading which allows you to copy any trader of your choice and when the trader you copy makes money then you make money.

So when you next decide on investing money or trading forex, be sure to get all the information that is critical to ensuring that it does not lead to you losing all your funds because there was no transparency or security.

For more about CM Trading follow this link to more information about our trading broker or if you would like to open an account then click here.

Happy Trading Everyone

Eugene