Why Forex Trading Is Becoming Such A Big Deal In SA
The biggest forex misconception: a get-rich-quick scheme
Volatile, erratic, risky, personal, emotional, intense and stressful are some of the words Forex traders used to describe the trade to HuffPost SA. All emphatically share the sentiment that it is far from easy and definitely not a get-rich-quick scheme.
"You pack people into a class and ask them to pay R25,000 for two days, promise them riches but only 5% of them make money after," says
Forex Academy's Ernest Klokow. "These people are overpromising because quick returns are largely not possible."
"What they don't tell you is that all beginner traders have a 95 percent chance of failing," warns
Real Trader's Chrizette Rossouw. Rossouw had her accounts completely wiped out when she started trading and it took her years before she made any real money out of forex trading.
ACM Gold's David Rosenthal says people who have made money quickly normally end up losing it the same way. His advice: "Steady and easy. Trade money as you would any other investment." Rosenthal blames false advertising for creating unrealistic expectations and misleading people.
Johannesburg-based forex trader, Tshepo Brand, warns potential investors not to fall for brokers who guarantee returns. "There are no guarantees, and any forex trader who tells you that is a liar," he tells HuffPost SA.
Colin Abrams agrees. A full-time forex trader himself, he tells HuffPost SA: "If you think it's quick wealth, you are inviting short-term trouble. It is trickier and more complicated than people think, but people underestimate its difficulty."
You will lose money -- guaranteed
Maria Bongwe lost R1,6 million. The 40-year-old from Polokwane, who had been trading for just a couple of weeks, made a R100,000 initial investment that quickly grew to R1,6 million. She then lost it all.
"I just did not have the proper knowledge and relied on the broker," she tells HuffPost SA. Bongwe recalls how shattered she was at the loss: "I was literally burning and they had to pour ice water on me."
Johannesburg-based forex trader, Siphiwe Magudulela, paid R35,000 to attend a trading seminar and has been trading full-time since. He says he made his first million in September 2015, but lost it all in February of 2016. "I made two bad trades and to this day I am still recovering," he says. "It is not easy, you need to have an appetite for risk-taking."
Percy Ngwenya, from the North West, blames losses he has made as a forex trader on greed. Ngwenya, who labels trading as a "very dangerous investment" tells HuffPost SA he miscalculated how the market would perform during Brexit. "I woke up and started trading late and instead of pulling out of the trade, I stayed longer, and lost all my money" he confesses. He has lost R25,000 in one day in one trade. Trying another form of trading, he lost R60,000 in one go. "It's sometimes a game of making gains and losses." Ngwenya says he is taking a break to recover, but he will go back to it because he "loves trading".
Another forex trader, Thanda Zulu, who is based in Durban, has also been doing it full-time for almost five years. She paid R10,000 to attend a seminar about trading and was immediately hooked. Unemployed at the time, she saw it as a great opportunity to earn some income. A view she still strongly holds. She admits, however, it hasn't been an easy journey. "The seminar was just not enough. I had to teach myself and be hungry for it." Zulu says it's been up and down, making and losing money. She does not believe she has fully reaped the benefits forex trading can afford her.
