Currency trading is one of the most common forms of online trading today; and for a good reason. Currency is the world’s most liquid asset. The high demand for the asset causes the market to fluctuate rapidly; opening the door to profitable opportunities. One of the most exciting currencies to trade these days is the South African Rand. With that said, today, I’m going to offer a few tips for trading the rand to help you to be more successful. So, let’s get right to it…
Tip #1: Remember That You Can Profit In Both Directions
One of the most important things to remember when trading any currency is the fact that when trading currency, you’ve got the ability to profit no matter which direction the value moves. Unlike trading stocks, traders can actually make money when the currency they are trading is falling in value. So, when you see downtrends in the value of the Rand, don’t let it scare you; instead, look at downtrends as opportunities!
Tip #2: Pay Close Attention To Jobs Reports
As with any currency, movement in the South African Rand is directly correlated with economic conditions in the country it represents; South Africa. So, when trading the currency, it’s incredibly important to pay close attention to factors that affect the health of the South African economy. With that said, the South African Government as well as consumers will agree that the biggest problem with growth in the country’s economy is the massive percentage of consumers that are unemployed. Currently, the unemployment rate in the country is higher than 25%. With that said, currency traders watch this figure incredibly closely because when the unemployment rate rises, the value of the Rand tends to fall. Adversely, when unemployment in South Africa improves, that value of the South African Rand also improves.
Tip #3: Watch Key Sector Growth
As with any currency, the South African Rand will fluctuate in value along with fluctuations in the health of key South African markets. While the country’s economy is relatively diverse, there are a few sectors that you’ll want to pay close attention to when trading the currency. Those key sectors include mining, agriculture, vehicle manufacturing, food processing, clothing, telecommunication, energy, financial services, real estate, tourism, transportation, and wholesale and retail trade. When these sectors are doing well, we tend to see the value of the South African Rand increase. However, when these sectors are not doing well, we tend to see declines in the value of the Rand.
Tip #4: Trade With A Clear Head
No matter what currency you trade, or even what type of trade you’re making for that matter, it’s never a good idea to trade when emotions are high. One of the biggest reasons for losses while trading currencies, stocks, options, and more is emotional trading because it causes the trader to overreact to changes. With that said, always have a plan, and if you don’t feel like you’re completely focused on the job at hand, save the trading for later!
Final Thoughts
Trading currency is exciting. It can be even more exciting when trading a highly volatile currency like the South African Rand. Keeping the tips above in mind, you should have no problem realizing profit while trading the Rand online! So, what are you waiting for…it’s time to start trading! Thanks for reading!