Luke Jacobi
Contributor, Benzinga
July 15, 2020 Updated: July 15, 2020
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If you think you’d like to start trading forex from Ghana, start with a dependable online forex broker. It’s also important to copy another successful trader or develop your own viable strategy as part of an overall trading plan.
Think you’re ready to try your hand at forex? Find your broker, draft a plan and more with our guide to forex trading in Ghana.
Contents
Get Started with Forex in Ghana
Starting out as a forex trader in Ghana is relatively easy. You can simply follow the steps outlined below to open up a trading account so that you can trade forex online:
- Obtain an Internet-connected device like a computer, smartphone or tablet.
- Research which online forex brokers accept clients from Ghana.
- Apply to open a margin trading account with the broker you prefer.
- Deposit funds in that account using a payment method the broker accepts.
- Obtain access to the broker’s proprietary trading platform or a platform the broker supports.
- Place an order for your 1st trade.
Once those steps have been completed, you’ll have a funded account with an online forex broker and be ready to trade currencies from Ghana.
Ghana Forex Trading Strategies
The next step is to develop a profitable trading strategy to improve your odds of trading successfully. Your choice of strategy can depend on how experienced you are, your personality and how much time you have to devote to trading.
Here are several popular strategies that have yielded positive results for some forex traders:
Scalping: traders using this strategy aim to profit from very short term market fluctuations. They quickly enter and exit the market to capture a few pips each time.
Day trading: cay traders use a variety of strategies but generally close out all positions by the end of each trading session. This allows them to avoid the additional risk involved in taking positions overnight.
Trend trading: trend traders take a long view of the forex market looking primarily to follow extended directional movements called trends so they often take overnight positions. They aim to profit by establishing positions that follow the trend and closing out those positions when the trend ends.
News trading: news traders aim to profit from the notable volatility seen immediately after the release of major economic or geopolitical news.
Swing trading: swing traders typically use momentum indicators to buy when the market is low and sell when it is high. Since this strategy lacks time constraints, swing traders sometimes take positions overnight.
This 1-year chart displays a 5.62-5.82 trading range from April to July 2020 in the USD/GHS currency pair that a swing trader could have profited from. Source: XE.com.
Forex Trading Example in Ghana
The Ghanaian cedi is the unit of currency of the Republic of Ghana. It has the currency sign GH¢ and the currency code GHS. 1 cedi is further divided into 100 pesewas (Gp). The Bank of Ghana issues and manages the cedi.
A recent quote for the USD/GHS exchange rate was 5.80 Ghanaian cedi to 1 U.S. dollar. If your market view anticipates a rise in the USD/GHS exchange rate, then you could purchase 100,000 U.S. dollars versus the Ghanaian cedi today at the current 5.80 exchange rate.
If the USD/GHS exchange rate were to subsequently rally to 5.85, then you could compute your trading profits by using the calculation below:
100,000 USD x (5.85-5.80 GHS/USD) = 5,000 GHS
To then convert that sum of Ghanaian cedi profit to U.S. dollars, you could perform the following calculation:
5,000 GHS ÷ 5.85 GHS/USD = 854.70 USD
Alternatively, if the USD/GHS exchange rate instead declined to 5.75, then you could compute your trading loss as follows:
100,000 USD x (5.75-5.80 GHS/USD) = -5,000 GHS
You could convert that loss into U.S. dollars at the USD/GHS exchange rate of 5.75 like this:
-5,000 GHS ÷ 5.75 GHS/USD = -869.57 USD
Making Money with Forex in Ghana
Making a profit trading forex from Ghana will generally require coming up with a profitable trading strategy as part of an overall trading plan that incorporates sound money management principles. Those new to trading can now skip that step by copying a successful trader’s transactions using a social trading platform.
If you prefer to develop a custom trading plan yourself, then trading successfully will largely depend on how your strategy performs and if you can follow it in a disciplined manner. Any 1 of the proven trading strategies can be used, no matter if you prefer to trade long term trends or trade intraday.
An ideal trading strategy will usually have objective trading criteria and some type of risk/reward analysis that you can quickly use to determine whether a trade is worth making. Although your strategy might work well initially, you may also need to revise it over time as market conditions change.
Best Online Forex Brokers in Ghana
Ghana’s central bank is The Bank of Ghana. It acts as the main financial regulator in the country and has the responsibility for overseeing financial institutions like forex and contract for difference (CFD) brokers and associated trading activities. You can choose from among the well-regulated brokers in the table below to find a suitable forex broker that will take Ghanaian traders.
Pairs Offered
80+
Account Minimum
100 of your selected base currency
Pairs Offered
80+
1 Minute Review
FOREX.com is a one-stop-shop for forex traders. With a massive range of tradable currencies, low account minimums and an impressive trading platform, FOREX.com is an excellent choice for brokers searching for a home base for their currency trading. New traders and seasoned veterans alike will love FOREX.com’s extensive education and research center that provides free, informative forex trading courses at multiple skill levels. While FOREX.com is impressive, remember that it isn’t a standard broker. You can’t invest in the stock or bond market through your FOREX.com and you cannot open an account with tax advantages. The confusing pricing and margin structures may also be overwhelming for new forex traders.
Best For
- MetaTrader 4 users
- Beginner forex traders
- Active forex traders
Pros
- Impressive, easy-to-navigate platform
- Wide range of education and research tools
- Access to over 80 currencies to buy and sell
- Leverage available up to 50:1
Cons
- Cannot buy and sell other securities (like stocks and bonds)
- Confusing margin requirements that vary by currency
- Limited customer support options
- Cannot open an IRA or other retirement account
Pairs Offered
50+
Account Minimum
100 EURO
Pairs Offered
50+
1 Minute Review
A fully regulated broker with a presence in Europe, South Africa, the Middle East, British Virgin Islands, Australia and Japan, Avatrade deals with mainly forex and CFDs on stocks, commodities, indexes, forex, cryptocurrencies, etc. This brokerage is headquartered in Dublin, Ireland and began offering its services in 2006. It offers multiple trading platforms and earns mainly through spreads.
Best For
- Beginners
- Advanced traders
- Traders looking for a well-diversified portfolio
Pros
- Controlled by regulatory agencies of multiple countries
- Choice offered in terms of trading platforms
- Support available in 14 languages and trading platforms in 20 languages
- Practice/demo account available for trying out
- Breadth of trading assets
Cons
- Does not accept customers from the U.S. as it isn’t regulated in the U.S.
- Transferring funds to the account may take up to five days; withdrawals could take up to 10 days
Pairs Offered
47
Account Minimum
$50 USD
Pairs Offered
47
1 Minute Review
Though Australian and British traders might know eToro for its easy stock and mobile trading, the broker is now expanding into the United States with cryptocurrency trading. U.S. traders can begin buying and selling both major cryptocurrencies (like Bitcoin and Ethereum) as well as smaller names (like Tron Coin and Stellar Lumens).
eToro offers traders the opportunity to invest their assets into premade portfolios or cryptocurrencies, similar to services offered by robo-advisors through traditional brokers. Though eToro isn’t a one-stop-shop for everything an investor needs, its easy-to-use platform and low spreads is a great way to enter the cryptocurrency market.
Best For
- International Forex/CFD Traders
- New cryptocurrency traders looking for an easy-to-use platform
- Traders who want to buy and sell cryptocurrencies on-the-go
Pros
- Simple platform that is easy to master
- CopyTrader feature that allows new traders to copy the same strategies used by professionals
- Virtual dummy account that gives you $100,000 to practice trades
Cons
- U.S. traders currently limited to cryptocurrencies
- Only 15 major coins available to trade
Forex Terminology
Most professions have developed a unique set of terms or jargon that experts use to communicate among themselves and forex traders are no exception. Before you start trading, you’ll want to learn the meaning of these basic terms:
- Lot size: a standard trading amount. The standard lot size for online forex trading consists of 100,000 units of the base currency in a currency pair. Most brokers support smaller trading sizes including mini lots of 10,000 base currency units and micro lots of 1,000 base currency units.
- Pip: this common acronym stands for “point in percentage” and refers to the minimum exchange rate movement seen in a certain currency pair.
- Margin calls: holding a trading position requires funds put on deposit as margin in your account. When the market or regulations change to increase the amount of margin required to a sum beyond what you have in your account, a broker may issue a margin call for you to deposit more money to cover your positions. Many online brokers instead automatically liquidate your trading positions instead of making a margin call.
- Orders: instructions made to a broker to execute trades in your account. Common orders used by forex traders include market, limit, stop-loss and take profit orders.
Is Trading Forex in Ghana Right for You?
Trading forex yourself ideally requires in-depth market knowledge, a decent trading strategy and the discipline to follow your trading plan. If you can meet those requirements, then you may stand a chance of becoming a profitable forex trader.
If you’re a beginner, using a social or copy trading platform can help you avoid some of the more challenging aspects of trading forex since you just copy the trades of an expert with a proven track record.
It’s always important to select a reputable and duly-regulated broker to start trading currencies from Ghana. You can start the process by choosing a broker from among those listed above that takes Ghanaian clients and ask to open a trading account. Most brokers will also allow you to open a demo account 1st to practice trading and test drive the platform.
Choose 1 of our recommended brokers, define your strategy and find success trading forex today.