TryBuying Knowledge Base

Forex (foreign exchange) is the decentralized global market where world currencies are bought and sold. Learn how to navigate it in our comprehensive Forex for Beginners Guide.

Yes, it is entirely legal. Retail trading is permitted under the oversight of the Financial Sector Conduct Authority (FSCA) within individual exchange control allowances.

Currencies are always traded in pairs (e.g., EUR/USD). The first currency is the base currency, and the second is the quote currency; the rate shows how much quote currency is needed to buy one unit of the base.

A pip (“percentage in point”) represents the smallest standard price increment move in a pair, typically the fourth decimal place (0.0001).

A lot measures trade volume. A Standard Lot is 100,000 units of the base currency, a Mini Lot is 10,000 units, and a Micro Lot is 1,000 units.

The spread is the numerical difference between the Bid (selling) price and the Ask (buying) price. It serves as a primary operational cost charged by brokers.

Leverage lets you control large positions using a minor structural margin deposit. While 1:100 leverage increases market power, it equally magnifies potential gains and losses.

Margin is the good-faith capital deposit required on your balance to open and maintain a leveraged market position.

A margin call occurs when your account equity falls below the broker’s minimum required margin level, prompting a warning to close positions or add capital.

The stop-out level is the point where a broker automatically liquidates your open positions to prevent your account from falling into a negative balance.

Going long means executing a buy order with the clear expectation that the price of the asset will rise over time.

Going short means initiating a sell order, profiting if the underlying currency drops in value relative to its pair.

Majors are heavily traded global pairs containing the US Dollar on one side, such as EUR/USD, GBP/USD, and USD/JPY, featuring low spreads.

Exotics pair a major global currency with an emerging economy currency, such as USD/ZAR. They usually carry higher spreads and increased volatility.

Crosses (or minor pairs) are pairs that do not feature the US Dollar, such as EUR/GBP or EUR/JPY.

The four main global trading windows are the Sydney, Tokyo, London, and New York sessions, keeping the market open 24/5.

The ideal window is 14:00 to 18:00 SAST, during the high-volume London and New York session overlap.

A risk-free environment provided by brokers using virtual funds, designed to practice executing setups and strategy testing safely.

A funded real-money environment where actual capital is exposed to live market risks and profits or losses are real.

Slippage occurs when a trade is executed at a slightly different price than requested, typically during extreme news events or low market liquidity.

The Financial Sector Conduct Authority (FSCA) is the local regulatory body responsible for overseeing market conduct and licensing financial service providers in South Africa.

Locate the broker’s FSP number on their website footer, then cross-verify its active status directly on the official FSCA register portal.

An FSP (Financial Services Provider) number is a specific registration ID issued by the FSCA confirming a firm’s legal right to offer financial services locally.

Top-tier authorities include the FCA (UK), ASIC (Australia), and CySEC (Cyprus). They ensure high capital protection levels for international accounts.

A safety practice where a broker holds client capital in a separate bank account away from corporate operational funds, protecting your deposit.

A Market Maker (Dealing Desk broker) creates its own internal liquidity pool and takes the opposite side of client trades directly.

An Electronic Communication Network (ECN) broker routes trade orders directly to institutional liquidity providers, matching buyers and sellers transparently.

Straight-Through Processing (STP) brokers pass your trade orders directly to liquidity providers without running an internal dealing desk filter.

Key red flags include guarantees of fixed returns, lack of verified regulatory credentials, aggressive recruitment bonuses, and restricted withdrawals.

No. When a broker manages your account, it presents a clear conflict of interest. True education means maintaining independent trading control.

A safety feature preventing your balance from dropping below zero during extreme market events, ensuring you never owe money to your broker.

An incentive structure extending nominal credit to trading balances. Beware of hidden withdrawal clauses attached to these bonuses.

A small, live credit balance provided by brokers to let users test live environments without risking upfront personal capital.

Regulated local brokers typically process standard bank payments within 24 to 48 hours.

A specialized trading profile that waives overnight interest fees (swaps), keeping account structures compliant with Sharia law principles.

Fixed charges applied per lot traded, typical of zero-spread ECN accounts. Make sure your overall cost structure remains sustainable.

With brokers that offer negative balance protection, your maximum loss is strictly limited to your total deposited capital.

Regulated entities are required by law to verify identities and residential addresses to comply with anti-money laundering regulations.

Only if they hold reputable tier-1 oversight credentials. Unregulated offshore entities offer zero legal safety options if issues arise.

A business setup that uses another broker’s regulatory and software framework under its own brand name.

The strategic application of rules to protect your capital from market drawdowns. Read our primary foundational pillars on Risk Management Rules.

A core rule stating you should never risk losing more than 1% of your total account balance on any single trade placement.

An automated instruction that exits a losing trade at a predetermined price level to limit downside risk.

An automated target parameter that closes a winning trade when the price reaches your profit objective.

Divide your dollar-at-risk amount by your stop-loss distance in pips, factored by the point value of the pair. Try our dedicated interactive Position Size Calculator.

The structural relationship between potential risk and return. A 1:2 ratio means risking R100 to target a profit of R200.

Drawdown measures the peak-to-trough decline in your trading equity during a losing streak, expressed as a percentage.

The emotional urge to recover losses immediately by taking un-planned trades, which often leads to deeper account drawdowns.

Set a strict maximum number of setups allowed per day, and close your platform once that limit is reached.

A journal logs your historical performance, helping you identify mistakes and confirm which technical setups perform best over time.

A stop-loss order that automatically trails behind a profitable trade at a set distance, locking in gains as price moves in your favor.

An emotional response that drives a trader to enter late into a fast-moving market without a proper entry signal.

High leverage increases your potential position size, meaning minor pip moves create large swings in your equity balance.

Equity is your current account balance plus or minus the real-time profit or loss from your open positions.

Free margin is the capital available in your account to take on new trades, calculated as Equity minus Used Margin.

Reduce your risk per trade by half, or step back to a demo account until you are aligned with current market conditions.

Moving your stop-loss to your exact entry price once a trade goes into profit, eliminating further financial risk on that position.

Many professional strategies operate with a 40% to 55% win rate, maintaining profitability through strong risk-to-reward ratios.

A multi-stage challenge where traders must hit profit targets without breaching daily drawdown limits to earn access to funded capital accounts.

Take partial profits at structural targets and trail your stop-loss behind proven key levels.

Studying historical price charts and technical data, such as volume and patterns, to predict future price direction. Explore our foundational Trading Strategies Library.

Evaluating economic indicators, central bank decisions, and geopolitical factors to determine a currency’s underlying intrinsic value.

A chart area where buying interest typically overcomes selling pressure, causing a downward price trend to pause or reverse.

A chart level where selling interest often matches or beats buying pressure, preventing the price from rising further.

A line drawn across swing lows in an uptrend or swing highs in a downtrend to visually map out market direction.

A technical indicator that smooths out price data by creating a constantly updated average price over a set number of periods.

A setup where a fast moving average crosses a slow moving average, indicating a shift in trend direction.

A momentum oscillator tracking price speed and change between 0 and 100, highlighting overbought (above 70) or oversold (below 30) states.

Visual shapes formed by open, high, low, and close prices that help identify market shifts (e.g., Engulfing candles, Pin bars).

A strategy based on analyzing clean price charts and candle formations without relying heavily on lagging technical indicators.

Entering a trade when the price moves cleanly outside a defined support or resistance range, catching an expansion in momentum.

A medium-term approach where positions are held for several days or weeks to capture broader market swings.

A style where all positions are opened and closed within the same day, avoiding overnight market gaps or funding fees.

An intense, short-term style targeting small price movements by opening and closing many positions within minutes.

A tool used to track scheduled high-impact economic news releases, such as central bank interest rate updates or employment data reports.

An influential US economic indicator released monthly that measures new jobs added, often causing high volatility across major currency pairs.

Liquidity measures how easily an asset can be bought or sold without causing a major change in its price level.

Volatility measures the size and frequency of price swings in a market, offering opportunities alongside increased risk.

A chart area where the price moves within a tight horizontal range, showing balance between buyers and sellers before a breakout.

A structural shift where the prevailing market trend changes direction, such as a downtrend turning into a new uptrend.

An automated trading script written for the MetaTrader platform that executes trades based on specific coded rules. Explore programming guides in our MQL5 Code Section.

A widely used retail trading platform known for its charting tools and ability to run automated MQL4 expert advisors.

The advanced, multi-asset successor to MT4, featuring an optimized 64-bit engine, built-in economic calendar, and native MQL5 script execution.

MetaQuotes Language 5 (MQL5) is an object-oriented programming language designed to build advanced automated strategies, indicators, and tools for MT5.

Running an automated strategy script through historical chart data to analyze how its rules would have performed in the past.

Testing a range of variables in the Strategy Tester to find the most effective technical settings for your automated script.

A Virtual Private Server keeps your MT5 platform running 24/7, protecting automated EAs from power drops or local connectivity cuts.

Using computer algorithms to analyze market data and execute trade orders automatically based on fixed parameters.

No. EAs eliminate emotional errors but only follow their programmed rules, meaning they can face drawdowns if market conditions change.

An Application Programming Interface connects custom analytical tools or external trading software directly to your broker’s price stream engine.

A program designed to perform a single, immediate task on your platform, such as closing all open trade positions at once.

A custom program that calculates specific price-action data to display custom lines or visual signals directly on your chart layout.

An error where an EA is over-optimized to match historical data perfectly, which often leads to poor performance in live market conditions.

The time delay between sending an order from your platform and its execution on the broker’s server, measured in milliseconds.

A setting in an EA that determines how far the price must move before the trailing stop-loss updates its position.

An EA that places buy and sell orders at fixed regular intervals above and below a set price, risking drawdowns in trending markets.

A risky system that doubles position sizes after every loss, which can quickly exhaust account equity if a long losing streak occurs.

Running an EA on a live or demo account in real-time to monitor its performance before committing standard capital sizes.

A service that automatically copies the trades of a separate account directly into your MetaTrader platform engine.

The most detailed historical data available, recording every single price change update for accurate EA backtesting runs.