In an economy where one needs a well-paying job to live well and enjoy life to the fullest takes an extra income investment platform by the side. Online forex trading is fast becoming an alternative investment venture for many in Ghana. With the inflow of international brokers here in Africa, it is becoming easier in terms of transfers and transactions. Once an arena for Banks and financial institutions individuals are now coming onboard thanks to retail Brokers.
Ghana can now boast of some few Brokers with some white label (A branded Platform in the name of another Broker) as well as fund managers. Forex trading in Ghana might be new but can boast of well know personalities who have invested heavily either trading themselves or having a private floor with experienced professional traders. It will always one thing to know someone by his wealth and another to know what is giving them money.
Some quickly let me share with some few things you will need to look out for as a Forex investor
1) 1)What type of Broker am I dealing with?
There are a lot of MT4 Platforms out for traders and investors but knowing the type of Broker you are dealing with is very important. The following are types of brokers you will find
DD - Dealing Desk: A dealing desk broker is a market maker. Market makers typically offer fixed spreads and may elect to quote above or below actual market prices at any time. Market makers are always the counterparty of the trader, who doesn't trade directly with the liquidity providers. Market makers get paid through the spreads, and they usually also take the opposite trades of their clients prior to covering themselves (or not) with regards to the liquidity providers.
NDD - No Dealing Desk: An NDD forex broker provides direct access to the interbank market; it can be an STP or STP+ECN broker (see below for STP and ECN broker definitions). With a genuine No Dealing Desk broker, there is no requoting of prices, which means that you can trade during economic announcements without any restrictions. The spreads offered are lower, but they are not fixed, so they can increase significantly when volatility is increasing during major economic announcements. An NDD broker can either charge a commission on each trade or choose to increase the spread.
STP - Straight Through Processing: In STP mode, transactions are fully computerized and are immediately processed on the interbank market without any broker intervention.
ECN - Electronic Communication Network: ECN brokers provide and display real-time order book information (featuring the orders that were processed and the prices offered by banks on the interbank market). They thereby improve market transparency by providing information to all market participants. ECN brokers usually make their money by charging a commission on the traded volume. With ECN brokers, all transactions are directly processed on the interbank market in No Dealing Desk mode.
MTF (Multilateral Trading Facilities): An MTF exchange ensures that buyers and sellers of financial instruments can come together according to non-discretionary rules. An MTF is not a regulated exchange, but it operates under the same rules. MTF rules are transparent and ensure a fair trading system. The broker guarantees price efficiency and the clearing of transactions. Compared to a traditional exchange, a multilateral trading facility provides greater discretion, faster orders execution speed and reduced brokerage fees. So you can feel free and call a Broker or better find their office, if you think there not so sure that will be a good decision point to walk away. Ones convinced you can go ahead and open an account with them and make your deposit.
2) How is Depositing and withdrawals made?
This is also very important thing to look out for as an investor, some brokers' offer the bank wiring system will is a good way to go. Others try eCash systems which are not too bad but at times come with problems associated with some of these systems. Normally crediting of one's account should not take more than 24hrs. In terms of withdrawal some brokers resort to local banks, meaning the can send your profit to any Bank account in Ghana.
3) How will trading be done for you?
So you ready to invest your money, but how will trading be done? Some broker can boast of free or paid signals that can aid trade for you. Future Pip an ECN/STP Broker provides that kind of system for most investor on their platforms. Investor must insist on being a part to choosing a fund manager and look out for their trading scheme. This will help you realize who he is trading and how to monitor your account.
But one thing remains sure, always be involved in the opening, funding and choosing of fund managers of your account. Even if you time to check your platform everyday some brokers will send you statements of your account. Ghana is becoming a playing filed for Forex trading and will take informed investors to take advantage of the Global Financial Market.
MICHAEL N.L LAMPTEY
e-mail: [email protected]
t : +233 241 440 394