The World Bank reports growth in the Moroccan economy has been in a downtrend for the past 2 years, but perhaps this assessment reports nothing more than a healthy pullback. Morocco is currently the No.5 economy on the continent of Africa measured by gross domestic product (GDP).
The Moroccan currency, the dirham, is becoming a stronger currency because of the government’s liberal exchange rate policy. Greater inclusion in the global financial structure and an increasingly strong regulatory structure have contributed to the popularity of forex investing in the country. If you are looking to get started with your forex career in Morocco, read on. We have the basic steps you will need to follow.
Get Started with Forex in Morocco
To start trading, you will first need to set up your personal financial infrastructure.
- Get a good internet connection. A fast internet connection is important if you want to have success in forex investing. Some forex strategies are based on impeccable timing as well as having timely information. You can connect to forex through your smartphone, but you probably want bigger screens to hold the financial news feeds and charts.
- Pick out a forex broker. You have plenty of choices for a forex broker in Morocco and you can choose an offshore broker as well. Make sure that your broker has good customer service and reputable reviews.
- Open your investment account. When you pick your broker, one of the major decision points should be the ease of opening your investment account. Connect a funding source and verify your identity, and you should be good to go.
- Put funds into the account. You have to put money in if you want money out! You can fund forex from a credit card, personal check, your bank account or a debit card.
- Select a trading platform. If you pick a broker that already has a trading platform set up, you may want to trade through it. If not, download the software for your preferred trading platform.
- Start trading. You have your infrastructure set up and ready to go. You can start trading now.
Morocco Forex Trading Strategies
Those who trade forex successfully usually study for many years and have knowledge of many investment strategies. Here are the different types of trading that you should be familiar with.
If you like making small profits quickly, then day trading or scalping may be the forex trading style for you. You will pay much more attention to chart technicals than currency fundamentals — GDP means much less than daily volume in this fast-moving, high-frequency world.
Day traders may exit a trade only seconds after entering. The profits are usually very small — you don’t want to give a currency even the slightest chance to move against you. Timing is very important. Your internet connection has to be latency-free and extremely strong. Some of the largest investment banks in the world specialize in short-term trading, so you will have a great deal of competition.
Mid-term trading is also known as swing trading. If you are swing trading, you fall into two basic categories — trend and range traders. If you are catching a trend, you are profiting from a directional move of a currency. If you are trading in a range, you are buying low and selling high between support and resistance.
Swing traders may execute only a few trades per month or they can be a bit faster. Chart patterns are important, but you may also need to know the macroeconomic conditions that are moving the market. Because you are investing for days or weeks at a time, bigger events can move your trade.
If you are a long-term trader, you are a position trader. This type of trading is for people who enjoy profiting from big moves. You will not worry as much about short-term pullbacks in the market. The fundamentals of a currency have a greater influence on its price in the long term.
You also worry less about daily news if you are a positional trader. If you like to study the politics and business of Morocco and how that ties into the global economy, long-term trading may be for you.
Forex Trading Example in Morocco
MAD/USD is trading at 0.10110/0.10410. You see the dirham price rising in the near future and you are looking to buy MAD1,000,000. The margin rate of this currency pair is 3.01%, so you will only need $3,044.01 in your account to control MAD1,000,000. You will borrow the rest from your forex broker.
The MAD/USD price moves up and is trading at 0.11005/0.11110 after 7 hours. The value went up by 59.5 points. The total amount of money you made on the trade is:
(MAD1,000,000 x 1.13010) – (MAD1,000,000 x 1.12603), or $5,950.
Making Money with Forex in Morocco
There are more ways than one to make money using the forex market. Here are just a few that you should be familiar with.
- Shorting the forex market: The market doesn’t have to go up for you to make money. If you short the market, you profit from downward moves.
- CFDs: Using a CFD, or contract for difference, is the same as buying and selling currencies directly, but you never actually own the currencies involved.
- Binary options: Binary options are contracts that offer a win or lose proposition instead of directly tracking profits and losses from currency price movement.
Best Online Forex Brokers in Morocco
Take a look at some of the forex brokers you can access in Morocco.
You should be comfortable with some common terms before you begin investing in forex.
- Pip: A basis point, worth $0.0001, which is the smallest forex unit.
- Lot size: The amount of currency you trade is your lot size. A standard lot size in forex equals 100,000 units.
- Orders: You communicate to your trading platform through orders, telling how big of a lot size you want and what currencies.
- Calls: Known as a derivative, a call is an option to purchase a predetermined currency at a set time at a set price.
Investing in the World
Forex is simple to learn, but investors spend many years mastering its nuances. If this is your first time in the market, practice trading with a virtual account (using fake money) before putting real money in the game. Most reputable forex brokers will offer this.
There are always new strategies you can learn for forex success. Bookmark this page for updates and take in the rest of our blog for a better understanding of the forex market.