Olu Gbemi XM

Do you have money to invest, but are unsure how forex trading works? Do you know the difference between ‘low spread’ and Crypto CFD? Photo: Supplied

XM: Six quick-fire questions with Trading Expert Olu Gbemi

Do you have money to invest, but are unsure how forex trading works? Do you know the difference between ‘low spread’ and Crypto CFD?

Olu Gbemi XM

Do you have money to invest, but are unsure how forex trading works? Do you know the difference between ‘low spread’ and Crypto CFD? Photo: Supplied

Do you have money to invest, but are unsure how forex trading works? Do you know the difference between ‘low spread’ and Crypto CFD?

XM | Six quick-fire questions with Tradepedia Instructor Reino Deetlefs

With the expert help of XM Trading Expert Obu Gbemi, your SIX most commonly asked questions have been answered.

A typical day in the life of an XM trader

It is worthy of note that there are different trading styles, and the typical day of a swing trader, for example, may be quite different from that of a Day Trader.

Part-time traders usually favor the swing trading style; because it allows them to trade the market less actively without affecting their day job/business(es).

However, in this article, I will focus on a day in the life of the more active trader, an XM Day Trader. That way, you will better understand the process involved in trading full-time.

I will divide my description of a typical day in the life of an XM trader into segments that I label; Pre-Market, Early Trading, Second Wind, and Post-Market.


Before the markets spring to life in the morning, XM trader starts their day with a healthy morning routine, which will help them maintain the right mindset and vitality throughout the day. For some, a morning routine may include; meditation, exercise, reading, writing, etc. They then get busy catching up, with coffee and breakfast in hand, on any overnight events which could affect that day’s trading session. Their catchup may involve reading stories from various financial newspapers and websites, as well as listening to updates from news networks such as CNBC, Bloomberg, and XM website.

Traders will also review economic calendars to discover which market-moving financial reports are due that day. They may also look at a currency strength matrix to identify underperforming and over-performing currencies and the current risk sentiment in the market.

After reading about events and taking notes of what the analysts are saying, traders head to their workstations, turn on their computers and monitors, and open up their analysis and trading platforms. Many layers of technology are at work here, from the computer, keyboard, and mouse, to the internet, trading platform, etc. As such, traders spend time confirming the correct functioning of everything before the trading session begins.

If everything works well, traders will begin scanning the markets for potential trading opportunities. Some traders work in just one or two markets (such as two stocks or currency pairs), and they will open up these charts and apply selected technical indicators, or other trading tools, to see what is going on in those markets.


The first half-hour of trading is typically pretty volatile, so many (but certainly not all) individual traders sit on the sidelines to give the market time to settle and avoid getting instantly stopped out of a position. However, as they wait, most XM traders spend parts of their day tuned into the XM Live Education rooms, either the Beginners or Advanced Room. There, they join the trading experts, who teach and analyse different markets to share their wealth of knowledge with traders without holding back. Some traders use the opportunity of these live classes to ask questions about the financial instruments they have scanned earlier and get the experts’ opinions on the financial markets they are interested in.

Precision and timing become increasingly crucial as traders watch for trading opportunities based on their trading plans, experience, intuition, and current market activity. Once an opportunity arises, the trader must act on time to identify the setup and pounce on the trade.

The trader uses an order entry interface to submit orders to the market. Many traders will also submit simultaneous orders for profit targets and stop losses to protect against adverse price moves. Depending on the trader’s goals, they will either wait for this position to close out before entering another one or continue scanning the markets for additional trading opportunities.


An XM Trader takes some time off the screens during the day to rest because they understand the advantage of a clear mind in a successful trading business.

After taking some time to rest, a trader continues to monitor their open positions and look for any more opportunities. Because day traders do not hold their positions overnight, many set a time limit past which they will not open additional trading positions (e.g. 16:00). That helps ensure they have enough time to profit before the markets close.


After the markets close, traders round off the day by reviewing their trades, noting what went well and what could do better. Many discretionary traders use a trading journal – a written log of all trade positions, including ticker symbol, setup, entry price, exit price, number of shares, and any notes about the trade or what was happening in the market that might have affected it.

Many traders will return to a financial news network to get a recap of the day and start making plans for the next trading session.

Day traders spend much of their days scanning the markets for trading opportunities, and they monitor open trade positions. They spend many of their evenings researching and improving their trading plans.

Why should South Africans invest with XM?

South Africans have a wide range of intelligent people who can recognise a genuine opportunity when they discover one. That is why they can certainly tell XM apart from the others, which makes XM their best choice.

Founded in 2009, XM has the trust of over 10 million traders from over 190 countries. XM is considered fair, transparent, reliable, and trusted, with an excellent trust score.

XM is regulated and authorised by the Financial Services Commission (FSC) of Belize  the Cyprus Securities and Exchange Commission (CySEC) and the Australian Securities and Investments Commission (ASIC). XM provides trading versatility, as they support both MetaTrader 4 and MetaTrader 5 platforms, which offer state-of-the-art technology, simple to use, and a user-friendly interface.

Both applications are available on many devices, from installed software on a PC to WebTrader in a web browser and mobile devices.

XM Broker offers leverage ranging from 1:1 to 1000:1 level, but what is available for traders to choose from will largely depend on their asset, trade size, and account type.

XM trading hours open and close in sync with each market’s active hours, which means you can trade for 24 hours a day, 5 days a week in the forex market. Cryptocurrency trading is also offered which can be traded 24 hours a day, 7 days a week.

XM provides 24-hour phone, email, or online chat customer service from Monday to Sunday in 30 different languages. That extended language support makes it possible for nearly everyone to communicate securely with XM’s dedicated support team. The broker is keen on maintaining its customer’s trust and striving to achieve a perfect score in satisfying clients. They understand that reputation and credibility are closely associated; thus, they strive to pursue and improve their ability to follow clients’ needs based on their expectations.

XM Broker provides rapid processing of payments, such as deposits and withdrawals, supported by many transfer methods. Another specialty of XM is the availability of free (no fee) deposit and withdrawal options.

XM Broker provides traders with a wide range of assets, including precious metals, commodities, stocks, and energy products. The company allows trading with over a thousand financial instruments in seven asset classes, including equity indices, energies, cryptocurrencies, commodities, precious metals, individual stocks, and foreign exchange.

You could find over 1,200 CFDs and about 57 forex pairs (exotics, majors, and minors) in the broker’s assets library.

XM presents comprehensive research and educational features, ranging from daily news, research on market conditions, forex seminars, and live education with 20 multilingual professionals. That includes market reviews, stock market news, forex news, investment-themed articles, technical analysis, videos, and a learning center where webinars, seminars, and video tutorials are presented. Besides the live education programs, XM also offers a well-equipped educational center in South Africa to help traders acquire trading skills free of charge.

For all the reasons I stated above, we can all tell that XM remains every South African’s number one choice.

Investing for dummies: How does forex trading work?

Forex trading involves speculating on currency prices for potential profit-making. Currencies are traded in pairs, so by exchanging one for another; a trader anticipates that one currency will rise or fall in value against the other.

Traders use technical and fundamental analysis to predict the currency’s direction. Technical analysis involves studying charts and patterns to identify trends and make trading decisions. On the other hand, Fundamental analysis means analysing economic and political events that may affect the value of the currency pairs.

Traders can either buy or sell a currency pair. A trader buys a currency pair when they expect the value of the Base currency to increase more than the Quote currency. They sell a currency pair when expecting the value of the base currency to decrease against the quote currency.

A trader takes a position in the market when they buy or sell a currency pair. If the trader’s prediction is correct, they will make a profit. If their prediction is incorrect, they make a loss.

Forex trading is done using leverage. Leverage allows traders to control a sizable amount of money than they have in their accounts. For example, if a trader has a leverage ratio of 100:1, they can control $100,000 with $1,000. Leverage can increase profits, but it can also increase losses.

Forex trading involves risk, and traders should only invest money they can afford to lose. They should also have a solid understanding of the market and the tools used to analyse it.

How safe is my money when investing?

The safety of your money when investing depends on several factors, including the type of investment you choose, the financial institutions you work with, and your risk tolerance.

Since we are talking about forex trading investment here, I will keep our focus on managing this form of investing.

Here are some key considerations to keep in mind regarding the safety of your investment:

Trading Risk:

Trading of Currencies has potential risks, just like it has potential rewards. However, traders have the opportunity to manage the risk associated with investing through readily available trading tools. An example is the stop-loss and profit target orders that allow traders to cut short their losses and run with the winners. Thus, traders should learn, understand, and apply risk management effectively.


Spreading your investments across different asset classes can help manage risk. Diversification reduces the impact of a poor-performing investment on your overall portfolio.

Financial Institutions:

In investing, a trader should work with reputable and regulated financial institutions. Be sure to choose well-established brokerages and investment firms. Research their history and reputation before committing your funds. XM remains your best choice when it comes to investment in forex trading.

Risk Tolerance:

Understand your risk tolerance and investment goals. Investments with higher potential returns often come with higher levels of risk. It is essential to align your investments with your comfort level and financial objectives.

Due Diligence:

Before you start investing, ensure to conduct thorough research on the investment opportunity. In addition, learn the potential risks and rewards, and assess whether the investment aligns with your financial goals. For forex trading, you should acquire the skill and practice with a demo account before trading your real money.

Scams and Fraud:

Be cautious of investment opportunities that promise unrealistically high returns or pressure you into making quick decisions. Always verify the legitimacy of investment offers and avoid schemes that sound too inconceivable.

How little – or much – can I invest?

The amount you can invest varies widely depending on the type of investment and your financial situation.

XM allows you to begin trading for as low as $5 only.

Thus, you can start with as little as $5 and as much as millions of dollars, depending on what you can afford to trade with.

What is Crypto CFD trading and how does it work?

Crypto CFDs allow you to profit by speculating on the price of some cryptocurrencies without spending much of your money to buy those cryptocurrencies.

Cryptocurrency CFDs are traded in pairs, like BTC / USD, ETH / BTC, LTC / USDT, etc. When you trade in CFDs, you bid on how the first currency will move against the second.

You can speculate on a price increase (go long) or price decrease (go short). If the price changes in your direction, then your trade will result in profit. You register a loss if the price moves in the opposite direction.

As CFDs are leveraged, you only need to invest a small percentage of the trade amount to open a position. Leverage refers to using borrowed money to trade or invest in an asset.

When you purchase a CFD, you only need to invest a small percentage of the trade amount (known as the margin) while the provider loans you the balance. However, your profit or loss is calculated on the entire trade, not your margin amount. Thus, leveraged products like CFDs can magnify your profit and your loss.

How does cryptocurrency CFD trading work?

Cryptocurrency CFD trading allows you to speculate on the price movement of a cryptocurrency by investing a small amount of your capital. The amount you pay for a CFD is called the margin. It is a percentage of the actual price of the cryptocurrency you are buying.

Here is an example to help you understand this better:

Assume the price of Bitcoin is $100. If you engage in traditional trading, you must spend $1,000 to buy 10 Bitcoin. These coins would then be your property. Thus, you could do what you want with them.

CFDs work differently. A CFD is not a coin but a contract you open with the exchange platform. The exchange will list a Bitcoin CFD pair (assume it is BTC/USD) at a margin, which is a percentage of the actual price of a single Bitcoin. For this example, let’s assume the margin requirement to be 20 percent, which means you need to pay 20 percent of the actual price of a single Bitcoin to open a single BTC/USD contract. Accordingly, you’ll need to pay $200 to purchase 10 BTC/USD CFDs, which is 20 percent of $1,000, the actual price of 10 Bitcoin.

When you buy CFDs, you need to take a long or short position, which means you need to bid on whether the underlying asset will increase or decrease in value, respectively.  If the price moves in the direction you predicted, you can receive 100 percent of the gains, even though you only invested a percentage of the total price of the trade.

CFDs magnify your returns by allowing you to trade on the margin. However, margin trading also magnifies your losses as they are calculated on the complete trade’s value (instead of the margin percentage).

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The information contained on this website is provided on an “as-is” basis, as general market commentary, and does not constitute investment advice. Such information is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.