01 · Level 1What you press, what it costs, and where your money actually sits. Fifteen lessons, each one answering a question a first-time account holder asks.
Basics: how a trade and an account work
- 1.1
What happens when you press Buy
An order leaves your platform, gets filled at a price, becomes an open position, and ends when you close it. Four steps, and every cost attaches to one of them.
- 1.2
Pairs and quotes: what 1.0850 means
A quote is the price of the first currency in the second. The number you see moves in the last decimal place, and that place has a money value.
- 1.3
What a pip is worth in money
A pip is the smallest standard price step. What it is worth depends on lot size and the pair, so the same twenty-pip move pays differently on different trades.
- 1.4
Lots: standard, mini and micro
A lot is how much of the instrument one trade controls. Standard is 100,000 units, mini is a tenth of that, micro a hundredth.
- 1.5
The three costs: spread, commission, swap
You pay the spread on entry, commission on some account types, and swap for every night a position stays open. All three are known before you trade.
- 1.6
Overnight swap and swap-free accounts
Swap is the daily cost of holding a leveraged position. A swap-free account removes it and usually replaces it with another charge.
- 1.7
Leverage and margin: how much of the trade is yours
Leverage sets how large a position your deposit can hold. Margin is the part of your money locked against it while the trade is open.
- 1.8
Order types: market, limit, stop
A market order takes the current price. A limit waits for a better one. A stop triggers once price reaches a worse one.
- 1.9
Stop loss and take profit
Two instructions you attach to a position: one closes it at a loss you chose in advance, the other at a profit you chose in advance.
- 1.10
MT4, MT5 and cTrader: which to pick
The three platforms differ in instruments, order handling and how they report costs. The choice is reversible; the account type behind it is less so.
- 1.11
Trading from a phone
The phone app does everything the desktop one does except show you enough chart. What that changes about your decisions is the lesson.
- 1.12
Demo accounts: what they teach and where they lie
A demo teaches the platform and the arithmetic honestly. It cannot teach fills in a fast market, and it cannot teach how losing real money feels.
- 1.13
Account types: standard, raw spread, cent
The same trade costs different amounts on different account types. Raw spread accounts move the cost into commission rather than removing it.
- 1.14
Opening an account and passing verification
What documents a regulated broker has to ask for, why it has to ask, and the checks that hold an application up.
- 1.15
Deposits and withdrawals with local methods
Which local payment methods reach a broker, how long each leg takes, and why a withdrawal usually has to go back the way the deposit came.
What the first level actually delivers
By the end of these fifteen lessons you will be able to place a trade of your own on USD/ZAR, read the price around 18.4100 and know what the two numbers on either side of it mean. You will know what leaves your account when you press Buy, and what comes back when you close. That is the whole aim. It is not to make you profitable. It is to make you literate in the mechanics, so that nothing on the screen is a mystery.
The ideas build in a fixed order. First you learn what a trade is: a pair, a quote, a direction. Then you learn the units those prices move in, which is where the pip and the lot come in. Only after that do costs, leverage and order types make sense, because each one is expressed in pips and lots. If you skip to leverage on day one you will be calculating margin on a position size you cannot yet define.
What trips people up in this stretch is not the arithmetic. It is the assumption that the platform is doing something clever on their behalf. It is not. It is passing your instruction to a broker, who is matching it or taking the other side. The second common trip is treating a demo balance as practice for the real thing. It is practice for the buttons, not for the feeling of money leaving.
Where your money sits and what it costs to move it
When you deposit by EFT, instant EFT or bank card, the money leaves your bank and arrives in an account held by the broker. It is not held by the platform you installed on your phone. The platform is a window. The broker is the firm regulated by the FSCA, and the rand balance you see is a record of what that firm owes you. If the broker fails, your claim is against the broker, not against the software.
Costs arrive in three places and nowhere else. The spread is the gap between the buy price and the sell price on USD/ZAR, and you pay it the moment you open. Commission is a separate charge on some account types, quoted per lot. Swap is a small credit or debit for holding a position overnight, and it varies between brokers, so no single figure applies. A swap-free account removes that overnight charge but usually widens the spread instead, which means you pay in a different place.
Withdrawals follow the same route back. South African brokers generally return funds to the method used to deposit, and processing times vary between brokers. The one thing you can control is verification. An unverified account can take deposits and cannot release them. Complete the identity and address checks before you fund anything, because a locked withdrawal is the most common first-month complaint and it is almost always a paperwork problem, not a trading one.
How long it takes and how to tell you are ready to move on
Honestly, this level takes about six to eight hours of reading and screen time, spread over a week or two. That is not a figure anyone can compress by reading faster, because part of the work is watching a live USD/ZAR chart long enough to see the spread move and a position go into overnight swap. Fifteen lessons at twenty to thirty minutes each, plus a demo account left open in the background, is the realistic shape of it.
You are ready to leave this level when you can do four things without looking them up. Place a market order with a stop loss and a take profit attached. Say what one pip on one micro lot of USD/ZAR is worth in rand. Explain why your margin requirement changes when you add a second position. And name the three costs you will pay on a trade held for two days. If any of those four is still fuzzy, repeat the lesson that covers it rather than pushing forward.
The most common mistake at this stage is opening a live account to test whether you understood. Do not. The demo account exists precisely so that the first time you see a losing position you are not also learning how the withdrawal page works. The second most common mistake is choosing a platform before choosing an account type, when the account type determines the costs and the platform is only the interface. Get the account right first.
Doing it once, step by step
Work through these six actions in order, once, before you start the lessons. Each one takes minutes and removes a problem you would otherwise meet later.
- 01
Open a demo account with a broker regulated by the FSCA
Choose a broker that states its FSCA licence on its own website rather than a review site. Register a demo account in your own name, not a nickname, because you will use the same details later for a live account. Fund it with the virtual balance the broker provides and note which account type it mirrors. Do not deposit real money at this stage.
- 02
Find USD/ZAR and read the quote aloud
Open the chart for USD/ZAR and locate the current price, which will sit near 18.4100. Say it as eighteen rand forty-one cents to the dollar, and identify which side is the buy and which is the sell. Watch the two numbers for a full minute and note how often they change. This is the instrument every example in the level uses.
- 03
Place one micro lot trade with a stop loss
Buy one micro lot of USD/ZAR and immediately attach a stop loss twenty pips below your entry. Then attach a take profit twenty pips above it. Watch the position for ten minutes without touching it. Close it manually and write down the profit or loss in rand, then compare that figure with what the lesson on pip value told you it should be.
- 04
Hold a position overnight to see swap
Open a second micro lot trade late in the afternoon and leave it open past the broker's daily cut-off time. The next morning, look for a separate line on the account statement labelled swap. Note whether it is a credit or a debit and how large it is in rand. This is the cost that a swap-free account removes, usually in exchange for a wider spread.
- 05
Check the deposit and withdrawal methods before you need them
In the broker's funding section, find EFT, instant EFT and bank card, and read the stated processing time and any fee for each. Find the withdrawal page and confirm which method it returns funds to. Then locate the verification requirements and list the documents named. Knowing this now prevents a locked withdrawal later.
- 06
Write your own one-line answer to the level's central question
In a notebook, write what happens to your money from the moment you press Buy on USD/ZAR to the moment you close the trade. Include the spread, any commission, and any swap. Keep it to one sentence. If you cannot write it without checking a lesson, you have found the lesson to repeat before moving to level two.
Questions that come up next
If I deposit R5 000 by instant EFT, is that money mine until I open a trade?
Yes. The rand balance in your account is a record of what the broker owes you, and it sits there untouched until you place an order. Opening a trade does not move the whole balance anywhere. It sets aside part of it as margin, which is a deposit against a position, and the rest stays free. The margin is still yours, but it is committed while the trade is open. Close the trade and the commitment is released.
What does the price 18.4100 on USD/ZAR actually tell me?
It tells you what one United States dollar costs in rand at that moment. The first number is what you pay to buy the dollar, the second is what you receive if you sell it, and the small gap between them is the spread. If the quote reads 18.4100 on one side and 18.4120 on the other, the spread is 20 points. That gap is a cost you pay on opening, not a fee charged later.
Can I lose more than the money I put in?
That depends on the broker and the account terms, and it varies between brokers, so check the documents before you deposit. With leverage, a small move against you can wipe out the margin behind the position quickly. Many brokers offer negative balance protection, which means you cannot end up owing money, but it is not universal. Ask the question directly rather than assuming.
Do I need to verify my identity before I can withdraw?
Verification comes before withdrawal, and it is the step most people leave too late. You send proof of identity and proof of address, the broker checks them against FSCA requirements, and only then does the account accept a withdrawal request. Doing it on the day you want your money back adds days you did not plan for. Complete it when you open the account.
Is a demo account the same as trading with real money?
It teaches the buttons, the order types and the layout of the platform, and for that it is useful. What it does not teach is the feeling of money leaving your account, because the balance is not real and the loss costs nothing. People take risks on a demo they would never take with R5 000 of their own. Treat it as practice for the mechanics, not for the decisions.
How long does level one take to work through?
Fifteen short lessons, and most readers get through them in two to three evenings if they read and try each idea on a demo as they go. Rushing it in one sitting is possible but the costs and leverage lessons will not settle. Give the pip and lot lessons a day apart from the leverage lesson. The arithmetic is simple, but it needs to become automatic before it is useful.
The words used on this page
- Spread
- The gap between the price you can buy at and the price you can sell at. You pay it the moment you open a trade, and it is the first of the three costs.
- Pip
- The smallest standard step a currency price usually moves in, shown in the last decimal place of the quote. On USD/ZAR around 18.4100, one pip is a move of 0.0001.
- Lot
- The standard unit for measuring how big a position is. A standard lot is much larger than a mini lot, which is larger than a micro lot, and the size decides what one pip is worth in rand.
- Margin
- The part of your balance set aside as a deposit while a trade is open. It is not a fee and it is not spent. It is committed, and it is released when the trade closes.
- Swap
- A small credit or debit applied when you hold a position overnight, calculated from the size of the position. The amount varies between brokers, so no single figure applies to everyone.
- FSCA
- The South African regulator that licenses the firms offering these accounts. The broker is the regulated firm, not the platform software you install on your phone.
What to take away
- You can place a trade on USD/ZAR, read the quote around 18.4100, and say what the two numbers on either side mean.
- Costs come from three places only: the spread, commission on some account types, and swap on positions held overnight.
- Your money sits with the broker, not the platform, and withdrawals go back by the same route you deposited through.
- Verification is done before you need it, not on the day you want your money back.