How to trade forex and commodities

Rowan asks: I want to know more about trading with forex, oil, platinum and gold. How does it work and what are the risks?

Maya replies: Foreign exchange and commodities are probably the most risky sectors to trade simply because they are driven more by sentiment than fundamentals. With share investing there is more tangible information like earnings and profits and relative valuations to work with.

There are a lot of speculators in these markets and you never know what is going to drive the price on any day. There are jokes (although apparently there is truth in it) that traders will trade according to which way the wind is blowing!

Many of them make their money out of novices so it is a good idea to start off with a small amount of money that you are willing to lose in order to learn and develop your own trading model.

I spoke to Simon Brown, who was involved with Standard Bank’s online trading. Standard Bank offers quite a few instruments that allow you to trade in forex and commodities.

He has the benefit of having seen many traders come and go. His response is that “forex trading is high risk and really at the top end of trading and shouldn’t be attempted until one is already skilled in trading other products or assets”.

Now that we have got the health warning out the way, here are your options:

  • Currency futures which are listed on the JSE Yield-X board and currency warrants listed by Standard Bank (
  • Oil, platinum and gold can be bought via exchange-traded funds (ETFs) such as Absa’s New Gold (
  • Standard Bank’s commodity warrants (Read the related article: “How trade platinum warrants”).
  • Standard Bank Exchange Traded Notes (ETN), which give you exposure to gold, silver, platinum and palladium.
  • RMB has a new oil ETN.
  • Commodity futures listed on the JSE Safex board, but these would be higher risk.

As a starting point Brown suggests investing into Exchange Traded Funds and Exchange Traded Notes as they are less risky. They don’t have gearing, so in other words you are not borrowing money to buy the listed asset and your potential losses are lower.

Read more news, blogs, tips and Q&As in our Smart Money section. Post questions on the site for independent and researched information.


Workers fight job-creation ‘mess’

Former Ekurhuleni workers argued in court that a programme promising to equip them with skills simply acted as a labour broker for the municipality

Court dissolves local municipality

Landmark judgment paves the way for South Africans to use legal system to hold councils responsible

Mabuza’s ‘distant relative’ scored big

Eskom’s woes are often because of boiler problems at its power plants. R50-billion has been set aside to fix them, but some of the contracts are going to questionable entities

ANC faction gunning for Gordhan

The ambush will take place at an NEC meeting about Eskom. But the real target is Cyril Ramaphosa

Press Releases

New-style star accretion bursts dazzle astronomers

Associate Professor James O Chibueze and Dr SP van den Heever are part of an international team of astronomers studying the G358-MM1 high-mass protostar.

2020 risk outlook: Use GRC to build resilience

GRC activities can be used profitably to develop an integrated risk picture and response, says ContinuitySA.

MTN voted best mobile network

An independent report found MTN to be the best mobile network in SA in the fourth quarter of 2019.

Is your tertiary institution is accredited?

Rosebank College is an educational brand of The Independent Institute of Education, which is registered with the Department of Higher Education and Training.

Is your tertiary institution accredited?

Rosebank College is an educational brand of The Independent Institute of Education, which is registered with the Department of Higher Education and Training.

VUT chancellor, Dr Xolani Mkhwanazi, dies

The university conferred the degree of Doctor of Science Honoris Causa on Dr Xolani Mkhwanazi for his outstanding leadership contributions to maths and science education development.

Innovate4AMR now in second year

SA's Team pill-Alert aims to tackle antimicrobial resistance by implementing their strategic intervention that ensures patients comply with treatment.

Medical students present solution in Geneva

Kapil Narain and Mohamed Hoosen Suleman were selected to present their strategic intervention to tackle antimicrobial resistance to an international panel of experts.