Forex trading in South Africa has increasingly become popular. Both local and global brokers there are trying to attract South African traders and encouraging them to deposit funds and start trading. As forex trader in South Africa, it is recommended for you to choose brokers who are regulated by the financial services board (FSB). This will ensure that your funds are safe and entirely secured. Nowadays, forex trading in South Africa seems to be given much attention by most traders and investors. So what is the biggest deal in trading with forex? Why has South Africa started practicing it? Well, let’s read through this article and probably answer these and more questions.
WHAT IS FOREX TRADING?
Forex trading is also known as currency exchange or foreign exchange is simply a global market for the buying and selling of currencies. Forex trading is the largest liquid market with the highest trading volume in the world. This actually means that even the stock markets do not come close to it in terms of trading volume
HOW DOES FOREX TRADE WORK?
Forex traders are always keen on the currency rates. Like any other form of speculation, they normally buy a currency at a certain price and sell it at a higher price in order to make a profit. The good thing with forex is that you can trade it easily; if your currency is increasing in value, then you buy it and if it is decreasing in value, then you will have to sell it.
FOREX SOUTH AFRICA AND WHY IT IS BECOMING POPULAR.
Over the past decade, forex trading has massively grown and currently growing in the market for its ease of access to the market. The currency market has been giving traders in South Africa and across the globe the access to trade different currencies with ease. South African forex traders are specifically interested in trading the rate between the US dollar and their South African Rand.
THINGS TO KEEP YOU GOING WITH FOREX.
• Firstly, you have to align your personal goals and instruments with the market you want to relate to comfortably.
• Bear in mind that substantial money in the market may come with either losses or profits, so you have to trade more frequently.
• Try to set a system to check whether your profits are consistent and if you have more profits than losses then consider it reliable and a winning strategy.
• Develop a mindset to reflect on patience, discipline, objectivity and realistic expectations, knowing that you won’t reach your anticipated price point without following these rules.
Like any other trading activities, forex trading has its advantages and disadvantages as well and they are discussed below.
ADVANTAGES OF FOREX TRADING.
• Forex trading is the most accessible and readily available form of trading in the market.
• It can be done through online platforms with access to market pricing, tools, news and price charting.
2. Fast returns.
• There is potential for fast returns in the forex market compared to other markets.
• You can start with a low capital and gain profits in return.
• With constant supply and demand for money, forex remains the most liquid market in South Africa.
• You can trade freely with the forex market since you don’t have to schedule for closing or opening hours.
4. Availability of the demo account.
• With forex market, you can be able to preview the services offered by the forex brokers, test your knowledge and then decide when to start.
5. Short trading
• This means that you can sell currencies like the South African rand over the US dollar without having them and this is so amazing.
• Leverage is the most important thing in forex trading. As a forex trader, you can actually sell up to 500 times more the currency you have.
DISADVANTAGES OF FOREX TRADING.
1. High volatility
• Like other markets, forex can also show volatility at one time or another.
2. Risk factor
• One has to be very knowledgeable and focused on the uncertainty in price and rate which ultimately gives either high profits or huge losses.
3. The unpredictable market.
• The forex market is a 24/7 market and investors keep investing money where the trend keeps updating which results to an unpredictable market at any hour.
• It is very important for an investor to identify a trustworthy and reliable person to work with since there are a lot of scammers waiting to loot money.
FOREX TRADING REGULATIONS IN SOUTH AFRICA
Forex trading has become more popular in South African residents and it has turned out to be like a full-time job. It is equally legalized by the government of South Africa but you have to consider some limitations. The South African Rand (ZAR) is not very common in the forex market but it is a huge contributor to the country’s economy.
Be careful if you want to use the services of a South African broker when starting a forex exchange career. A lot of unlicensed people with fake software are after your money, so you have to take note on this. You can spot this by checking if past client for the specific broker has left reviews of complaints regarding customer services or withdrawals.
Sandile Shezi, a South African forex trader rose to be the youngest and newest millionaire at the age of 23. He started from the door-door selling of clothes to the world’s largest global investor after reading about forex trading online.
Mike Ndlovu, the founder of IFBS Forex Trading Academy & Well-Made-It-SA, is recognized as a forex trader and a trainer with several years of trading experience. He is one of the successful forex traders based in Cape Town South Africa and his success story inspires a lot.
So you are a broker in the forex South African market, understand that there are limits on the amount of money you can deposit into your account. But you don’t have to get scared about the limits since they are too high. If you decide to take part, you won’t have made a mistake. Follow the guidelines above, and you are good to go.