Forex trading is an exponentially growing market in South Africa. New traders are stepping into the market each day. South African market is the fastest-growing market in the world.
We will talk about the subject “How does Forex trading work in South Africa?”
The South African Forex market is at a tricky spot currently. Hence, we suggest traders educate themselves before doing Forex trading.
How does Forex trading work in South Africa? – Introduction
Forex trading is a 24-hour trading market. Forex is available across the globe for traders. The market is open all week, except for the weekend.
In South Africa, the market is very active. Hence, there can be a few deviations from the international market. We will address the basics and give our readers a few useful tips about the Forex market.
Let’s see, how does Forex trading work in South Africa?
Getting started in the Forex market is the most important step for any trader.
You need to have some spare money to start Forex trading. We recommend that you only invest the amount that you won’t need. However, at least 10-15 thousand ZAR should be enough to get you started.
Learning the market
A trader needs to learn the market shifts and trends. The Forex market is volatile, and a lot of factors depend on it. Hence, we suggest spending maximum time educating yourself.
The Forex market in South Africa can be accessed through four different sessions.
Picking up the right session according to your trading needs is important. These four sessions are;
- New York
New York session is best for USD based trading. However, overall London session is the most active session. Tokyo session is good if you are trading in Yen.
Brokers are intermediate linkages between the market and a trader. A broker allows you to select pairs on Forex and invest in your favoured estimates.
Selecting a broker is the first step to getting you started. The forex market in South Africa largely depends on brokers.
Brokers have also marketed Forex very actively.
Brokers offer leverage to traders to initiate trades. Leverage rates provide exposure to trade on a Forex exchange.
Let’s say a broker offers 1:400 leverage; it means that you can open a trade 400 points over your deposited/trading money.
Keep in mind; higher leverage rates lead to higher profit and higher loss percentages. Similarly, low leverages return low losses and profits.
In South Africa, the government has a few financial authorities to look over the brokers. FSCA is the government’s watchdog that ensures brokers function under the law.
Brokers have to elaborate their schemes to the traders. Additionally, FSCA forces the brokers to keep the traders’ money in local and ZAR accounts.
In case the broker goes bankrupt, the government provides backup and restores the trader’s funds. However, there are reports of scam brokers that slip through the government’s grasp.
The forex market in South Africa is well-structured. Brokers and traders work together on the Forex platform to trade and earn profit. Market opening times listed in GMT time zone is an import tool to stay updated with every changing time zones due to daylight savings.
That wraps up our review of the topic, “How does Forex trading work in South Africa?”