Forex Trading in South Africa
History of Forex Trading in SA
Foreign Exchange Trading, or better known as Forex trading, is a process through which one currency is being changed into another one. So, when you are trading Forex, it means that you are selling one currency, while, at the same time, you are buying a new one.
Representing one of the largest financial markets in the world today, it has a daily turnover of $6 trillion. Forex trading represents one of the most unique and productive opportunities for traders around the world. Stock trading in South Africa has become very popular, which ensured the successful future of Forex trading.
Other than that, in recent years, it has been proven that this can be a great source of income for successful investors. The most fascinating thing is that as it is very popular among major nations of the world, it operates successfully between smaller markets as well.
One of the things that makes the Forex market so popular is that it generally revolves around eight major currencies in the world. What this does is that it allows traders to focus more on a smaller number of options, unlike the other existing markets.
For example, markets like crypto and the stock market have tens and thousands of various investment options traders are able to choose from, which could be a major disadvantage for beginner traders.
Forex industry shows constant development with its daily growing, it brings more and more opportunities to the world of traders, and for South Africans in particular. As it is one of the fastest-growing industries around the world, many investors are willing or already signing up for Forex trading in South Africa.
Forex Trading South Africa has a long-lasting and successful history, starting from the 1980s. In the last years of the decade, the market has experienced exceptional growth, becoming comparable with leading Forex markets, including the United Kingdom, Canada, Japan, and even the U.S.
The growth that the market experienced was almost as much as 23.5% per year, while in the biggest markets the growth was 30%.
Many years have passed, and in recent years, the South African Forex market has managed to grow to be one of the leading markets in the world. Though it functions slightly differently from other markets, the basic principles of Forex trading remain to be the same as in the biggest markets worldwide.
How does Forex trading work in South Africa?
If you are interested in how Forex trading works in South Africa, the easiest way we could describe it is by saying one very important and noticeable feature of the Forex in South Africa, which is that it is under the influence and control of South Africa’s central bank.
The nation’s currency of SA is Rand (ZAR), which is ranked 20th by the Bank of International Settlements as currencies traded in the Forex market.
The rising economy and population of 50 million in South Africa make the country’s Forex trade attractive to not only South Africans but also for foreign traders. Trading in South Africa is becoming more and more popular every day.
However, traders who decide to base in South Africa should be aware of several elements that are unique to the country.
The first thing is taxation. Trading profits for individual traders who are operating within the country are taxed by the South African Revenue Services (FSCA) just like regular income. It depends on how much profits are generated, but it can vary from anywhere between 18% and 42%.
The second thing that one needs to keep in mind for Forex Trading in SA is the regulations. First of all, Forex trading is completely legal, as long as you are willing to declare your income tax and you accept the laws that prevent money laundering.
The financial sector in SA, including Forex trading, is controlled by the FSCA. Forex traders approved by the FSCA are required to maintain client funds in segregated accounts and remember that the distribution of your details to third parties is also forbidden.
Tips for becoming Forex Trader in SA
If you are wondering how to become a Forex trader in South Africa, there are few tips that you must keep in mind. You will need to complete the KYC paperwork before signing up for a Forex Trading Account and before being allowed to make a deposit. This is law is set to stop money laundering by anonymous actors. It is fairly easy and requires submitting several documents like a colored copy of your ID, either passport, driver license or an ID Card. You will also need one recent utility bill, which was issued in the past three months and can confirm your home address.
Legally funding Forex account in South Africa is fairly easy if you are using a credit card that is connected with a major bank.
There are other ways to get funds offshore, like applying for discretionary foreign currency allowance, available up to 1 Million Rand.
If you need to transfer 10 Million ZAR per year, you need to get permission. For this, your bank needs to submit an application to the Financial Surveillance Department of the South African Reserve Bank for approval. For this to be done, you will also need a tax clearance certificate.
There are several Forex trading tips in South Africa that you must keep in mind.
First of all, understand that Forex trading is nowhere close to easy and you need to know what the right steps are you need to take to achieve some success.
First of all, start by educating yourself. Knowing what Forex trading means is not enough. Try to learn the market better, lookup for companies that work in this field, try to look for their history, look for the mistakes that they have made, so you will know what are the steps that you should not make.
Get a piece of proper knowledge and education before betting your money on such a risky thing. Understand what the consequences might be and only then start working.
Try to avoid smaller time frames. Everyone knows that the best way to master the markets is to use larger time frames. Those who use smaller time frames, most of the time are gamed by more experienced traders who use daily charts and other large timeframes to make their decisions.
Learn to say no to certain things. This tip is very important for Forex trading for beginners in South Africa. Think before making any decisions, and if you think that in any way it does not fit your needs, don’t be afraid to say no.
Learn the difference between the risks that are worth taking and risks that won’t have any outcome. Try to risk as little amount of many as you can, a great rule is that you should not risk more than 2% of your total budget.
Also, keep in mind that if you work hard, you can make anything happen. Start by creating a demo account with some platforms that offer them, so that you can start trading without too many risks.
On the other hand, the odds of losing your account are small if you use this same approach and cost less than 2 percent per deal. Risking less than 1 percent will reduce your chances of having an account wipeout to zero for practical purposes.
If you really want to know how to trade Forex in South Africa, keep in mind that no matter how hard it might sound, try to control your emotions. Think like a machine, like a robot. Try to think about what is better for you and why what does it give you in the end. Try to keep your emotions turned off while thinking.
It is also very important to find a way to get as much information as possible, so look for many interesting Forex news agencies, South Africa. Make sure that your information is up to date.
And in the end, try to enjoy the process. Yes, you should think like a machine, but it does not mean that you should not enjoy the process. While not having to make risky decisions, be proud of what you have achieved so far and try to focus on the good things that have happened to you along the way.
Forex Trading apps in South Africa
There are some trading platforms and Forex trading apps in South Africa. One of the ones great for the beginners is eToro, for example. This is the only leading trader offering a social trading network in South Africa.
Plus500 represents one of the most advanced platforms, which, at the same time is very easy to use. This platform is known as an innovative leader in the industry.
AvaTrade is also known as one of the best Forex trading apps in South Africa, that offers a range of different trading platforms. They also offer 50 of the world’s most popular currencies, ranging from majors and minors, including South African Rand.
As it was mentioned before, it is very important to make sure that you have enough knowledge in the field before you start Forex trading.
As you have already got familiar with the basics of Forex trading, now try to focus on the knowledge that you need to have.
Forex Trading courses offered in South Africa
There are several Forex trading courses in South Africa. There are several colleges that you can look up on the internet that offer great courses, you can even try to start out on YouTube. There are several videos on the basics of Forex trading that might be helpful for you.
Stock Market College is one of those facilities that offer courses in this field. After compilation of the Financial Markets Education course, you should have the necessary knowledge needed to trade the markets.
There are also Professional Forex Trading Courses, which represent the online trading South Africa course. Here, you will be able to learn how to trade Forex with our professional online video courses. The step-by-step courses make sure that you are ready to start trading after compilation.
Other than being one of the biggest Forex trading countries, South Africa remains to be one of the greatest trading partners for many countries. In recent years, the country has been able to keep up with the developed world and develop one of the most important parts of their economy.