Forex Trading also referred to as the ‘currency trading,’ ‘FX market’, ‘Foreign exchange currency market’ or ‘currency market’, is increasingly becoming popular in South Africa. Forex is the world’s biggest financial market with an estimated turnover of $5.3 trillion. Through forextradingsouthafrica.co.za we guide South African forex traders, investors and entrepreneurs who are interested in making money through Forex Trading in South Africa.
Getting started with forex trading South Africa and making money online is easy. Foreign exchange market is always about currency pairs. Trading comes in pairs, like USD/EUR, GBP/USD, USD/ZAR, USD/JPY, etc. Everyone in South Africa can become a successful trader in forex, all you need is to open an account with a forex broker and start trading. Foreign exchange trading or currency trading is by far the world’s most-traded financial market.
List of best forex trading websites in South Africa for 2019
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If you are not sure about your trading skills, you can open a forex demo account where you will practice with virtual or fake money until you gain your confidence. A demo account is also called a ‘practice account’.
You want to trade forex in South Africa and don’t know how to trade? In this forex guide, you will learn:
- How to find the best forex broker in South Africa
- How to trade forex in South Africa
- How to choose forex trading account type
- How to determine your trading strategy
- How to open a Forex Trading account in South Africa
Finding a good Forex broker in South Africa
When you want to invest in Foreign Exchange, you need a South African forex broker who will be your interface with the market even if it’s done via online trading platforms. The currency exchange market is indeed an interbank market, trading place between the major international banks and a virtual meeting for traders sharing the same interests.
When you find a broker you are interested in opening an account with, open a demo account and see how their trading platforms work. Read reviews from various sources to see if they are real and regulated in your country. You can also use Google to search the broker online. Forex forums are another place where you can get feedback from people who are already trading with broker. They share both bad and good experiences with various South African forex brokers.
How to trade Forex in South Africa
Before you start trading forex, you need to decide which currency pair you wish to trade. As identified by Forex Trading SA, there are over 65 currency pairs to choose from. You then decide on the type of FX trade, whether CFDs, Commodities or Forex. After you have decided what you want to trade, you can buy or sell currencies.
Forex is traded in pairs, this of USD / ZAR, USD is the base currency and ZAR is the quote currency. For example, One US Dollar costs R13.41. Imagine you buy 1 000 US Dollar and you pay R15 910 ZAR. Later that day, the USD rises. When you close your position by selling the USD 1 000, you will receive ZAR 16 160. Meaning you will receive a profit of ZAR 250.
But imagine if the USD decreases later that day, when you close your position by selling the USD 1 000, you will then receive ZAR 15 660, losing ZAR 250.
Things to learn through Forex Trading South Africa website:
Our website educates forex investors in South Africa about the importance of forex, gives reliable updates and recent information about forex news. We also guide you through the following:
- We help traders become successful forex traders in South Africa
- Give out all the necessary information you need to know before you start trading forex
- Provides forex trading reviews for South Africa traders
- We give information on how to trade forex in South Africa
- Learn about the currencies you trade
- Recommend the best forex trading platforms in South Africa
- The importance of forex education
- Learn about forex bonuses and promotions in SA
- Recommend top forex trading websites in South Africa
How to determine your forex trading strategy
- Technical trading – most FX traders in the world use charts to learn forex trading and determine whether to enter or exit the currency trading trades. Technical traders refer to paying attention to price patterns. By paying attention to charts and weighing price, volume, volatility and timing, it is possible to find patterns that point out opportunities. For example, if the price of a currency does not fall or rise but frequently reaches a certain value, it is said to be in a stable position or found a resistance level. Many successful forex traders in South Africa tend to take advantage of it and take a position in order to sell or buy. This forex trading strategy works well for some traders.
- Fundamental trading – this refers to focusing on elementary indications of economic health. In this forex strategy, supply and demand for a currency choose the price. Most SA currency traders look at the central banks’ interest rates to determine which way the market might shift to.
Strategies for part-time forex traders
Not every trader is available to trade full time. In fact, some successful South African forex traders make their trades during lunch at work or at night when they come back from work. Trading forex from time to time makes people to miss opportunities to buy or sell currencies. Also, these missed trading opportunities might cost the part-time trader some serious money.
There are some forex trading strategies designed for part-time traders and they work based on a part-time schedule. For example, if you know that you only trade forex at night, you must employ a strategy that works best at night. There are certain currency pairs that are most active at night. A good example can be the American dollar (USD)/ Japanese yen (JPY) pair. When choosing a pair, it is crucial to analyse them and implement a forex trading strategy which will help you trade successfully.
Part-time trading comes with challenges and one of them is limitation. Unlike day trading customers, you will have to stick to a trading schedule which you follow every-day. Below are strategies for part-time traders who have an incoherent schedule:
Stop loss orders in trading forex
One of the best strategies for a part-time forex trader is to monitor the price movement. Use your PC or laptop as your trading partner. There are foreign exchange trading programs designed to help you stop loss orders. This means that the program will alert you if the price movement drops or move against your position. This strategy also protects your money should the FX market works against you.
Know your FX markets
For example, you have a nine to five job every-day. The best time to trade is before you go to work and when you come back from work. The best strategy is to choose time with the most price action. Know which currencies are most active. Knowing the right time and most active currency pair will lead to you benefiting a lot from forex trading.
Price action in forex
It is also important for part-time traders who trade now and then to implement a price action strategy. Analysing charts of currency pair is called “price action trading”. For instance, forex traders take a look at down bars and up bars which help them determine what the right time to close a position is.
What is a Pip in forex?
Pip is an acronym for “percentage point” or “price interest point”. Pips are the smallest possible variation of a course anytime. When a currency pair increases or decreases, its movement is measured in pips. For example, if ZAR/USD moves from R13.36212 to R13.36321, it has moved a single pip. Pips are the fourth decimal place of the currency pair. But currency pairs that are calculated in hundreds, the pips is the second decimal place. A good example will be R13.36
How to open a Forex trading account in South Africa
Before you open a forex trading account in South Africa, you must decide on which account you need. FSB Forex Brokers in South Africa offer different types of accounts and they are:
- Demo accounts – Demo or practice account, uses fake or virtual money. Demo accounts are for training purposes. If you are a forex beginner, you need to practice with demo before trading with real money.
- Cent Accounts – have a minimum deposit of $5 (+/- R80), Spreads from 1.5.
- Standard Accounts – have a $100 minimum deposit (+/- R 1,400), Spreads from 1.3.
- Micro Accounts – require a minimum of $100.
- Mini Accounts – this type of accounts does not require clients have a minimum amount. Some brokers recommend mini accounts for beginners. It has loose spreads.
- ECN Zero Accounts – require a minimum deposit of $500 and provide 0-pips spreads in exchange for transaction fee. Some experts don’t recommend this type of forex account for beginners; only experienced traders with sizable assets can choose it.
- Premium Accounts – have a $2,500 minimum deposit. Premium accounts give traders access to a wide range of expert advisors and auto-trade benefits.
- VIP Accounts – require a minimum deposit of $20,000 or more.
After you have decided which forex account you wish to choose, you can sign up an account with a broker. After signing up, the broker will verify your information through a phone call and you will also be required to submit supporting documents such as copy of your ID.
Forex Market Trading Hours
Forex trading works 24/7 and 5 days a week except for the weekends. The main trading centres are in New York, Tokyo, Hong Kong, Paris, Sydney, Frankfurt, Zurich, London and Singapore. However, banks across the globe also participate in trading.
- Sydney Open – 7:00 AM Sydney Close – 4:00 PM (US Time)
- London Open – 8:00 AM London Close – 4:00 PM (US Time)
- Tokyo Open – 9:00 AM Tokyo Close – 6:00 PM (US Time)
- New York Open – 8:00 AM New York Close – 5:00 PM (US Time)
Frequently Asked Questions About Forex Trading
Get answers to the most frequently asked questions about forex trading, forex for beginners, forex trading education, trading strategies, currency trading, forex markets, and foreign currencies.
What is forex?
Forex or FX stands for Foreign Exchange (Exchange Currencies).
What is forex trading?
Forex trading is an act of you buying foreign currency at bid price and selling it at higher price in future to make profit. Forex Market is the place where one can trade in currencies. Price of one currency is always determined in another currency because you always buy one currency using another currency. For example you trade in ‘currency pair’. The price is always given as USD/INR, USD/ZAR, GBP/USD, etc. using Standardized Currency Code.
What is the best stock trading website for beginners?
Well, Forex Trading South Africa only recommends our forex trading SA partners’ websites. They are more trustworthy and reliable. You can also use their demo forex accounts to practice using virtual money before using real money.
What is online trading and how does it work in South Africa?
Buying and selling stock or anything online is referred to as “online trading”. Forex brokers in South Africa buy and sell stock online through forex investment and they charge people a commission. To become a South African forex broker, you need to have a license that permits you to trade stock through exchange.
Is it safe to trade online in South Africa?
Yes, it is safe to trade online in South Africa. In fact, make sure that the broker’s website is secured with an SSL Certificate to avoid your information being stolen or leaving your sensitive information on the website. Nonetheless, we recommend you trade with trusted forex companies. Do your research to find out if the company is legit and not just some online scam.
Is currency trading legit?
Currency or trading forex is real and legal in South Africa. However, some people come up with forex trading scams. South African forex regulators work day and night to eliminate scammers who rob people their hard earned money through forex investment.
Is forex trading in South Africa legal?
Forex trading in South Africa is legal as long as you follow the laws and regulations of the forex markets to avoid money laundering and you provide your income tax.
What is a binary options broker?
Binary options broker is a person or a company that runs a financial option whereby the payoff is either some fixed economic amount or nothing at all.
Is binary options a gamble?
Binary options in some parts of the world is seen as a form of gambling. Some binary brokers and outlets have been exposed as scams. Some part of financial investments regard binary option as a high-risk.
How do I start investing with little money in forex South Africa?
Well, it’s easy, start by saving every month. Avoid spending your money on unnecessary things. Save with a goal in mind. When you are done saving money, use your savings. Start investing in forex South Africa or binary options little by little. There’s no rush, take your time to avoid risks. This saving strategy works better for forex trading beginners.
How much money do I need to start forex trading in SA?
It depends on the broker in South Africa, fore example, some brokers require you to deposit any amount between $5 and $500 to open your forex account. The quantity you deposit can impact the quantity of leverage you’ll be able to use in your trades, as equity and margin area unit essential in trading forex.
Can you trade South African Rand in Forex?
The answer is yes, forex traders can trade in South African Rands. The rand (sign: R; code: ZAR in Forex Trading) is the official currency of South Africa. Forex traders commonly trade ZAR in South Africa. Some best forex brokers in South Africa pair the Rand with other currencies such as US Dollars, the Great British Pound and Euros. For example, USD / ZAR or GBP / ZAR.
How many times a day can you trade forex?
You can only make five trades per day. You don’t have to overdo it. Furthermore, Forex Trading South Africa can always recommend additional reading. We are here for you.
What is foreign exchange rates?
In forex, foreign exchange rate is the rate at that one currency is going to be changed for another currency. It’s additionally considered the worth of one country’s currency in relevance another currency. Foreign exchange rates can change and there’s no guarantee until payment has been processed. For example, the exchange rate for USD to ZAR is 1 United States Dollar equals to 14,43 South African Rand.
How can one be a successful forex trader in South Africa?
Becoming a successful forex trader in South Africa comes with practice. You cannot wake up today as a successful trader. Do your research, find yourself a mentor (someone who will guide you), develop forex trading strategies and use demo accounts to practice more. Furthermore, if the market is favouring you, take advantage of it. Remember, you also need to teach others so that you won’t forget your foreign exchange trading tips. Sharing is caring.
Is it easy to trade forex in South Africa?
Forex online is easy once you understand how it works. Remember to start off with demo accounts before trading using real money. Also learn different forex terms so that you will know exactly what you are doing. Visit Forex Trading South Africa website at https://www.forextradingsouthafrica.co.za for more information.
How can I learn forex trading and become a successful trader in South Africa?
Forex is just like any other work. There are many forex trading beginner’s guide you can find online. Some brokers also offer free course where you can learn trading jargon.
Who regulates forex in South Africa?
The Financial Services Board (FSB) regulates forex in South Africa. It supervises and regulates the non-banking financial services industry including investment schemes, forex, stock market, financial advisors and many more.
How to find best forex trading sites in SA?
Finding the best forex trading sites in SA is easy. Thanks to Google which makes it possible for trades to find what they are looking for. You can just search “FOREX trading” and trusted forex trading brokers will come up on the Google search. Alternatively, you can sign up with the above FSB regulated forex brokers in South Africa.
After finding a trading website, you will be able to sign up and starting trading currencies. For example, you can sell 200 US dollars to buy ZAR online.
Forex Trading Glossary, Currency Trading Terms, FX Terminology
- Equity: This refers to the current market value of your account
- Free Margin: The amount in your account available as margin for new positions
- Forex: Foreign Exchange
- Margin: The amount that is needed in your account as margin for open positions
- Margin Call: A requirement by the broker to deposit more funds in order to maintain an open position.
- Market Order: An order to sell at the Current bid price or buy at the current Ask price
- Offer: Price at which brokers are willing to sell.
- Take Profit: An order to buy or sell at a specified price when the market moves down to that price
- Technical Analysis: Analysis that is applied to the price action of the market to mature trading decisions
- Ask: This refers to the ‘offer’ or a price which a broker is willing to sell
- Balance: is the value of your account
- Bid: Price at which broker is willing to buy
- Ask Spread: The distance between the Bid and Ask price
- Drawdown: The amount of a decline in account value
- Fundamental Analysis: Macro or strategic assessments of where a currency should be trading based on any measure but the price action itself
- Leverage: The amount uttered as a multiple, by which the estimated amount traded surpass the margin needed to trade
- Limit: An order to sell at a specified price when the market moves up to that price or to buy at a specified price when the market moves down to that price
- Pip: The smallest price growth in a currency
- Roll over: Changing of futures when they run out to the new contract
- Spot Foreign Exchange: Currencies traded between two participants, usually banks
- Stop: An order to buy or sell at the market merely when the market moves up to a specific price
- Swap: The cost of holding an open position
- Liquidity: A function of volume and activity in a market
- Tick: The smallest price growth in a CFD price