Forex trading is the exchange of foreign currencies. Also known as foreign exchange or FX trading, the business is currently one of the biggest in the world. However, in this article, we are going to focus more on forex trading in South Africa. We will look at some of the reasons why the business is ever growing and some of the benefits that come with it. Still in South Africa, we will focus on the advantages of receiving training before engaging in any forex trading activity.
Why do South Africans engage in forex trading?
The business of Forex trading is becoming increasingly popular because it is an economic activity that according to investors, it is a good source for bread winning. Today, many South Africans are looking for ways through which they can get money and deposit in their accounts in order to start forex trading. If anything, both global brokers and local brokers are looking for people in the country to whom they can do business. With this, we can depict that there is a huge demand for more people to engage in this legal economic activity and make their lives better.
What motivates South Africans to engage in forex trading?
For someone to engage in an economic activity there has to be a motivation. The case is true for South Africans who engage in forex trading. For them, there are three main motivators as discussed below:
1. To get money
This is the major reasons why many people in South Africa are fighting tooth and nail to get a share of the forex trading cake. With this business, you can make money from anywhere in the country. You are not bound to a town or city. This allows for a very flexible and convinient lifestyle.
Of course, nothing comes easy so the amount of effort that a person puts in creating a trading system matters a lot. Furthermore, forex trading carries a high risk. However, the bottom line of the subject is that most people in South Africa engage in forex trading to make money even though it is in no way shape or form guaranteed!
2. Forex trading encourages an independent lifestyle
Not many South Africans like the notion of wearing suits and ties all day every workday. Instead, they choose to engage in forex trading and they can be willing to giving up anything in exchange for this cast economic activity. This way, they can be able to work from home and still make a lot of money to carter for their day-to-day needs. With only a good technological device like a laptop, desktop or a Mac and with a good internet connection, people in South Africa can pick a time they think is best and start trading without having to compromise their beloved lifestyles.
3. The challenges that come with the trade
Apart from money and a bid to maintain their lifestyle, people in South Africa engage in forex trading because of the challenges that come with it. While it is true that the money made in the business is a great bonus, for some South Africans the idea of waking up in the middle of the night just to look at the forex’s charts can serve as a great motivation. Like any other trade, it is not always that a person will make money. If anything, the chances of running at a lose are also considerable. These challenges serve as a motivation to the motivated people who engage in forex trading.
When South Africans are on the fence about Forex trading, it is important that they do their research well in advance. The types of opportunities, what these trading systems offer and a host of other things will need to be reviewed prior to making an investment. So, for those potential investors who want to know what they can gain by joining in, here are some of the top advantages of starting forex trading account.
#1 – Forex Trading Opportunities are Readily Accessible
Fortunately, one of the biggest benefits and advantages of getting involved in this investment opportunity is its overall accessibility. Meaning virtually every South African can begin trading within a short time frame, specifically since it only requires a relatively small amount of capital to get started. Unlike investing in stock, the amounts are considerably higher. Therefore, forex trading opportunities are much more accessible to the average investor.
#2 – Liquidity
In addition to being more readily available than stock investments, forex trading is currently known as the most liquid market in the world. This is because there is a continuous supply and demand for those who want to trade and make money. One of the biggest benefits of this type of trading is being able to move money in and out to local banking with ease. For instance, if the trading broker uses intercash, they can move currency in an out of trading accounts as quickly as possible.
#3 – Advancements in Technology Increasing Opportunities and South African Forex Brokers
Another great benefit that South Africans can expect when they are entering into these trading opportunities involves the advancements in the most recent technologies. There are forex brokers that accept South African Clients. Unlike stock and option broker applications, these have access to some of the latest and most advanced systems for trading that’s designed to make it easier for everyone to trade successfully. Some of which will allow their traders to get started using their systems with a minimum amount of deposit. Based on the broker that the individual uses, they can have access to a wide variety of tools including charts and analysis that will help to minimize the risks.
Choosing a Profitable System that works as the Developer Claims
Just like any other trading opportunity, Forex trading does have some disadvantages too. One of the most notable involves newbies getting started and learning the ropes. Because the Forex trading systems available online can differ greatly from one South African Broker traders to another, newbies can have a difficult time trying to select the best reputable resource that will suit their needs. In some cases, new traders may start with a system that they do not like because it does not yield any profits or does not work as they claim. So, they may change systems quite frequently until they find the best ones in the industry. This pick and choosing game can become quite frustrating and expensive over time and detrimental if they are not following the regulations set by South Africa.
Quite Risky and Volatile
Even though there is a lot of money that can be made, Forex trading comes with many different challenges. Some of which may not be as visible to the trader at first glance. While all markets can be risky investments, some are much more volatile than others. This is true for forex traders too since these traders are always looking for short term profits with a huge amount of success. Instead, these traders may be subject to an extreme amount volatility and risks at times so the profits can easily turn in losses that they do not expect. Therefore, before the novice and the seasoned traders from South Africa get started with their trading activities, this information must be taken into close consideration so that they do not lose what they cannot afford.
Small Traders May Face Some Disadvantages
Though Forex trading is open to the small traders, they may enter at a disadvantage, specifically when they are dealing with many of the major players like banks, and other larger financial institutions in South Africa. All of which have a competitive edge over the smaller traders because they can influence the market and directions that it takes. Therefore, when the smaller trader is making their investments, it is very important that they know how to anticipate even the smallest changes in order to make a profit. Particularly, because the moving in Forex trading can be relatively big and frequent at times.
Is forex legal in south africa? What are the rules and regulations?
When people are doing their research, there are some things that they may find in their search that can make a significant difference in an individual trader opening up an account online to start. This is because some countries do not promote Forex trading activities at all. In fact, in some countries, these activities are not even legal. So, when traders are looking into countries like South Africa to see where they stand, they may find that the laws are vastly different from the States.
With that being said, one of the first questions that need to be answered about South Africa and their legal ability to participate in Forex trading, they will find that the answer is yes. However, there are some guidelines, rules, laws and restrictions that determine how Forex trading is impacted. For instance, even though the number of forex traders in South Africa is increasing substantially over time, there are some concerns about the government’s stance on this type of trading. Meaning South Africans will need to be aware of the limitations that have been established. Some of the more notable involves how the currency will be flowing in and out of the country. As a general rule of thumb, the government’s limitations address the effect this type of trading will have on the South African economy as a whole.
What are distinct difficulties? And how to overcome them?
Because of the limitations placed on forex trading in South Africa, traders can experience certain difficulties. Specifically, when they are trying to make trades within the letter of the law and within the statues that may have adverse effect on the economy. Particularly, when the traders are watching their trading activities have a negative impact or sudden unexpected risky changes. This is because of the status of a small country that can be susceptible to the possibility of crashing their economy. To overcome these problems, there are some things that the trader can do. One of the most critical is making sure the trader chooses the best forex broker to help them with their trades.
How much can you make in South Africa?
Once the trader does their research, they can hire the right broker to assist them with their trades. Based on the Broker and the system that they offer, the amounts to be made can vary. In some cases, the risks can be great for the small trader. On the other hand, if the trader has a winning and proven system that works well for them, they can make in the millions of dollars. For example, there are some examples of what has already been done in South Africa. Two of the best examples are Sandile Shezi and Simz D’ Mandla who are now multi-millionaires. Simz D. Mandla is currently known for working his way from being a barber into becoming a millionaire at the age of around 19 and 20. That does not mean that everyone can make money. Forex Trading is a high risk venture and should always be regarded as such!
Why is training so important?
When an individual from South Africa decides to become a forex trader, there are many different things that they will need to know in order to be successful. A lot of the training information that is provided will assist new traders with what they will need to know before getting started. Also, in order to reduce the potential risks so they can stand a better chance of making a profit if they are familiar with the different forex trading systems. So, training is not only important for all involved, but it is a necessity for those who want to make money. Training can also keep the new trainers abreast of a variety of different issues including, new changes in the laws, how to choose the best broker and the like. Also, the training that investors receive will introduce newbies to all of the terms and strategies that they need to know. In specific, what is automated trading, 400:1 leverage, Local Nedbank deposting and good trading signals.