While browsing online, it’s not uncommon to come across ads that redirect a user to a forex trading website. In fact, the internet is littered with such ads, all advertising about “Financial Freedom” or something similar, which almost always point towards forex trading. In South Africa, forex trading has been gaining popularity for the last two years, mainly as a largely unregulated market where traders can make a fortune. There are a lot of reasons why the popularity of Forex trading in South Africa has expanded so much, and this article aims to discuss certain factors behind it.
There are certain common factors which are seemingly driving South African traders towards investing all their time and effort in forex markets. One of them has to do with the fact that forex trading offers quick returns on investments, allowing people to amass a fortune in little time. There is also an additional attraction of becoming “your own employer”, as many traders earn better than what most regular jobs offer. Of course, this largely depends on the understanding and the skill level of the trader in question. From a trading standpoint, there are certain factors which are highlighted below
- The Rand’s Popularity: Although the Rand is not in a favorable economic situation now, its popularity was one of the first factors that influenced traders at the beginning. The Rand is still an often-used currency and is possible to be traded against both USD and GBP currencies. Traders often prefer the Rand over other currencies due to its fluctuating nature. The fact that the rand is stabilized from time to time South Africa’s Reserve Bank which provide some leeway for scoring gains.
- Ease of Entering: The South African forex market is an old one, dating back to the mining era of the country. However, it was not an open market, being exclusive to only large financial institutions or retail investors. However, with many liberal laws and the emergence of online forex trading, the market is largely open to any person willing to invest. Many exchanges start forex trading from as low as R5000, making it one of the most highly expanding markets in forex which has yet to experience saturation.
- Leverage: With the introduction of margin trading and trading with leverage, forex trading is now more accessible than ever. With CFD trading, investors can now trade in much larger positions without investing just a fraction of it. Unlike brokers in Europe, most forex brokers in South Africa are not regulated by strict laws pertaining to leverage. Thus, there is no fixed limit on leverages, with standard leverage offerings being 400:1 or even 500:1. However, this can be regarded as a double-edged sword, as it can either “make or break” a trader.
- Trading Freedom: Because of the emergence of online trading platforms, traders have a lot of flexibility and freedom when it comes to trading in forex these days. Most brokers have trading apps for both desktops and mobile phones, so the trader is connected to the market at all times. Traders are also no longer restricted by geographical boundaries and is more aware of the present market situation at all times.
Forex trading along with cryptocurrency trading is currently trending in South Africa and online platforms like http://www.tradeforexinsa.co.za/are a large part of it. Many forex brokerages offer free educational materials to better educate their users on the pros and cons of forex trading, as well as supplying them with free seminars, webinars, etc. Forex sites such as IQ Option even offer demo trading accounts, complete with virtual money where traders can develop their skills. With South Africa being regarded as an emerging economy, the scope of forex trading in the future looks bright indeed.