How to start trading Forex in South Africa

If you’re thinking about starting trading on Forex in South Africa – there are many things to factor in before making this decision. We will go through them all in this article and present you with no simple answers. There is no single answer, no one-fits-all, because Forex trading is a profession and not a hobby.

 If you want to treat Forex as a hobby – you’re going to make negligent profits for years until you get too bored to continue. So, if your goal is to spend an hour a day looking at charts and exchanging your $100 back and forth waiting for a miracle – you can start doing it right now, without reading anything. Yet if you’re planning to make Forex your primary source of income – it’s going to be different.

So here comes advice #1: Forex trading is the same thing as starting your own business: it’s going to take total commitment, some initial capital, and will not bring you any profits right from the start. So if you’re not ready for it – you’re better not to start. 

To start trading Forex properly, you’ll need to figure out many things and absorb lots of information. JustForex, for example, offers a vast range of knowledge and practical advice on how to start trading Forex in South Africa in 2021. Remember: you have to be prepared for everything, and the more you learn before entering your first trade – the more chances you have to succeed and start turning profit.

Legal aspects of Forex Trading in South Africa

Forex is legal in South Africa, and fortunately for all the citizens – there are no draconian rules regarding it. So you can trade with local or foreign brokers, and as long as you report your income to SARS (South African Revenue Service) – you’re going to be alright from a legal perspective.

If you’ve already tried to search for information on Forex-related legal entities in South Africa – you’ve stumbled upon the FSCA (Financial Sector Conduct Authority). It’s a government-based regulator designed to keep an eye on the financial sector and make sure that financial organizations aren’t mistreating their customers, are law-abiding, and aren’t using their position to form a monopoly. Also, it serves as a licensing body for many sorts of organizations, including Forex brokers.

And that’s where it gets interesting because there is no law prohibiting South African traders from dealing with brokers unlicensed by FSCA. Yet if you want to be extra sure that the government has your back – you might want to pick a broker with an FSCA license.

Time zones of major trading hubs

Many novice traders think that their desire for success is thoroughly enough, and no circumstances can stop them. Unfortunately, such an attitude proves to be wrong in most cases. And one of the most significant factors for Forex traders is their timezone. In the case of South Africa, the time zone is moderately acceptable for trading. Your trading timeframe is roughly from 9:00 to 24:00, encompassing all four of the biggest trading days across the world: American, European, Australian, and Asian.

 These are counted by the timezones of four major trading hubs: New York, London, Tokyo, and Sydney. So what it means for a South African trader, you might ask? It means that from 9 in the morning till midnight you can cover the working hours of these hubs and turn a profit on each of them. And it also means that you’re going to lose valuable time if you, for example, work long shifts in the supermarket from 10:00 to 22:00.

 And that’s advice #2: if you have a solid job right now: don’t quit it until you’re sure that you can earn your living on Forex. You can read and learn after work. You can also trade on your demo or cent account after work. You can even put a hundred or two into a real account and make your first steps in Forex trading: all without quitting your job. And when you understand that the lack of trading time is the only thing separating you from success – you might consider leaving your daytime job.

Seed capital and leverage

When people say that Forex trading is a job – they’re not entirely correct. It takes as much time, commitment, and knowledge as any other job out there, but it’s not a job. It’s a business because you’re trading with your own hard-earned money, and you can quickly lose it all if you’re not skillful or careful enough.

 Now, most professional traders will tell you that you should trade with your own money, using reasonable leverage as seldom as possible. They’re mostly talking x5 to x25 leverage because if you go for more, you will be putting a significant part of your capital at risk. You should also know that professional traders rarely make more than 15% of their trading capital per year. Now take this number and let it sink in that you’ll have to practice for years even to start approaching that percentage. That leaves you with an open question: do you have enough trading capital to sustain you during a year on about 5-10% of it? And while you’re calculating, let’s talk leverage.

 Some brokers can offer leverage as high as x1000, and in general practice, you can see x200 and x300 offers quite often. It means that if you have $1000, your can trade with up to $300 000 and get profit from all of it. But guess what, if your calculations were a bit off, your $1000 could get eaten out with quite a regular market movement, and you won’t get a chance to win it back.

 All brokers work with failsafe systems, protecting you from negative balance and them – from having to collect debts. That’s why you don’t want to trade with extreme leverage, even if your trading capital is too low for now to offer significant profits.

Research and learning

If you want to start trading Forex, it will cost you time, effort, and money. The good thing for you is that you can do it all on your own. We emphasize this because as a developing country with more than 500 000 active Forex traders, South Africa is ripe with all sorts of Forex-related scams. Unethical brokers and fake trading coaches are the most efficient and widespread of them.

 Research is crucial for you in the early stages of your trading career since you cannot yet figure out if someone’s scamming you. That’s why you don’t just follow the first link in search results and don’t buy the first Forex course you see. Actually, you don’t buy a Forex trading course at all, no matter how rich and successful the speaker looks. If they could trade successfully – they would do that.

 We hope that now you’re a bit closer to understanding what Forex trading is and how you should approach it. Always make informed decisions, and your financial stability will follow suit! 


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