How to start Forex trading in South Africa

Forex trading can be a profitable market in general; However, Forex Trading in South Africa has become something special. This status is determined by unique characteristics that appear only in that particular market. From specific rules and restrictions to huge successes found by some traders, the South African FOREX industry is an interesting development.


First, we need to be on the same page when it comes to FOREX trading.
Forex trading is the exchange of currencies from different countries in order to profit from the difference in the value of the coins of each country.
Currencies are traded in pairs, and what dictates the value of a particular coin is the overall economic status of its country of origin. 
While the value of a stock or share in a company is determined by how successful the firm is, the price of a currency will vary depending on the economic freedom and wealth of the nation.

Finally, the FOREX market is available through the so-called Foreign Exchange Brokers; these are agencies that offer the necessary platforms and tools to go to market. Alternatively, many brokers are the very markets where traders take positions against the company.

Why Fx Trading Is Popular In South Africa?

Before 2010, South Africans had to go through too many restrictions when it came to moving money across national borders. Capital control has been a big problem that is standard in countries in economic turmoil.

However, after 2010, the government provided more respite to citizens who wanted to legally move their capital ashore. The South African government began giving people restrictions on foreign exchange.

The new laws were for the first time in decades, and the FOREX industry was quickly filled with new and excited traders looking to experience Forex Trading in South Africa for the first time.

Aside from the recent permission to move African currency overseas, the country is also unbiased when it comes to how traders work. While Africa has a regulatory body for FOREX brokers, there are no laws prohibiting traders from using unlicensed agencies.

Steps to start trading forex in South Africa for beginners:

  1. Learn the basics of Forex Trading
  2. Learn about the different Currency pairs
  3. Choose a broker & open your Forex Trading Account 
  4. Learn the different Forex Trading Strategies

Learn the basics of Forex Trading

What is Forex Market?

Forex refers to Foreign Exchange , or simply FX , sometimes even called Spot FX, where the global currencies are traded against each other.

You may have seen ticker symbols of currencies like USD/ZAR, EUR/ZAR etc. while visiting your bank. These are the rates of the currencies from the live Forex market.

Forex is the most liquid market in the world, operating 24 hours a day, nearly five and a half days in a week. The global daily average trading volume of this market is over $6.5 Trillion, making it the largest financial market in the world. The number is so big that a big Stock exchange like a New York Stock Exchange (NYSE) has to operate for about a month just to catch-up to the Forex market’s daily average volume.

Forex Trading

Have you travelled abroad to another country?

If you been to a foreign country, then it is likely that you may have converted your local currency i.e. South African Rand (ZAR) to another currency like Euro or a US Dollar. If you exchanged your currency before, then you have already traded in the forex market.

Let's assume that you exchange ZAR15,000 for $1000 through your bank or local regulated exchanger, for travelling abroad to US. In this example, you would be physically selling your home currency (South African Rand) for buying US Dollar. When you are exchanging your money for travelling abroad, you (through your bank) are making a forex transaction in the global forex market without even knowing

Learn about the different Currency pairs

What are Currency Pairs?

Currency Pair is the quote of one currency relative to the other currency. In the Forex market, all currency are traded against each other, therefore being called 'currency pairs'. So when you are trading in the forex market you are actually trading 2 currencies simultaneously.

Currency Pair Terms:

1) Base & Quote Currency: In every currency pair like EUR/USD, USD/ZAR, the first currency mentioned is the ‘Base Currency’ which is being compared to the second currency called ‘Quote Currency’.

2) Bid & Ask prices: 'Bid price' is the market price at which you can sell the base currency. And 'Ask price' is the price at which you can buy the base currency in the pair.

3) Spread: Spread is the difference between the ask and the bid price. This is the fees charged by the forex brokers for each trade trade, and it depends on the market liquidity, and the currency pair that you are trading. The lower the spread, the better it is for you.

4) Pips: Pip stands for Percentage in Point, and it is the most common term in forex trading. Simply put, 1 pip is the smallest measure at which the market moves. It is normally the change/fluctuation in points of the last decimal for a currency pair.

Choose a broker & open your Forex Trading Account 

1- Open Trading Account with a Regulated Forex Broker

The first step to start trading forex is to choose a reputed & regulated forex broker, and then open an account with it. Choosing a 'good' broker is an important step because the broker plays a pivotal role in your trade.

The Top 8 South African Forex Brokers

Here are the April 2021 best forex brokers in South Africa by fx trading category

  • Best South African Forex Broker 2021
  • pepperstone logoPepperstone- Top Trading Spreads
  • fxtm logoFXTM- Highest Leverage (2000:1) SA FX Trading Account
  • Plus500Plus500- Top FSCA Regulated Forex Broker For Beginners
  • avatrade logoAvaTrade- Cheapest Forex Broker With Fixed Spreads
  • FxPro UKFxPro- Good Forex Broker With  ZAR Account
  • FXCM UKFXCM- Good No Commission Forex Broker Account
  • thinkmarkets logoThinkMarkets- Best No Deposit FSB Trading Account


2- Understanding Forex trade

We will first dive into some important terms that you would need to know while placing your trade.

1. Lot Sizes
2. Leverage
3. Margin

4. Stop Loss

3- How to place a trade in forex market?

1.Buy Order in Forex

2. Sell Order in Forex 

Learn the different Forex Trading Strategies 

1- Fundamental Analysis

Fundamental analysis mainly involved trading based on the news releases. Fundamental Analysts believe that a analysing a country’s economic indicators such as inflation, economic growth rates, interest rates and monetary policy & unemployment etc. would determine the price of currency and base the decisions of currency movement by analysing these factors.

There are plenty of online Forex news calendars available for free if you want to make it your sole trading strategy. Also, you can get an idea on how a particular information may effect the market movement upward or downward.

2- Technical Analysis

Technical analysis is the most popular trading strategy & it basically involves trading off the charts. Learing this strategy is important for both short term day traders & long term swing traders. A technical trader focuses on the historical price of the assest to make his/her decision of the future market movement. According to technical analysis theory, the emotions of the market participants are reflected in the current & historical price that is visible through the charts. Technical traders also use various indicators & chart patterns to buy or sell currency pairs in the forex market.

South African Forex Market trading times :

TIME UTC/GMT SAST South African Time Zone
Sydney Open 22:00

Sydney Close 06:00

Open 23:00

Close 8:00

Tokyo Open 00:00

Tokyo Close 08:00

Open 1:00

Close 10:00

London Open 08:00

London Close 16:00

Open 9:00

Close 18:00

New York Open 13:00

New York Close 21:00

Open 14:00

Close 23:00


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