Forex trading is becoming an increasingly popular trend around the world. The number of forex traders has increased up to 10 million worldwide. South Africa offers a very huge market for forex trading with very high growth potential. With so many restrictions surrounding forex trading in Europe, both global and local brokers are looking to set up an office in South Africa and begin trading.
While the South African government still hasn't given any verdict on the legality or illegality of forex trading, they have implemented a system to oversee the cash outflow from the country. From 2010 onwards, the government has set a limit of 10 million Rand that can be sent out of the county to an off-shore account.
How to Do Forex Trading In South Africa
To jump into any business, you need to have a clear idea of how it works. Forex trading, unlike other markets, is open throughout the day. In South Africa, it starts from 5 p.m EST on Sunday until 5 p.m EST on Friday.
The forex market also overshadows all other markets in capital turnover per day with a whopping $5 Trillion. To start forex trading in South Africa, you need to follow these basic steps:
- Select a trustworthy broker
If you have already traded in any other market, you might know the benefits a good broker can bring to the table. Before going for a broker, make sure that he meets all your needs and that you have acquired enough knowledge to know that he is the best option for you. You should only go for a trusted forex broker that works in compliance with the rules and regulations set by the South African Financial Sector Conduct Authority (FSCA).
- Open a forex account
There are a lot of brokerages, which can help a person doing forex trading in South Africa. Along with keeping the FSCA regulations in mind, you should look for someone who has been working for a long time, provides good leverage, and has fixed spreads.
- Start Trading
After you have successfully opened your forex account, you can begin to trade online. You should always follow a set of strategies so that you benefit as much as possible in this highly volatile trading environment.
Forex Trading Regulation in South Africa
As the second-largest economy in Africa, South Africa offers an emerging trading market in the African region. The South African Rand, ranks 20th by the Bank of International Settlements and has a fair amount of daily turnover and trade volume compared to other currencies in the forex market.
Whereas forex trading in South Africa sounds like a dream, you still have to keep a few things in mind. First is their taxation policy, which ranges from 18% to 40% depending upon the profits earned. The second thing to look for is regulation. This process is done by South African Financial Sector Conduct Authority (FSCA); a successor of the Financial Services Board (FSB).