Trade Forex South Africa

Want to trade Forex online in South Africa? TradeForexSA answers questions for those starting to trade Forex.  We give honest and balanced reviews of the Forex brokers available online.  Trading Forex can be a lot of fun, but it does come with a great deal of risk.  If we help you choose the best broker, by weighing every pro with a con, we have then succeeded in our goal.

The Best Forex Trading Brokers For South African Traders

How do you trade forex?

The Foreign Exchange Market, or Forex Market, is the biggest financial market in the world and is effectively open 24 hours a day for 5 days a week.  Forex trading is the buying and selling of currencies on this single global currency market. Everyone from the smallest retail forex traders to the biggest of banks is buying and selling currencies for profit.

As with CFD trading, a trader never takes ownership of the currencies they are trading. Instead, a Forex trader speculates on the value of the currency either increasing or decreasing in a process called going long or going short.  A forex trader makes a profit by purchasing a currency and then selling after the price has changed.  Should the trader assume wrongly, a trade can make a loss.

In Forex trading, currencies are traded in pairs.  The value of a single currency is always relative to the value of another currency.  So as you are buying one currency, you are selling the other currency in the pair.  The currency pairs are grouped into three groups based on how popular they are to trade.  They are called the Majors, the Minors, and the Exotics.  One of the most popular pairs to trade is the USDEUR (or Euro and USD).

As with the buying and selling of any other product on the market, Forex trading has everything to do with supply and demand.  If we are going to sell a currency there must be someone else, or a counterparty, who must be willing to buy it.  In forex trading, this is known as liquidity, and the more popular a currency is to trade, the more liquidity will be available.

To understand more about how Forex trading works, we have put together an article that goes into a little more depth on each of these issues, and we have an education section that will help you with all other questions.

Learn To Trade Forex

Learning to trade forex can be hard, but you are not alone.  We have put together a set of articles to get you comfortable enough to get you started and take that first step. Much of trading is learning by doing. Once you understand the basics because it is only using expert tools and doing your own analysis that you will start to understand what is involved.  So, as you choose your broker, read the following articles.

How To Trade Forex Successfully

  • Find a broker on our website that suits you.
  • Open an account on the broker website by providing your name and phone number.
  • The broker will call to see how to give you the best start.
  • Verify your identity & personal details by providing the requested documents.
  • Make your initial deposit to start trading & get access to training material.

What is like to Trade Forex?

Forex traders spend much of their time looking at the way the currencies value changes over time.  This is always done comparing a currency against another in a process called pairing.  Below is an example of the USD/ZAR pair being traded, and an outcome of the trade.

An example of Trading Forex

An example is often best to help beginners understand what trading forex is like and how traders approach their work.

Every two months, the South African Monetary Policy Committee of the SA Reserve Bank (SARB) meets to set and adjust the monetary policy.  As a trader, you expect changes to be made to the policy.  You expect that the press release has been scheduled for 2 pm, will drop interest rates.  This rate change has been expected for the past 2 quarters but has never been made.

Right before 2 pm, you place a trade for 170 USD with 1:50 leverage which gets a trader $8500 (170 USD * leverage) to invest.  For argument’s sake, we can say this is 1 standard lot.  You buy in at 11.6927 and watch the market.

At press release time, MPC reduces interest rates as you expect and the market starts to move.  You monitor your trade for 15 minutes when you decide to sell at 11.7685.  The outcome of this trade  – you make a profit of 641 USD.

Trade Forex Example

The USDZAR moves following a Monetary Policy Committee Meeting of the SA Reserve Bank in March 2018

Featured Sections

Demo Accounts

Demo accounts are a good way for a new trader to try a broker without risking any capital.  Demo accounts often have all of the features you would expect from the broker, and it gives the trader a good feel for what trading would be like with MT4 or with the broker’s own software or apps.  Read more.

Cryptocurrency Trading

Looking to trade Cryptocurrencies like Bitcoin and Etherium? They have become very popular and are good trading for those who enjoy technical analysis and charts.  Here are the best brokers who offer these assets.  Read more.

Forex Trading Apps

Some Forex trading apps are high quality and can be used in trading, price quotes, currency comparisons, and analysis.  Here is a list of brokers with great mobile apps so you are ready to trade on the move.  Read more.

How can I trade forex successfully?

Forex Trading can be profitable or unprofitable depending on what at trader invests in, how the trader makes the investment, and the market conditions during the time they hold the investment.  These aspects working together will determine if the trade is profitable.  Forex traders will always lose a portion of their trades, so it is important for all traders to set a win-loss ratio that you should target.  As a general rule, a trader should not invest more than 2% of their total capital into one trade, and never trade any money that you can not afford to lose.

Do Traders have Tools to Trade Forex?

There are a great number of tools to help with Forex trading.  Most of them are already included in the platform that you use when you sign up with the broker, but there are other good stand-alone pieces of software that can be a real help give you an additional edge in your trading.

We feature these kinds of software because we believe they have great value for the readers. Examples of tools are FormationSeeker that helps traders identify harmonic patterns in the trading and highlights opportunities for profit, and PitView that gives full transparency to how the banks are trading making it much easier to predict the market.  For a full review of all Forex analysis tools, you can read our article here.

Do forex traders pay tax in South Africa?

Forex gains are not tax-free income, and all gains from your Forex trading are taxable even if your brokage and capital are overseas.  South Africans are expected to declare taxes just as with any other income either as an individual or a company.  For more on this read our taxation article for forex traders who reside in South Africa.

FSB Regulation in Forex Trading

South Africa’s investment regulatory body is called the FSB (Financial Services Board) whose job it is to regulate all non-banking in South Africa.  Regulators like the FSB are put in place to protect the public from financial crimes and irregularities.  Today, in addition to regulating trading on the JSE, the FSB regulates Forex trading brokers.