The Forex industry keeps on rapidly expanding. Even the 2020 coronavirus pandemic and resulting global economic crisis didn’t mar that. In fact, they have made Forex even more popular than before, especially among developing countries. Africa, in particular, has quickly become one of the fastest-growing Forex trading communities. Here is why.
What Is Forex Trading?
From “foreign exchange,” Forex trading is all about currency pairs. Like other forms of trading, the main goal is to buy currencies when they are cheap and sell them when they are expensive to make a profit. Unlike buying the currency at a moneychanger's office, the Forex market allows you to trade currencies you don’t own physically.
In addition, most Forex brokers offer instruments beyond currency pairs. For instance, you can also trade in company shares, stock indices, and cryptocurrencies.
The Advantages of Forex Trading
The reason why the Forex industry is growing so fast lies in its many benefits.
One of the greatest advantages of Forex trading is that you can do it from anywhere in the world. As long as you have Internet access, it doesn’t matter where you connect from.
This benefit has been especially important in 2020, where millions of people became confined to their homes due to the pandemic. In addition, the Covid-19 lockdowns caused a spike in unemployment. This further encouraged people to look for ways to make money from home. With more time on their hands to learn and experiment, many flooded to Forex trading for that purpose.
Open All the Time
In addition to not being tied to a location, Forex trading is also not constrained by time. When the US market session closes for the night, it is morning in the Asia-Pacific region. There is trading activity at any point of any day or night. Thus, traders can join whenever they want, rather than adhering to a strict 9-to-5 schedule.
Doesn’t Require Much Capital
Unlike more traditional forms of investment, Forex trading does not require a lot of money. Most brokers offer trading accounts with minimum deposits that vary from $100 to as low as $1 in some cases. They also accept deposits in small amounts, for instance, $10 or $25. Thus, you don’t need to already be rich before you start trading on the Forex market.
One of the main reasons why you can trade Forex with such small investments is that brokers use leverage. The leverage of a Forex trading account essentially boosts your trading funds. For instance, if your account has a leverage of 1:200, you can trade at 200 times greater volume than a 1:1 physical trade.
Forex Popularity in Africa
Forex trading is popular everywhere around the world, including in Africa. The Forex market has a higher daily turnover than any stock market in the world and is far more liquid.
In the past few years, interest in trading by African countries has grown. The new technology is exciting, and the ability to work from home according to one’s own schedule is increasingly more attractive to people there. The lockdowns and spikes in unemployment in 2020 further sped up this process.
Furthermore, Forex brokers have been paying more attention to Africa as a region where they can expand. Brokers often have geo-restrictions as to who can open an account, depending on their regulation. More companies have opened their doors to African customers lately.
In addition, brokers have also started allowing clients to open accounts in local African currencies. Many have welcomed payment methods popular in Africa as well. All of this has made it easier for prospective traders from Africa to join the Forex industry.
One such broker that supports several African currencies and local payment methods is SuperForex. The company was also chosen as the Best ECN Broker in Africa in 2020, making it a trusted choice for new traders.