If you're new to Forex and want to figure out how it's done and whether it's worth your time to enter - we have good news for you. Here you'll find everything you might want to know about Forex in South Africa before you're either committed to it or decide to bail out. We'll start with some statistics to understand what you might expect and get into the other aspects a bit later.
The South African Forex market is falsely depicted as a lottery by shade brokers and phony "couches" who want you to buy their overpriced trading courses. In reality - Forex trading is a job, just like any other. The chances of going there and getting rich within days or even months are slim to none, yet if you don't know how to use your instruments - you might quickly eat through your life's savings. Statistics say that 70-90% of Forex traders lose their money during their first months of trading, and most of them never come back afterward.
That's a consequence of the general "get rich quick" mindset promoted by dishonest brokers who only want to lure the money out of you and don't even offer you real trading opportunities. The best thing to do to avoid them is to do your research and pick a reliable broker who won't just take your money but will also explain how to start trading Forex in South Africa and avoid the beginner's mistakes.
So let's assume that you did your homework and didn't blow through all your money during the first months. You've started with a test account, then used a cent account, and only started trading with leverage after figuring out how it all works. What's your yearly income expectancy? Statistically, professional South African Forex traders make anywhere from 10 to 20% of their capital per year.
That means that until you can comfortably live off 10% of your capital for a year, you shouldn't consider Forex trading your primary source of income. And that's when time becomes essential because you need to maximize your profits and minimize the time investment. You don't want to come home from your day job only to sit through the quiet hours on the market and go to sleep. To become time-efficient, you need to learn what the best trading hours for South Africa are and what you should trade during them.
So, if you've read through and understood everything up to this point and still want to continue - let's talk brokers here. South Africa is a fast-growing market, and like any such market, it's rich with scammers trying to get to your wallet by fair means or foul. That's why your primary focus should be on finding a reliable broker to trade with.
Here are some of the ways to figure out whether the broker is suitable for you, yet it might require some research. Firstly, look into whether the broker offers demo and cent accounts. Even if you feel pretty confident about trading after a few days of reading articles, believe me - you don't want to start with a real account just yet. Furthermore, if a broker doesn't offer a demo or a cent account - they're a scam only interested in you losing all you have.
After that, you should check for the available payment methods and see if your platform of choice is there. It's essential because you don't want to get hit by a huge commission when you withdraw your hard-earned money. Also, you'd better make sure that the broker you've picked is certified with FSCA and has a good reputation. That's everything you should know before opening your account. Good luck, and may your positions never hit the stop loss!