What do Investors Need to Know About Forex in South Africa?

What do Investors Need to Know About Forex in South Africa

Forex trading is the primary financial market worldwide and the most liquid market. Retail Forex trading, which is a tiny segment of the entire currency market, consists of 5.5 percent of the complete volume of the Forex market. The Forex market is rising in South Africa. Thus, its volume is increasing significantly. With the help of the retail brokerages of the Forex market, investors and individuals can easily invest their money into it.

Moreover, the advancements in technology, the higher speed of the internet, and growing competition in brokerages have reduced the transaction costs of Forex trading. It is a matter of fact that the introduction of the digital Forex trading platform has made it very much accessible. Now retail investors can easily make short-term and long-term investments in Forex trading. Simply by accessing these platforms in a digital manner. Click here to know about the right platform to earn Bitcoins.

South Africa is the biggest retail forex market in entire Africa!

As per the information of the bank of international settlements, the regular trading size of the retail Forex trading in South Africa is 19.1bn dollars in the year 2017. It is the highest volume in the entirety of Africa. Nigeria, which is the second-largest Forex market in the landmass. When comparing these, Nigeria has a daily Forex market volume of less than 1/10th of South Africa. We all know that the dominating currency in the universal Forex market is the dollar. However, the rand can come in the list of 20 most traded currencies.

What is the reason for the growth of forex trading in South Africa?

Tightening guidelines of Europe for the retail Forex market and the severe leverage caps have forced the brokers in reducing the operational cost and in expanding the markets as well. Moreover, it has made Africa and Asia one of the unique destinations. Now, South Africa is a new center for many regulated European brokers.

The three main reasons the Forex brokers are making their offices in South Africa are;

  • The country's strong banking condition
  • The independent regulator of South Africa
  • FSCA ( financial sector conduct authority)

What to look for before getting into Forex trading?


You need to know that as the money comes from every kind of investor. As such, South Africans are now very vulnerable to scams for Forex trading and the cryptocurrency market. Digitalization in trading has made it very simple for hackers. Investors should always avoid con artists flaunting rich people on social media platforms. These unlicensed brokers tell you that they will give you higher returns. Also, avoid the WhatsApp investment advisors.

Every trader should avoid these scams if they want to safely trade on the Forex market in South Africa. According to the experts, the investors should always trade with the regulated brokers of FSCA. Legally educate yourself to avoid scams that come your way.


The leverage which the brokerages offer is one of the main risks. First, you need to know that the leverage is using the borrowed funds to increase the trading position. This makes the limit available for their funds alone. The thing is that Forex traders use leverage most of the time to get the profit from a small price change in currency exchange. However, leverage is the thing that can offer profits and a significant loss to the investors. It means that if you get the 300x leverage when you make a minimal deposit. Then, the investor can also get into the position of trading a considerable amount of money.

However, this much position volume can put the investor at enormous risk. Thereby, even losing their real money in it. The solution is that the investors should not use leverage more than 1:20 until they are confident while trading. Therefore, Forex trading investors need to manage their risk to a great extent effectively.

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