Currency Trading South Africa

online trading » Currency Trading South Africa

The Forex market is a very interesting market to be sincere. It is also one of the most traded markets in the world today. Currency trading is open 5 working days of the week and virtually anyone can participate, provided you are at least 18 years old. The Forex market never sleeps during the 5 working days of the week. The market opens in a different city when it closes in another, like Sydney, Tokyo, London and New York. The Forex market is also massively decentralized and it has expanded rapidly over the years. Technological advancement has also enabled the market to expand and gain popularity over the years.

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Millions of traders are involved in Forex trading today and they all participate from different locations across the globe; virtually everyone wants a cut of the pie. In the remaining part of this write-up, we will show you some interesting facts about currency trading in this write-up.

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It has an ancient history

Many people think Forex trading is a recent thing, but this is not so at all. It had been around for a very long time ad it dates back to centuries ago. Forex trading is as old as the first currency transaction that ever took place on earth, some of which were recorded in the Talmudic writings. Money changers can be described as some of the very first set of currency traders ever; they change money from one form to another and are given commissions for their efforts, which is also the same way many Forex trading brokers operate today.

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Important currency pair

The GBP/USD is one of the most important currency pairs traded in the Forex market today. The EUR/USD is also among the most traded currency pairs, especially because of its low spread. The GBP/USD is called the Cable. Why is it called that name? It is because the New York stock exchange and the London stock exchange were connected via a steel cable running under the Atlantic; this was long before the advent of fiber optics and satellite.

The bulls and the bears

Forex traders are categorized into two; some are categorized as bulls, while some other traders are classified as the bears. The bulls are the buyers, while the bears are the sellers. The buyers are optimistic about that particular currency pair that it will gain or strengthen, while the bears are those traders that are not optimistic about the particular currency pair, thereby believing that the pair will lose value or fall. How did they come about this name? Bulls are known to strike upward, while bears are known to swipes downward!

High liquidity

The Forex market is one of the most liquid markets in the world today. The value of the Forex market is over $5 trillion per day, which is far more than that of the New York Stock Exchange. The US dollars is the most traded of all the currency pairs in the world today. Studies show that the U.S. dollars take part in more than 80% of all Forex trades.

Other interesting facts to note about currency trading are highlighted below:

  • Studies show that up to 90% of all Forex trading activities are speculative trading
  • Spot trading refers to an immediate or instant exchange of currencies since such exchanges take place on the spot

Only big financial institutions and banks were involved in Forex trading in the past since huge funds were required to trade Forex; in those days, a financial institution is required to have between $40 million and $60 million to venture into online trading. Things have changed these days, however. Leverage and lot size now make it possible for individuals with limited capital to also trade Forex.

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Trading leveraged products such as Forex and CFDs may not be suitable for all investors as they carry a high degree of risk to your capital.It is really important that you do not trade any money that you can’t afford to lose because regardless of how much research you have done, or how confident you are in your trade, there will always be a time that you lose.