South Africa is one of the most highly developed countries in the African continent. It had long been struggling due to apartheid but ever since the issue was resolved (to an extent atleast) in the 1990s, the country has been able to grow strongly and has also been economically prosperous. With prosperity comes the need for people to seek additional sources of revenue and their first attention is always towards trading, either in the stock markets or in forex.
South Africans are no exception to this rule and that is why we see a lot of them in the forex trading industry trying their best to make a mark one way or the other. When anyone wants to start trading, the first task is to try and find a good forex broker.
How We Locate the Best South African Forex Brokers and Trading Platforms
Once a trader begins to search for the best brokers, he is faced with a very large number of choices as once he gets online, basically the entire world is available at the click of a button and so he would be able to choose from 100s of brokers around the world. But it is very important to consider some important factors while choosing the right broker.
First of all, it is important to see if the broker has a good reputation and can be trusted. The trader can either look for reviews and ratings for the broker or can search various broker review sites and see what others are saying about the broker. The next important aspect is whether the broker has a presence locally. This is key as a local presence would also most likely mean that deposit and withdrawals become easier and quicker. The trader would not want a situation where he has to go through wire transfer and other complicated procedures in order to deposit with the broker and begin trading. The same with withdrawal as well as the trader generally would like to withdraw as quickly as possible.
So, the trader needs to choose a broker who has a local presence and also has local deposit and withdrawal methods. This would also help with customer service in case the trader is faced with any issues in the future. Then comes the question of the trading platform. This is purely a choice of the trader and what he is comfortable with. Most of the retail brokers offer MT4 and MT5 platforms for forex trading nowadays and there are others who offer other platforms as well. It is purely upto the trader to decide which one he is comfortable with and go for that. These are the main deciding factors for choosing the best broker to trade with in South Africa.
Based on our study, the brokers that have gained a good reputation are IG, Saxo Bank and Interactive Brokers but we are sure that they are many local brokers who probably do a much better job in serving the local population than the biggies that we have listed.
What’s the Minimal Legal Age for Forex Trading in South Africa?
The South African regulators or the government do not seem to specify any minimum age for the forex traders but it is generally advisable that the traders be above 18 years of age as most brokers do consider this strictly when they do KYC. If the trader is very young and still feel good enough, then it is better to have a parent or a guardian looking over what he is doing and be responsible for his trading.
Can I Legally Trade Forex in South Africa?
This is a very basic and important question as the rules and regulations vary from one jurisdiction to another and it is very difficult for the traders to keep track especially when the regulations are changing and updated every once in a while. But as far as South Africa is concerned, forex trading is legal in South Africa and is governed by the Financial Sector Conduct Authority which regulates both Forex and CFD trading in the country. The retail brokers who offer services within the country also need to register with this entity and only then can they offer trading services to their customers. So, when the traders start out trading with a broker, it is important for them to see whether their broker is registered and licensed by the FSCA.
The Most Successful Female Forex Traders in South Africa
Forex trading has been the forte or a male bastion for many decades but in recent years, we have been seeing more and more female traders also coming into this industry. It is important for any industry to be as diverse as possible as it helps the ecosystem to grow overall. South Africa has generally been known as a country which gives both men and women equal opportunity and the best industry for females to feel on par with men is the trading industry as the market does not care who is buying or selling.
One of the successful female forex traders in South Africa Is Nelisiwe Masango who wanted to become a doctor but then chose to become a trader and entrepreneur. She is still only in a her 20s and among the young forex traders in south Africa but she runs 2 businesses already, one of which focuses on promoting financial awareness and upliftment for women in the region. She may well be one of the top 10 forex traders in south Africa.
She is reported to be one of the best forex traders in the country though specific details or a track record of her trading has not yet been released by her or any other firm. But it is always good to see women entering into an industry dominated by males and helping other women to follow the path and achieve the same.
The other couple of names that regularly come up whenever there is a discussion about female traders in South Africa are Paballo Nkwe and Danielle Nester. These two are also in their early 20s and among the most successful forex traders in south Africa but have been doing a very good job of mentoring and spreading awareness about trading. They mentor not only individuals but also start-ups and brokers and consult on how to help them trade the financial markets profitably. They also visit many universities to hold seminars and meeting to improve the awareness of trading and financial services among the masses. But as we have been saying many times, the best forex trader in South Africa may well be an unknown person hiding away from the limelight.
Forex Trading Tax in South Africa
forex trading is taxable in South Africa. But so far, they have kept the tax regime as simple and straightforward. The profits earned from forex are treated as income for the trader and like any other income, they are taxed. It is always good to pay the required taxes to the government to avoid any unnecessary trouble. If you are making a lot of money through trading, which is likely to make you one of the top forex traders in south Africa, then it may be a good idea to look for tax havens but if you are still a retail trader finding your way through the maze of trading, then it is better to pay taxes on whatever profits have been earned and also claim your losses as well, for tax benefit.
Making Money With Forex in South Africa
Forex trading in Africa is still in its infancy and there is a lot of untapped potential. The Richest forex traders in South Africa are generally very caring about the community that they live in and hence are always willing to share their knowledge. Forex trading continues to be a challenge for most traders as they struggle to come to terms with how it works and how to devise a strategy that would help them to be profitable in the long run. But the experienced traders would tell that the key is not the devising of a profitable strategy but the actually execution of the same. It is said that if the same strategy is taught to a 100 traders, then each of them would trade the same strategy in a 100 different ways and not any of them would be alike. This shows that trading is more in the mind than any actual physical effort and as each trader has a different mindset, we see that each trader in the world trades in a different manner based on his character. South African forex traders are generally known to be very good and consistent and with the right guidance, they should only do even better in the coming years.
It is very important to be able to control the emotions if you want to be a successful trader. The movement of the markets and the profits and the losses that the trader sees on the platform is something that can take a toll even on the best of the traders. To overcome the stress and the tension, it is very important for the trader to control his mind and emotions and only those who manage to do that will be able to be a successful trader not only in South Africa but in any part of the world as well. Also, the person who manages to achieve this would be a success not just in the forex market but also in any market which he chooses to trade in, with minimum of effort.
Forex and CFDs
Of late, both forex and CFDs are heard together though this was not the case earlier. It is important for the traders to understand the various types of markets and also the instruments in each of them. You have to first consider whether you understand how CFDs work before you undertake trading in them. The trader has to make sure that the learning that he does is tuned to the market that he is going to trade in. CFDs are known to give good returns if traded in the right manner but like all good stories, there is a twist. CFDs can also be very risky instruments to trade if not traded in the right manner and that is why you should consider whether you understand what they are before you start trading them. Forex traders in SA are known to be well aware of the intricacies in the market and that is why it is generally believed that they do better than their counterparts in much of the developing world. SA forex traders are also credited with a lot of success and the change that is being seen in the economy of the country.
Finally, successful forex traders in South Africa are those who can successfully navigate the markets under any circumstances. This is an universal truth that has to be accepted by all traders around the world and it is very important that they be very careful with their funds. It is always better to start off with a demo account and trade on it for a few months on it to see how they are doing with it. It is also very important for them to come up with a specific trading strategy to ensure that the risk is kept to the minimum. Though there are thousands of possible forex trading strategies, only a handful of them are likely to work in the long run and so the traders have to keep monitoring the markets and see the ebb and flow and be ready to change their strategies based on how the markets work.
It is easy to come up with a strategy that works at least for the short term but apart from back testing, the trader also needs to do forward testing for a decent length of time so that he can gain confidence in the strategy and also make sure that he is able to follow his strategy irrespective of what happens in the market. Many traders struggle to exit trades that are at a loss as they wait for the market to turn around In their favour and in this process, they tend to lose their entire account and blame the market for the same. This is a tendency that any trader needs to avoid at all costs and this is why demo trading becomes even more important for any trader that is starting out.
