Forex Trading is probably the market that most attracts the novices of online trading, attracted by presumed easy and immediate gains. There are rumors of South Africans who have found fortune thanks to it, and others of those who have gone broke due to investments in so-called “FX trading” or “Forex Trading in SA”.
What we should do is take the rumors for what they are, and that is “rumors”. It is therefore necessary to understand what are the real risks inherent in this type of financial speculation and above all to avoid all those online brokers with a dubious reputation. A cross and in-depth research on the best brokers in South Africa for forex trading on the internet is therefore not only recommended, but a must.
Before doing all this, however, you must be sure that you have understood what a foreign currency exchange actually is, especially Forex trading SA.
Forex Trading: what it is and how it works
Forex is nothing more than a form of trading in which instead of investing in financial stocks or commodities, you focus on the exchange between two currencies. This exchange occurs between the automatic and simultaneous purchase and sale of another.
This type of “trading” takes place thanks to a currency pair. The former is referred to as the base currency, while the latter is known as the quoted currency. Each currency is indicated by a three-letter code which contains the first two letters, which indicate the region of origin, and a final letter that indicates the currency. For example, USD is made up of:
- US: for “United States (of America)”, the region to which it belongs
- D: for Dollar, the currency
Foreign currency trading takes place mainly on a type of market called the OTC (Over the Counter) market. It does not have a real fixed physical reference, as in the case of stock exchanges, and currency exchanges take place mainly electronically thanks to the internet.
Among the most used instruments stand out among all financial derivative products called CFDs, an English acronym standing for: “Contract for Difference”. This type of products are mainly used via the OTC market and have the incredible advantage of being extremely flexible in terms of investment: think, in this type of investment you can earn whether the exchange, the trade, which takes place between a currency pair goes up. whether this falls inexorably.
Forex Trading: Things to Consider Before Going to a Forex Broker in South Africa
To be able to trade forex in South Africa, we must use the service of an online forex broker. The best forex brokers South Africa will allow us to execute trading operations by offering us the possibility of using an online trading platform.
Among the best online platforms to do Forex Trading in South Africa some stand out much more than others. One out of all today in 2021 is definitely eToro, an Israeli online brokerage service now famous all over the world. The eToro platform has implemented new online investment methods using mainly CFDs and combining these with a user-friendly interface and social outlines. In fact, to find out what are the current trends in the FX field (and not only) it will be possible not only to confront a large international community, but also to use an option called “copy trading”. Copy trading allows us to select a reputable and trusted trader, and set up copy trading on it so that the platform will automatically copy each trade.
Another renowned broker in the field of Forex Trading in SA is definitely ForexTB. Its platform also prides itself on being decidedly user-friendly, showing itself to us in a minimal form but supported by constant and attentive customer assistance. The focus on client traders is in fact also notable from the fact that ForexTB offers the possibility to follow a free trading course for newbies in the sector, which will be guided step by step in its financial adventure.
Nonetheless, we would like to point out that Forex Trading in South Africa can hide substantial risks and scams. In fact, we wanted to give you the aforementioned two brokers as an example also because they have all the appropriate certifications, authorizations and licenses, such as FSCA, FCA, and CySEC. These allow us to ensure a certain security on the legal side.
Beyond this, however, we want to conclude by specifying to our readers that despite the aforementioned legal protections, the exchange of foreign currencies remains a speculative-financial activity with enormous risks: the market is in fact plagued by constant volatility and the possibility of being able to lose everything that has been earned in a very short time is always around the corner.
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