Forex Trading In South Africa

Everything You Need to Know About Forex Trading In South Africa

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The emerging market trends favor investors knowing about cryptocurrencies and investments. Young entrepreneurs and strong business owners have a strong hand over those still learning about cryptocurrencies like bitcoins and how to invest in them.

South Africa contributes the largest share of trading value in the Africa continent. The fact that South Africans recently invested more than $2.5 million in Bitcoin shows the increasing popularity of Bitcoin. Here is everything you should know about forex trading in South Africa:

Contract For Difference

Contract For Difference (CFD) is the first term budding investors should know. It is a contract that helps you estimate the crypto market trend, and it ends when the parties involved in it equate the difference between the initial and final price of commodities or forex.

You have a golden chance to estimate how crypto would rise or fall. This speculation can give you high gains or high losses. You can choose whether to trade on mobile or at home with different platforms. In CFD trading, you buy or sell units instead of underlying assets, and your gain or loss depends on the point change.

You need to deposit a small amount of the total amount of trade you wish to do for CFD trading, which has a potential risk. CFD trading has some expenditures like holding costs, share-based commissions, and spread costs. Some of the leading trading platforms in South Africa are AvaTrade, Alpari, FXTM, and Trading 212.

Bitcoin

Bitcoin is a cryptocurrency that came out in January 2009 and is the leading cryptocurrency in the world. Almost every cryptocurrency investor started their journey by investing in Bitcoin. Platforms like Binance, Robinhood, and Coinsmart allow cryptocurrency trading. The investors in South Africa heavily invest in Bitcoin; a study suggests that 25% of South African investors own cryptocurrency worth $7-$70.

Bitcoin volatility

Volatility means fluctuations in simple terms. If an asset is highly volatile, it means that its value or price changes frequently, and investors should be careful while investing in it. The sole purpose of volatility is to increase the chances of profit for investors so that they can buy an asset for lower value and sell another asset at a higher value.

Bitcoin Trading In South Africa

Bitcoin is a highly volatile asset, indicating that its value can unexpectedly increase within a few hours. The reason for Bitcoin’s high volatility is the demand and supply. As it is an emerging trend and has many advantages, investors are ready to purchase this asset at any price, leading to its incredible high value. Due to its high volatility, many business owners and market trend-setters avoid accepting payments in Bitcoin.

Trends affecting Bitcoin

Volatility is one of the many features of Bitcoin that tells you about its fluctuating price. However, many external factors have a huge role in finalizing its value.

  • Tax

Governments of countries worldwide are now showing interest in cryptocurrency trading, and this interest will eventually lead to tax imposition. The South African Government has already imposed a tax on the profit through trading. This tax may control the trading market, or it may ask the investors to transfer a share of their profit through trading to the government.

  • Transaction Cost

If you have started cryptocurrency trading, you must have faced processing fees or transfer fees from the app or platform you use for trading. We cannot say whether these fees will increase or decrease, but they will not remain the same by the next few months. Some platforms may increase it, observing the increased interest of investors. Some platforms may decrease it to reduce competition by other platforms. Before you start investing in bitcoins you can find useful information online at https://trustpedia.io/

Precautions to remember while trading

You should not carelessly start investing in forex trading in South Africa. Keeping some precautions in mind will protect you from major losses. For example, local traders may cheat you of your money by showing fake stats, or you may fall into the tempting trap of investing a huge amount through online trading in an asset.

Conclusion

Investing in cryptocurrencies without knowing their details, nature, and factors affecting their value will likely make you face losses instead of gains. Therefore you should do thorough research and read the reviews of experienced South African investors to guide you in the right direction.

Image Courtesy: pixabay.com

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