Should You Believe the Hype Surrounding Forex in South Africa?
Sat 16 September 2017
You can't escape the hype around Forex Trading these days. You'll find online advertisements and success stories on social media that claim you can get rich through Forex Trading, effortlessly.
Go to Twitter and search for: #lifeofatrader.
Do you see what I mean?
Between pictures of guys posing with huge wads of cash or showing off BMWs and motivational posters that will have you believe that money grows on trees, you’ll also find guys wearing suits who are helping their clients grow their accounts.
But What Exactly Is Forex South Africa?
All the currencies in the world trade in a marketplace without a centralized location. This type of trading is also recognized as Foreign Exchange or Forex. The Forex Market has a large number of buyers and sellers, and changes in supply and demand. An estimated amount of five trillion dollars is traded daily.
Foreign Exchange is so important because you can't have successful foreign trade and business without the exchange of currencies. The reality is, anyone who has ever travelled abroad have experienced it at first hand.
Let me give you an example.
A South African visitor to France can’t join a guided tour of the Eiffel Tower to find out about its secret and history with the South African Rand (ZAR). The tourist must exchange his Rands for Euro (EUR).
Why Are South Africans Interested in Forex?
Many reasons surround why South Africans have interest in Forex Trading. Let’s look at the facts. South Africa's unemployment rate has hit a 13-year high with a whopping total of 27.7 percent of the population. While many people who are employed want to escape their day job or get rich quick to create a freedom lifestyle.
The Rand is also a popular choice among investors. The currency offers fluctuations and variety. South Africa is part of emerging markets associated with high potential returns compared to established and stable markets. The Rand has stabilized in line with other currencies due to the Reserve Bank. As a result, you can profit from free floating currency that can be exploited.
Why Has It Become So Popular in South Africa?
Forex Trading (using a broker such as ForexFactory) has been available within the last few decades but there were only five million worldwide internet users in 2008. In 2017, the number of internet users multiplied four times the amount with South Africans joining the latest craze.
The amount of exposure Forex Trading receives has been exponential since the meteoric rise of social media platforms. You can find real people on websites such as Facebook, Twitter and Instagram who show off their exuberant lifestyles that being a Forex trader offers.
What Are Advantages of Forex Trading?
· Forex trading happens 24/7, five days a week.
· Low cost to conduct Forex Trading
· Most OTC Forex brokers offer purchase securities or margin-based accounts
· Profit with short selling in the Forex Market
What Are the Disadvantages of Forex Trading?
· Beginners have a 95 percent chance to fail
· Guaranteed loss due to high volatility
· The market is full of scammers who prey on desperate people
· Educate yourself
Who Are the Ideal Candidates for Forex?
Forex Trading is ideal for people with Disposable Personal Income (DP) who want to invest money with potentially higher returns. Anyone with self-directed behaviour who can self-educate are also ideal candidates.
If you are someone who is emotional and impulsive, then Forex Trading may not be for you. When you make these decisions, it becomes difficult to effectively manage the related risks involved. Remember, never go into Forex without disposable income because trading requires practice and knowledge.
What Are the Rules and Regulations and How to Follow Them?
The regulatory agency of the financial markets in South Africa are known as the Financial Services Board (FSB). They monitor and regulate all non-banking financial intermediaries in South Africa.
You will need a Tax Clearance Certificate if you want to trade. Authorities are very conservative in foreign currency offshore. Taxpayers who are 18 years of age or older, and are natural persons, can invest up to four million ZAR, approximately $30000.
It’s also worth noting that the FSB doesn’t monitor the Retail Forex Market in South Africa. This has led to thousands of unauthorized people operating without a license.
Are Any of the Success Stories Real?
You can become successful trading currency at any age. Take for example 23-year-old Sandile Shezi, he was dubbed as South Africa's youngest self-made millionaire. There’s also Simz D'Mandla who reportedly made his first million at the age of 20.
Is the Hype Real?
No, the hype isn’t real. The recent surge of scammers who flaunt their luxurious lifestyles with fistful of cash are ripping people off who have been led by their desire for easy money. But there are legitimate opportunities available so you can profit trading the (ZAR) currency. It just requires different skill sets and abilities, and proper education.