Forex trading account south africa
If your broker extends a leverage of 1: Now, you may be wondering why your broker will allow this. The answer is simple. The broker understands very well how slowly currency markets can move. For a trader to earn considerable amounts of profits within a short time frame is to trade a huge amount of money. If you buy 10, Euro through your broker at the current rate, and sell them after 48 hours at 1.
The 4 th decimal in the exchange rate is the pip. The broker is aware that while you earned a US dollar profit in a matter of 2 days, his risk is likewise limited to a 2-day time frame. Even if the trade goes south and he loses money, he will not lose a significant amount of money. If the worst thing happens and the loss wipes out you entire deposit, your broker will close the trade automatically, effectively limiting the loss only up to the extent of your deposit.
To sum it all up, leverage is offered by brokers to encourage traders to take on bigger risks with the potential of making much bigger profits within short time periods by trading a bigger amount of money. If you trade more, your broker potentially earns more as well. This is because of what is known as the spread. To explain in simple terms, a spread is the difference between the price to buy and sell a currency pair.
The great thing about it is than in forex trading, spreads are extremely low. This is because the spreads are forced down by the fierce competition among the many foreign exchange brokers. Simply put, low spreads are intended to lure many potential clients in. While there are, unfortunately, no reputable forex brokers in South Africa, traders still have a viable option to take advantage of the earning potentials offered by the forex market. That is to make use of the services of a foreign-based or offshore forex broker.
The good part is, there are numerous international brokers that are willing to work with South African traders. There are international brokers that allow you to open an online account in as fast as 5 minutes. You can make a deposit using your debit card or a number of online payment options including Webmoney, Skrill, Neteller, Paysafecard, Cash U, and others.
You also have the option to make bank transfer arrangements if you opt to make bigger fund withdrawals or deposits.
I have already checked out the biggest foreign exchange brokers all over the world, and have listed the ones whom I think are most favorable for South Africans.
List of Forex Brokers accepting traders from South Africa: Rank Broker Offer Trade Now 1. What currency pairs is the Rand part of? The Rand is a very popular currency among Forex exchanges and can be found as part of many currency pairs.
This is why most South African traders are interested in Forex trading, as they have plenty of resources regarding the USD and GBP, but also know more about their local economy than traders outside South Africa. Why is the Rand popular among Forex traders? Just like the Australian and Honk Kong dollars, the reason why the Rand is a popular choice is because of the fluctuations and variance it offers.
In South Africa, the Rand is stabilized against other currencies to some extent by the Reserve bank, which gives it gives it some free floating space that can be exploited for profits, as it fluctuates more wildly against other, more stable currencies.
Is Forex trading taxable in South Africa? Any profits you make with Forex trading are taxable, just like your regular income, which means you have to file a Personal Income Tax form. You can also list the profits on your ITR12 as foreign income.
Will I be charged any Trading Fees? However, there are still other fees to keep in mind. For example, it is a common practice to charge small fees for keeping your trading account open, but also withdrawal fees, which depend on the payment method you want to use.
What currency pairs are the best? It depends on your personal preference. How much money am I allowed to transfer back to South Africa? To protect this area, the Reserve Bank prohibits any South African citizen to import or export Rands or other bank notes from the common area that exceed more than ZAR 25, in value, per person.
Can I Increase my Single discretionary Allowance? That is, not by yourself. However, make sure you consult a professional before you do so. Can I send more than 10 million Rands off-shore?