The global forex market is booming and Africa has seen a significant increase in traders and brokers in the last few months.
Since the COVID-19 outbreak with the resulting government-enforced lockdowns around the globe, economies have weakened and several businesses have suffered, sending the unemployment rate across the globe skyrocketing.
The unemployment rate across Africa soared, with numbers increasing to more than 30% in South Africa and 23% in Nigeria, changing the fortunes of forex trading in Africa as many people had to scout for new opportunities to provide for their families.
As it happens, South Africa and Nigeria are also Africa’s two largest economies, and the increasing number of forex traders in these two countries alone has impacted the forex markets greatly.
Even the employed are exploring new means of additional income. The forex market is easily accessible and more than $5 trillion is traded each day.
The market is open 24 hours a day, 5 days a week and all a potential trader needs is an internet connection and a smart device, laptop or PC, making forex trading an ideal way to earn money from anywhere in the world.
A strong rivalry among different brokers and the need to offer better trading conditions than the next broker is another reason trading has increased recently in Africa.
Africa’s youth is eager to learn, technology is advancing, costs and fees are decreasing and more financial instruments such as CFDs, commodities, stocks and indices are being offered to cater to the needs of all traders across the African continent.
The fact that Africa’s currencies are starting to perform better and the economy is stabilizing also has a great effect on forex markets. The South African Rand is one of the most traded currencies in the world and is steadily getting stronger.
African forex brokers offer a very high leverage, which can maximize profits when understood and used correctly.
In 2018 new restriction laws were put in place by the European Securities and Markets Authority (ESMA). These restrictions handicap traders in terms of their profit potential, which has prompted them to move to the greener pastures of the African markets.
The FSCA of South Africa allows for unlimited leverage ratios, and while the organisation is not as strict as many other regulators, it has taken steps to enforce client protection measures which mitigate the risks of trading on higher leverage.
Improvement should soon be visible for other African countries such as Nigeria, which will result in Africa’s forex numbers increasing even more.
As most of the African countries are still in the process of forming regulations with regards to forex trading, potential investors are advised to only select brokers that are regulated and in compliance with financial institutions.
The jseshares.co.za domain (the website) is owned by the SEOPros Pty Ltd. JSE Shares endeavours to ensure the accuracy and reliability of the website and the content, materials and products included and available on the website but because of the possibility of human and mechanical error as well as other factors, to the extent allowed by law, JSE Shares does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the availability, truth, accuracy, completeness or reliability of such information or that it is always up to date.
In the circumstances, and to the extent allowed by law, neither the JSE Shares nor any of its directors, officers, employees, contractors, agents or representatives are liable in any way for any loss or damages as a result of the use of or reliance on information provided on the website. The above wording limits and excludes obligations, liabilities and legal responsibilities of JSE Shares, and also limits and excludes your rights and remedies and places various risks, liabilities, obligations and legal responsibilities on you.
Editors’ Picks
EUR/USD climbs to daily highs near 1.1820
EUR/USD now picks up pace and advances to the area of daily peaks north of the 1.1800 barrier at the end of the week. The pair’s decent move higher comes against the backdrop of a generalised lack of direction in the FX galaxy and the mild offered stance in the US Dollar.
GBP/USD trims losses, retests 1.3460
After briefly challenging its key 200-day SMA near 1.3440, GBP/USD now manages to regain some balance and revisit the 1.3460 zone on Friday. Cable’s pullback comes as the selling pressure on the Greenback gathers traction, reigniting some recovery in the risk-linked space.
Japanese Yen gives back half of early gains against USD ahead of US PPI data
The Japanese Yen (JPY) surrenders half of its early gains against the US Dollar (USD) during the European trading session on Friday. The USD/JPY pair rebounds to near 155.90 as the JPY falls back, but is still 0.15% down.
Editors’ Picks
EUR/USD: Fed calm, ECB steady, but the Dollar still leads Premium
EUR/USD is still struggling to find real traction. The pair has tried to stabilise, but momentum keeps fading, leaving the door open to further weakness.
Gold: Falling US yields, geopolitics help XAU/USD hold ground Premium
Gold (XAU/USD) gained traction and climbed above $5,200, ending the fourth consecutive week in positive territory. The next round of US-Iran talks and crucial macroeconomic data releases from the US will be watched closely by market participants in the short term.
GBP/USD: Will Pound Sterling defend key 1.3450 support ahead of US jobs data? Premium
The Pound Sterling (GBP) entered a bearish consolidation phase against the US Dollar (USD), after having tested critical support near the 1.3450 level on several occasions.
Bitcoin: Another month of losses, and it’s been five
Bitcoin (BTC) price is stabilizing around $68,000 at the time of writing on Friday, but the Crypto King is poised to close February on a fragile footing, marking its fifth consecutive month of losses since October and a rare start to the year with back-to-back monthly corrections.
US Dollar: At a crossroads; Fed steady, tariffs in flux Premium
The US Dollar’s (USD) upward momentum from the previous week seems to have encountered a tough nut to crack in the 98.00 region, as measured by the US Dollar Index (DXY).
RECOMMENDED LESSONS
Making money in forex is easy if you know how the bankers trade!
I’m often mystified in my educational forex articles why so many traders struggle to make consistent money out of forex trading. The answer has more to do with what they don’t know than what they do know. After working in investment banks for 20 years many of which were as a Chief trader its second knowledge how to extract cash out of the market.
5 Forex News Events You Need To Know
In the fast moving world of currency markets where huge moves can seemingly come from nowhere, it is extremely important for new traders to learn about the various economic indicators and forex news events and releases that shape the markets. Indeed, quickly getting a handle on which data to look out for, what it means, and how to trade it can see new traders quickly become far more profitable and sets up the road to long term success.
Top 10 Chart Patterns Every Trader Should Know
Chart patterns are one of the most effective trading tools for a trader. They are pure price-action, and form on the basis of underlying buying and selling pressure. Chart patterns have a proven track-record, and traders use them to identify continuation or reversal signals, to open positions and identify price targets.
7 Ways to Avoid Forex Scams
The forex industry is recently seeing more and more scams. Here are 7 ways to avoid losing your money in such scams: Forex scams are becoming frequent. Michael Greenberg reports on luxurious expenses, including a submarine bought from the money taken from forex traders. Here’s another report of a forex fraud. So, how can we avoid falling in such forex scams?
What Are the 10 Fatal Mistakes Traders Make
Trading is exciting. Trading is hard. Trading is extremely hard. Some say that it takes more than 10,000 hours to master. Others believe that trading is the way to quick riches. They might be both wrong. What is important to know that no matter how experienced you are, mistakes will be part of the trading process.
The challenge: Timing the market and trader psychology
Successful trading often comes down to timing – entering and exiting trades at the right moments. Yet timing the market is notoriously difficult, largely because human psychology can derail even the best plans. Two powerful emotions in particular – fear and greed – tend to drive trading decisions off course.