For ex: If you want to trade USD/ZAR then the forex broker will quote you 2 prices, one will be the bid price & the other will be the ask price. And 'Ask price' is the price at which you can buy the base currency in the pair. It simply means that the South African Rand has appreciated in value against the US Dollar, where it’s valued currently at 1 USD at 14.454 ZAR.Ģ) Bid & Ask prices: 'Bid price' is the market price at which you can sell the base currency. If you hear the local business news or a trader talks about the currencies like: "The South African (ZAR) edged higher againt the Dollar today, reaching a two-week high of 14.454" Currency Pair Terms:ġ) Base & Quote Currency: In every currency pair like EUR/USD, USD/ZAR, the first currency mentioned is the ‘Base Currency’ which is being compared to the second currency called ‘Quote Currency’.įor example, in EUR/USD, Euro is the Base Currency and the US Dollars is the Quote Currency. You will hear a lot of these terms commonly while trading, so let's start. Here we will explain all the important terms that you must know before understanding more about forex trading. Don't worry, we will be explaining everything in the next chapters of this guide! In theory, Retail forex trading through an online broker is similar to currency exchange, but still there is more to it. The difference of R0.30 (15.00 – 14.70) between the rate given to you by the bank & the actual market rate, is the profit margin for the bank/exchanger. If the ZAR's exchange rate in the live market is R14.70 per USD, then your exchanger/bank would probably give you a rate of R15 per USD, or maybe even higher. This rate is continuously fluctuating every second as the forces in Forex market determines the rate. The rate at which you can exchange your currency to another is called the Exchange Rate. When you are exchanging your money for travelling abroad, you (through your bank) are making a forex transaction in the global forex market without even knowing.
In this example, you would be physically selling your home currency (South African Rand) for buying US Dollar.
Let's assume that you exchange R15,000 for $1000 through your bank or local regulated exchanger, for travelling abroad to US. If you exchanged your currency before, then you have already traded in the forex market. South African Rand (ZAR) to another currency like Euro or a US Dollar. If you been to a foreign country, then it is likely that you may have converted your local currency i.e.
Have you travelled abroad to another country?
How to start forex trading in south africa how to#
You likely want to get the answers to all your questions, but don’t know where to start? This guide will show you the basics on how to get started with forex trading as an absolute beginner. We will try to cover everything you must know before you can start trading & how much does it take to get started? But there are many risks are well associated with CFD trading. It is likely that you want to start trading forex as an investment instrument because of the higher market liquidity, 24/5 market hours & quick pace. Also, South African Rand (ZAR) is one of the top 20 most traded currency in the world with annual trading volume of almost $70 billion USD in 2016. The daily turnover of forex trading in SA is estimated to be around $19.1 billion USD per day in 2017. South Africans can legally trade in the foreign exchange market via any FSCA regulated forex broker authorized for offering Derivative instruments to traders in South Africa. Retail Forex Trading involves speculating on the rise and fall of currencies with an aim to make a profit.
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