Many novice forex traders in South Africa who make a foray into the FX market come with many expectations. Being profitable in Forex trading may not be easy but it is definitely an achievable target. Here are certain things to be kept in mind to make forex trading in South Africa a profitable venture for you.
- Choose an FSB-Regulated Broker: Forex trading is gaining popularity in South Africa, and with it new brokers are also setting up shop every day. You can invest your funds with either global or local brokers in South Africa. All reputed brokerage firms in the rainbow nation follow the strict oversight of the South African Financial Services Board (FSB) which keeps a check against financial crimes and irregularities. Always avoid brokerage claims that sound too good to hold true and carefully read reviews and recommendations etc. before opening a FX trading account. Also, to stay away from forex scams it is best to educate yourself about forex trading basics and learn as much as possible. Nowadays with the increasing popularity of forex trading in South Africa all such information is easily available online.
- Know About the Trading Regulations: South Africa has entered the forex trading market only recently as compared to other countries so it is important to be aware of its forex trading history and regulations before risking your money in the currency market. There are a complex set of rules regarding parking your funds offshore. The South African government hasn't declared forex trading to be illegal but there are very strict legislations in an attempt to retain as much money within the country as possible and for making it extremely difficult to trade with overseas brokerages. Thus it is best to open a bank account overseas first before starting a brokerage account as credit card use is much more restrictive for investing abroad than bank transfer.
- Be Aware of the Tax Laws: The gains acquired from forex trading are not exempted from taxes in South Africa even though your account and capital may be with some company abroad. It is mandatory for South Africans to pay taxes for income earned from trading either as an individual or company.
- Concluding Remarks: According to the South African government laws there are limits to the maximum amount you can invest in Forex Trading even if your trading account is registered in some other country. Thus, there might be a cap to your investment but your profits are uncapped. And that's not necessarily a bad thing. In fact, it means that you can be very profitable even by trading forex and following all the restrictions in the South African currency market.