Forex Trading in South Africa

As a time zone takes over from the other, it makes for continuity of the business hours, making the market a hour market. The time zones sometimes overlap, and the hours with the greatest market volatility are those found when the London Trading Time Zone overlaps the New York time zone.

This overlap occurs between 8 am and 12 noon EST. Therefore, it would make sense to trade forex in South Africa during this time. This time zone corresponds to 9 am to 11 am, South African Standard Time. Illustrative image of different time zones.

What is the best time to Trade Forex in South Africa to make highest profits

Another school of thought dwells on the timing of the news on any given day. The news releases from South Africa that tend to move the market typically occur either in the active periods of the London session or just before the overlap of the London and New York trading sessions. Therefore, those who trade the news can also argue that these may be the best times to trade forex in South Africa. Some of the major market news such as Industrial Production, interest rate decisions, and employment data, fall within these trading hours.

If you want to open a long position, you trade at the buy price, which is slightly above the market price.

Preferred Currency Pairs to Trade

If you want to open a short position, you trade at the sell price — slightly below the market price. Currencies are traded in lots — batches of currency used to standardise forex trades. As forex tends to move in small amounts, lots tend to be very large: a standard lot is , units of the base currency. Leverage is the means of gaining exposure to large amounts of currency without having to pay the full value of your trade upfront. Instead, you put down a small deposit, known as margin.

When you close a leveraged position, your profit or loss is based on the full size of the trade. While that does magnify your profits, it also brings the risk of amplified losses — including losses that can exceed your margin. Leveraged trading therefore makes it extremely important to learn how to manage your risk. Margin is a key part of leveraged trading.

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It is the term used to describe the initial deposit you put up to open and maintain a leveraged position. When you are trading forex with margin, remember that your margin requirement will change depending on your broker, and how large your trade size is. Margin is usually expressed as a percentage of the full position. Pips are the units used to measure movement in a forex pair. A forex pip is usually equivalent to a one-digit movement in the fourth decimal place of a currency pair.

The decimal places shown after the pip are called fractional pips, or sometimes pipettes. The exception to this rule is when the quote currency is listed in much smaller denominations, with the most notable example being the Japanese yen. Here, a movement in the second decimal place constitutes a single pip. Instead, there are several national trading bodies around the world who supervise domestic forex trading, as well as other markets, to ensure that all forex providers adhere to certain standards.

Gaps do occur in the forex market, but they are significantly less common than in other markets because it is traded 24 hours a day, five days a week. However, gapping can occur when economic data is released that comes as a surprise to markets, or when trading resumes after the weekend or a holiday.

Although the forex market is closed to speculative trading over the weekend, the market is still open to central banks and related organisations.

So, it is possible that the opening price on a Sunday evening will be different from the closing price on the previous Friday night — resulting in a gap. The tax on forex positions does depend on which financial product you are using to trade the markets. When you trade via a forex broker or through CFDs, any gains to your forex positions are taxed as ordinary income. However, your losses are also considered as ordinary capital losses, which means that you can use them to offset any other tax.

Be aware of the risks associated with forex trading and understand how IG supports you in managing them. Clients: Help and support. Professional clients can lose more than they deposit. All trading involves risk. South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance. Such trades are not on exchange. The information on this site is not directed at residents of the United States or Belgium or any particular country outside South Africa and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

IG Group Careers Marketing partnership. Inbox Community Academy Help. Political or military crises that develop during otherwise slow trading hours could potentially spike volatility and trading volume.

Forex traders should proceed with caution because currency trades often involve high leverage rates of to 1. Once investors learn the ropes and become seasoned enough, then they can confidently begin making real trades. The Balance does not provide tax, investment, or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.

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