Over the past few months, the coronavirus has spread across the globe. And somehow, this has caused a surge in the Forex market in Africa. According to statistics, the FX market is getting a boost on a daily basis. Traders are discovering more and more opportunities in this field.
In this article, we are going to find out how Forex trading is changing Africa. Forex trading offers an ideal platform for investors to earn some additional income from the comfort of their homes. Read on to find out more.
Why is Forex Trading Changing Africa?
Over the past six months, a lot of traders have started trying their luck in the Forex industry. And this is changing the economy of Africa for the better. Since many investors are unable to continue their business due to the pandemic, they are trying their luck in the FX industry.
1. The Forex Market is huge
Although there are a lot of financial markets, the Forex market is the largest one. It is interesting to note that more than 5 trillion dollars of transactions occur on a daily basis. By contrast, none of the other markets comes close to this figure. So, this is one reason that the Forex trading market is expanding across the country.
2. Lower transaction costs and Higher liquidity
Since a huge number of transactions are made on a daily basis, the FX market is extremely liquid. This is the reason that transactions are executed in seconds, which lowers the transaction costs. If the market was less liquid, people would pay higher fees against each transaction.
In Africa, people are taking advantage of reduced transaction costs in order to get started in the FX market.
3. Currencies are getting stronger
Although the coronavirus is spreading across the globe, many other factors are having an impact on currency prices. Covid-19 has had a negative impact on the economy of a lot of countries. And Africa is not an exemption. Many of African currencies have got weaker against other currencies.
Now that businesses are being opened gradually, many currencies are getting stronger against other global currencies, the FX market is expanding more and more in Africa. And this is the reason the FX market is seeing more and more traders and brokers.
The good thing about the Forex market is that it is easy to access with the help of a Forex broker. Besides, currencies are traded round-the-clock irrespective of the timezone of the traders. Traders in Africa can access this market whenever they want to. Apart from this, FX trading does not require traders to set in front of their computers all the time. In fact, they have the Liberty to execute transactions from anywhere as long as they are connected to the internet.
5. FX trading can be done anytime
Due to the ongoing pandemic, a lot of people spend all their time in their homes. Therefore, they can join Forex trading as a full-time job. With this opportunity, they can learn, explore, and apply a lot of strategies to gain success.
6. Variety of Forex Brokers
Another reason why Forex trading is changing Africa is that Forex traders can choose from a lot of brokers. Moreover, traders can open their accounts without investing any money. Based on their scale experience and knowledge, they can choose to work with the right broker.
7. It does not require a large capital
In Africa, traders can get started in the world of Forex trading without spending a lot of capital. With leverage, large positions can be opened irrespective of the initial deposit or balance in the trading account. However, leverage should be used properly or it may cause a lot of financial loss.
8. The option of Hedging
Hedging allows traders to limit the money that they can lose in a given time period. The idea is to make a lot of investments that have an opposite price action relationship. The purpose is to earn a lot of profit through locking the exchange rate upon opening our trade.
9. The Safe-haven Assets
Due to the frequent change in price movements, many African traders feel a bit overwhelmed when it comes to trading Forex. This is a reason many traders invest in safe-haven assets. In case you don’t know, these assets may include many currencies like CHF and JPY. The good thing about these assets is that their price movements are less volatile.
10. Anyone can be an FX trader
In Africa, anyone can get started in the world of Forex trading because they don’t have to spend a fortune. They can use a lot of educational sources, seminars, tutorials and guides in order to get started and to be on the safe side.
Apart from this, FX trading is more accessible as traders can use a lot of devices, such as mobile phones, laptops, tablets, and desktop computers to execute their trades. This freedom allows a lot of people to get started in this field of business as they can execute transactions from anywhere even when they are on the move.
11. Infinite possibilities
In Africa, traders can enjoy a lot of opportunities in the world of Forex market. For example, they can choose from a lot of strategies, currencies, trading platforms, and brokers. Infinite possibilities are another main reason buy Forex trading is changing Africa a rapid pace.
The sudden explosion of Forex trading in Africa has a lot of reasons behind it. In this article, we have discussed some of those reasons to give you a better idea of why FX trading is changing the face of Africa for the better. These are just some of the fundamental reasons that explain the explosion of Forex trading in this region. If you want to get started as a trader, make sure you consider these reasons. Hopefully, this will help you get started as a new trader. Getting success in the FX market requires a lot of patience in addition to skills and brains.