Forex trading is a promising way to earn in South Africa. Most Forex traders in South Africa use international brokers to trade with. International brokers offer more premium services. However, foreign traders use USD as the base currency. It is beneficial in a few aspects. However, there are a few tradeoffs of trading in USD account as well.
This article will aim to shed some light on the ZAR trading account.
Table of Contents
ZAR trading account – What is it?
A ZAR trading account means that you trade in ZAR instead of USD. Additionally, you can deposit money in ZAR. Brokers are also required to keep their money in South African Rand.
USD vs. ZAR currency comparison
A US dollar is worth 15 ZAR.
1 USD = 15 ZAR
USD doesn’t fluctuate in the market much either. In most markets, USD holds its worth.
History
ZAR was launched in the international market in the 1960s for the first time. Since its launch, ZAR has been slowly losing its value. South Africa’s economic condition is the major reason behind ZAR’s demise. However, it is still not completely irrelevant by any means.
Over the past few years, ZAR has been showing minor yet steady improvements. ZAR started as R20/1$. Now ZAR is at R15/1$. Thus, if you are thinking about opening a ZAR trading account, now is the time to do it.
CFD definition is it is a type of derivative trading in which the trader does not own the underlying asset. The trader assumes the price risk of the underlying asset without taking ownership of it
Benefits
There are several reasons to consider opening a ZAR trading account.
No fees
Traders have to pay transaction fees if they trade with foreign brokers in USD. ZAR trading accounts are free of any transaction fees. Traders won’t have to pay for deposition and withdrawal fees.
Local brokers
Local South African brokers often offer ZAR trading accounts. Local brokers are based in your own country. Hence, you can visit their office and make local trades hassle-free.
Segregation of funds
Local brokers are required to keep the traders’ funds in different vicinity. Segregation ensures the safety of your account and funds.
Authorities
Local authorities monitor ZAR trading brokers closely.
ZAR trading brokers
Not many brokers offer ZAR trading accounts currently. A large number of traders do not use ZAR accounts. Hence, brokers don’t focus on ZAR accounts.
Local brokers who do offer trading in ZAR are usually not on par with their international competitors. Traders have trouble finding a good ZAR trading broker.
Here are a few reputable brokers who offer ZAR trading accounts.
- HotForex
- Exness
- XM
- Plus500
- AvaTrade
- Blackstone futures
Local regulation
The ZAR trading brokers are regulated locally by the FSCA. FSCA is considered a lenient regulator. People prefer CySEC authorities. However, locally you should be fine to trade with the brokers we included in our list above.
No conversion loss
Traders often lose money while trading in USD due to currency conversion rates.
New trading benefit
As a new trader, we recommend you to trade in a ZAR account. ZAR accounts are safer in terms of lesser loss probabilities.
Summary
Many South African brokers offer ZAR trading accounts. You might lose some features if you use the ZAR account. However, new traders should lean towards ZAR trading accounts.