With the increasing popularity of Forex trading in South Africa, most people want to get into trading. Question is where does one even start.
In this post we explain to you how to open a Forex trading account, the post will be divided into six steps.
- What’s a broker
- Type of Brokers
- Finding a Good Trading Broker
- Creating the Trading Account
- Submitting your documents
- Login to your account.
What’s a Broker
According to Wikipedia, a broker is a person or firm who arranges transactions between a buyer and a seller for a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Wikipedia
Type of Brokers
There are two main two types of forex brokers:
- Dealing Desks (DD)
- No Dealing Desks (NDD).
What is a Dealing Desk Broker?
Forex brokers that operate through Dealing Desk (DD) brokers make money through spreads and providing liquidity to their clients. Also called “market makers. Dealing Desk brokers literally create a market for their clients, meaning they often take the other side of a client’s trade. Most of the orders don’t go to the Banks
What is a No Dealing Desk Broker?
As the name suggests, No Dealing Desk (NDD) brokers do NOT pass their clients’ orders through a Dealing Desk. This means that they do not take the other side of their clients’ trade as they simply link two parties together.
Finding a Good Trading Broker
A good broker should be regulated, you shouldn’t use a non-regulated broker. Below is a list of Regulated Brokers you can use in South Africa
Creating the Trading Account
Creating a trading account is simple and straightforward, it’s almost similar to creating a Facebook or Instagram account. To create the trading account you will need to visit the broker’s website accounts. On the website, they’ll have a registration Page.
In most cases, you’ll be prompted to enter your personal information when you are done the broker will send you a confirmation email that your account was successfully created.
Submitting your documents
In order to deposit and start trading with real money, most brokers will require you to submit your documents for verification. These documents can be Bank Statements or municipality documents. They do this to verify your identity and avoid money laundering.
Login to your account.
After the documents verification, you’ll be ready to deposit money and you can start trading with real money. If you’re new to trading and need more help click here to get our free Beginners Guide
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