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Johannesburg
Forex notes for South Africa
A forex guide that starts in rand, not in dollars
Most pages about this market assume a New York morning and an account in dollars. This one is written from here: what a USD/ZAR quote is actually saying, what the spread costs, and how to check a firm before any money moves.
Read them in this order
All the guidesStart here
Before you fund an account
What retail forex usually is in South Africa, and a first month that is supposed to feel slow.
The quote
When the rand is the home currency
How to read USD/ZAR, and why a higher number means the rand bought less.
The bill
What you pay to be in the trade
Spread, pip value and overnight financing, worked in rand on a tenth of a lot.
The size
Choose the loss before the lot
A worked R50 budget, and why a tenth of a lot can spend it on the spread alone.
The order
A stop is a request, not a lock
Market, limit and stop, and a 50-pip stop that the spread has already passed.
The clock
When the rand market is awake
Sunday night to Friday night in South African time, and the gap in between.
The firm
Check the name on the contract
How to use the FSCA register, and the small withdrawal that tells you more than a banner does.
One sentence that prevents a lot of confusion
If USD/ZAR rises, one dollar costs more rand. The rand has weakened against the dollar.
It says nothing, by itself, about the rand against the euro or the pound. Those are different pairs, with their own prices. The guide to rand pairs takes a sample board apart, including why the afternoon in South Africa is usually the cleaner part of the day to watch.
What a busy day looks like from here
Forex runs from Sunday night until Friday night, South African time. The exact open shifts by an hour when London or New York changes clocks. We do not. A useful sketch of a winter weekday is below. The hours guide is the longer version, including the weekend gap.
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From about 10:00
London starts pricing
USD/ZAR usually wakes up properly once London banks are in. Spreads often tighten compared with the small hours.
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From about 15:00
New York joins in
The overlap is the busiest stretch for many dealers. It is also when a surprise headline travels fastest.
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After about 19:00
The desk thins out
Liquidity in the rand fades. A quiet screen is not a cheap screen. The spread is often the tell.
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Around local news
The pair can jump
A rates decision, a budget line or a ratings note can move USD/ZAR further than a whole quiet morning.
What a small account is actually controlling
A deposit of R2,000 feels modest. On USD/ZAR, 0.10 lot is about 10,000 dollars of the pair, which at a price near 18.24 is roughly R182,000 of notional. The cash you sent is the margin. The pair moves the larger number. A quiet hundred pips, at about R1 a pip on that size, is already R100, and that is before the spread.
The cost guide turns the same size into rand per pip. The starting guide suggests a hundredth of a lot, and a notebook, before any of this is live money.
Ten afternoons, on paper
A useful first month is mostly writing. Pair, time in SAST, what you thought would happen, the spread on the ticket, and what the price actually did. The point is to see how often the spread, or a local headline, ate the idea before it had a chance.
What this desk will not do
Rank brokers
A “best broker” list goes stale, and we do not take placements. The check that matters is the legal name on the FSCA register.
Hold your money
Nothing here is an account, a product or a forecast. If you cannot afford to lose the deposit, do not send it.