For few years, especially after the pandemic, more and more people from Africa are joining the trading world. Every day the number of African traders is radically increasing as they discover new possibilities and opportunities in the Forex industry.
Many factors are influencing this rapid increase of African traders. Perhaps they find their way to Forex because of strict lockdown, security of income, or uncertainty to employment. Forex trading is a perfect market to increase your income for the time you spend in it.
Currently, Nigeria and South Africa are huge markets for trading. However, Botswana, Kenya, Rwanda, Tanzania, and Namibia markets are also radically expanding. There are more than 1.3 million traders in African markets. If you want to read more about Forex trading and brokers in Nigeria, you can visit here.
Why is Forex Trading exploding in Africa?
To understand the reasons for this hype, we need to go through some major factors:
1. Forex Market is Immense
The first and foremost reason for the increase in popularity is the market size. There are a handful of financial markets in the trading world. Comparatively, the Forex Market is the largest among these varied markets. Every day, more than $5 trillion worth of trading transactions occur there. Any other market is not even close to these numbers. People constantly exchange currencies for various reasons throughout the world, most importantly to conduct foreign business.
2. Lower Transaction and More Liquidity
Because a vast number of transactions take place every day, this market is very liquid. Furthermore, the execution of transactions is rapid throughout the world, which reduces transaction costs. African traders are using these lower costs to their advantage. Most traders also find the market more convenient than others. Furthermore, with more open positions, they get more opportunities for greater gains.
3. Strengthened Currencies
Besides Covid-19, many other economic and political conditions cause fluctuation in currencies. This conditional change makes currency values rise or fall. The pandemic influenced the currency of numerous countries.
However, the situation of African currencies contrasted with this rapid fluctuation. As the economic condition of Africa was already weak, it holds its position against other major currencies, including the US Dollar.
4. Accessibility of the Market
Approaching a Forex broker is comparatively when compared to other markets. The trading in this market takes place 24/5, regardless of time zones. African traders can easily access these markets as they are usually open for business at any time of day.
This indicates that African traders effectively use different time zones. In Forex trading, traders don’t have to stay in front of their computers throughout the day. They can easily trade through their phones while they are on the go. This flexibility and accessibility of Forex trading attract several traders to join this market. They can easily download the brokers’ app and start their trading careers.
5. Trading Flexibility
Due to lockdown, many people are working from home. These remote working conditions give people an opportunity to explore, learn, and implement new strategies and make their way through tough times. Forex trading does not bind traders to work from 9 to 5, or any specific time for that matter. They can trade full-time, part-time, or as a hobby. The flexibility of this trading market opens new opportunities for new traders.
6. Numerous Forex Brokers
Numerous brokers are available in the African markets. Therefore, traders can choose different brokers and boost their growth. Traders can easily compare the features and costs of a broker before picking them.
Many brokers also enable African citizens to register without paying registration fees. Furthermore, traders don’t need prior experience and knowledge to join those trading platforms. So, more and more traders from Africa are investing in the Forex market. A trader can also choose multiple brokers and avail of different benefits. This gives them a convenient option to trade and invest in the market.
These are few reasons for the sudden rise in the African trading market. Besides these reasons, there are professional choices, personal reasons, and differences of hobbies that are influencing the market. Many people love to join new trends in the market to earn substantial money.