Fore traders are often confused when it comes to choosing the currency. The risk per pips depends on the currency you have chosen. For some currencies, you will play safe, and it is up to you to choose the right one. If you are a South African trader who wants to know about the best currency for forex trading, you should consider comparing the USD and ZAR accounts. It is extremely important for South African investors, as they can save a big deal.
To make it short, let us clarify one thing, forex broker with ZAR account are safer than the ones that have USD accounts. In this article, we will help you understand how and why it is possible.
Before we start, we will share a few preliminary and essential details about the ZAR accounts, too, so that you must understand if you are actually using the right accounts or not. We will also discuss the trends and differences between the ZAR and USD.
What is a ZAR account?
As the name implies, the ZAR account is the one in which you will be managing your investment in Rand currency instead of the international $ currency. It is the best choice for the South African traders as they will get to understand the investment, loss, and profits better then.
Benefits of having ZAR accounts
If you are still confused, then it is better to first understand why it is important.
Lesser volatility risk
When you are trading through a ZAR account, you will be investing safely. The ZAR and USD volatility risk is quite low; you will not fear any loss. It is the best for beginners. However, the experts who wish to invest and earn more profits might not look for a lesser volatility account, as they will not get greater profits with lesser volatility.
On the other hand, someone who is only investing a little money and is fearing losing it will play safe with lesser volatility risk.
Many people tend to think that it is better to invest with lower liquidity. Well, it is not the case when you want to earn faster. The higher liquidity for a ZAR and USD pair will ensure that you can easily take out your money without any problem.
It will be far easier for a local South African to analyze the ZAR account, as it will be according to the local currency. With a ZAR account, it will be very convenient to understand market trends for the chosen equity and commodities. Moreover, if you are busy and do not want to get into any kind of calculations, it is better to have a ZAR account.
History of ZAR account
The ZAR currency was introduced quite late for the forex trade in 1961, and since then, this currency has not performed much. It has been depreciating. So you will be investing a huge amount even for buying the tiniest commodity. However, you will get a huge amount in return, as the outside world is trading in the international currency.
The minimum Lot size
The minimum lot will decide the risk per pip; the smaller the lot size, the lesser risk it would pose. With ZAR accounts you can have the minimum lot size that is 0.0007 USD. It is one of the minimal lot sizes, which makes you less vulnerable. It is only possible through ZAR accounts.
Minimum exchange fluctuations
Exchange fluctuations are the game-changer in forex trading. Choosing a currency account with a higher exchange fluctuation means that you have invested through a risky currency pair, and it can disturb the profits. You will be unable to work out any estimate this way. The ZAR value is quite low, as compared to the dollar, so your profit is fixed.
Local bank facilities
Having a ZAR account will increase the chances of connecting with the local South African bank accounts for a South African. It will then ensure easy withdrawal and deposit through bank wire or other local platforms in the same currency, moreover, the local banks will not charge you more. On the other hand, if you connect some international virtual bank, you will get to pay the fee in dollars or other international currency, which will become costly.
The accurate synchronization with the market
For a beginner, it will be tough to understand the different market dynamics, so it is better to stay in a familiar currency. The ZAR market is slightly different than the other currency, it has different trends. A layman and native can easily discern what to do when the economy is in crisis, and invest wisely then.
Best brokers for ZAR accounts
If you are wondering how to find the best ZAR account broker, then we have enlisted a few reliable brokers.
- The Blackstone futures.