ZAforexThe forex market
The forex market has no central exchange. Banks, brokers, companies, governments and individuals trade with each other electronically, 24 hours a day from Monday morning in Asia to Friday evening in New York. According to the Bank for International Settlements' 2025 survey, average turnover was about $9.6 trillion a day, with the US dollar on one side of roughly 90% of trades.
Who controls the forex market?
Nobody controls it outright. Prices are set by supply and demand among the large dealer banks (the "interbank" market). Central banks have the most influence: they set interest rates and sometimes intervene by buying or selling their own currency. In South Africa, the SARB lets the rand float freely, and forex dealing by the public is overseen by the SARB (exchange control) and the FSCA (brokers and products).
How a forex trade works
Currencies are quoted in pairs, such as EUR/USD 1.1000. The first currency is the base and the second the quote. If you buy EUR/USD you buy euros and sell dollars; you profit if the price rises. If you sell, you profit if it falls.
Example: you buy 0.10 lots (10,000 euros) of EUR/USD at 1.1000 and sell at 1.1050. The price moved 50 pips; each pip on a mini lot is worth $1, so you made $50 (about R900 at R18/$), before spreads and fees.
Leverage and margin
Retail traders usually trade forex as CFDs (contracts for difference) with leverage: you put up a small deposit (margin) to control a large position. At 1:100 leverage, R1,000 controls R100,000. That magnifies profits and losses, which is why most retail CFD accounts lose money. Use the margin calculator to see what leverage really means.
What moves currencies?
- Interest rates and central-bank decisions (Fed, ECB, SARB).
- Economic data: inflation, jobs, GDP.
- Risk sentiment and commodity prices (very important for the rand).
- Politics and unexpected events.
Forex vs stocks
| Forex | Shares | |
|---|---|---|
| Hours | 24/5 | Exchange hours (JSE 09:00–17:00) |
| What you trade | Currency pairs, usually as leveraged CFDs | Ownership in companies |
| Typical holding period | Minutes to weeks | Months to years |
| Income | Price moves only (plus or minus swap) | Price growth and dividends |
| Leverage | High | Usually none for share investing |
Is forex trading worth it?
Forex can be a legitimate career for a small minority of disciplined traders, but most beginners lose money, often through over-leveraging and scams that promise guaranteed profits. Start with a demo account, learn risk management, and read how to spot illegal schemes.
Frequently asked questions
What does forex mean?
Forex is short for "foreign exchange", the exchange of one currency for another. FX is the common abbreviation.
How does forex trading work in South Africa?
South Africans usually open an account with an FSCA-authorised broker, deposit rand, and trade currency pairs as CFDs on platforms like MT4, MT5 or the broker's app.
Is forex trading gambling?
It is not gambling by definition, but trading without a plan, risk control or edge behaves like gambling. Leverage makes it especially risky.
Who controls the forex market?
No single entity. Big banks set prices through the interbank market, and central banks have the greatest influence through interest rates and intervention.