Average Salary of a Southafrican Forex Trader
How much do I need to start Forex trading in South Africa?
Have you been wondering how much do I need to start forex trading in South Africa? Although you can start out with just a small amount of money, if you want to make big returns, you're going to need a big balance. The amount of money you make trading will always be related to the size of your trading account, so if your account is too small, your returns will be the same.
Trying to generate big returns with a small amount of money is a sure-fire way of ending up with a blown account, wiping out all your hard work, and we want to avoid that.
Table of contents
- It's time to move on from the minimum deposit
- How much do you need to invest
- How much do I need to start trading forex semi-professionally?
- What if you stacked your profits instead of spending them?
- Are you serious about forex trading?
It's time to move on from the minimum deposit
One of the great things about forex is just how easy it is to get started. You should be able to open a forex trading account in South Africa with as little as 1000 ZAR, but trying to generate a full time or even part-time income with such a small account is all but impossible.
Forex brokers set small deposits so you can get comfortable trading in a live environment, hone your edge and move on to trading a modest account, if you've been trading the minimum for a month and you know what you're doing, it's time to move on.
How much do you need to invest to start trading forex full time in South Africa?
The median income for South Africa is approximately 45 000 ZAR per month, lots of people earn more than this and most earn less, but this is a good starting point to assess how much you'd need to invest in yourself to trade forex full time.
Professional traders can generate 10% or more per month trading forex so we'll use that figure to work out how large a balance you'd need to generate 45 000 ZAR per month – 450 000 ZAR.
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If you can't make 10% per month you're going to need to invest a larger amount if you want to pay that mortgage. You should also have some kind of buffer to draw on for when the market is unkind, even traders who average 10% a month will have a bad month every now and then. The big question, can you make a living trading Forex?
What about as a side hustle – how much do I need to start trading forex semi-professionally?
450 000 ZAR is a lot of money for most South Africans, if you do have that much money in your bank account, chances are it is set aside for your first home purchase.
So how much would you need to start trading forex in South Africa as a side hustle?
If you're not trying to pay your rent or mortgage through forex trading, you don't need to invest anywhere near as much money, but you still need to invest enough to make it worth your time and achieve your goals. The exact amount you need to invest will vary from person to person, but let's look at an example that you can then adapt for your own goals. Say you earn just 35 000 ZAR per month and your wife wants that new car your neighbours just bought. Your neighbours earn more than you, so you're going to need to work something out if you want to keep your better half happy. In order to earn the median salary of 45 000 ZAR per month, combined with your existing job which provides 35 000 ZAR per month, you're going to need to generate an extra 10 000 ZAR per month from your forex trading. That means if you can earn 10% per month in the forex market, you're going to need a trading balance of 100 000 ZAR to meet your goals. If your monthly returns are smaller, you will need a larger balance. Though this is still a significant amount of risk capital in South Africa, it's obviously not an impossible savings goal with some shrewd spending and the right mindset. Semi-professional trading is the ideal place to start if you really do want to make the leap to trading forex professionally 24 hours, 5 days per week. Another great thing about trading around your existing job is you have the luxurious option of leaving your trading account to grow whilst living off your salary. In our previous example, you made an extra 120 000 ZAR per year withdrawing your 10 000 ZAR profit each month, but what would have happened if you'd left those returns to grow? To work this out, you take your starting balance (100 000 ZAR) and multiply that by your monthly return (10%) to the power of 12 (the number of months in the year) On a scientific calculator, this should look something like 100 000 x 1.1 ^ 12 and you should get 313 842 ZAR as the result. If you then subtract your starting balance of 100 000 ZAR, and the 120 000 ZAR profit monthly withdrawal guy made, you are in front of him by a whopping 93 000 ZAR in just one year. The power of compounding returns should never be underestimated, can you put the new car off for another year? If you can trade like that for another 12 months, chances are you will have enough money to trade professionally – let's see: 313 842 ZAR * 1.1 ^ 12 = 984 970 ZAR Not only do you now have enough money to throw the job in and start trading full time, but you also have enough money to buy that car and take a holiday – the power of compounding returns can not be overstated. How much you need to start forex trading in South Africa will vary a lot from person to person, depending on their unique circumstances and financial goals. One thing that will remain constant though is the need to make an investment in line with your goals. If you want to make 100 000 ZAR more per year, how much do you need to invest to do so? Invest that amount. If you want to make 450 000 ZAR per year then you're going to need a serious trading account, so you better get building. Minimum account deposits are great for learning how to trade, but once you've done that, you need to take a serious look at your financial goals and how much you'll need to invest to achieve them. Remember, an investment in your trading account is an investment in yourself. Heinrich is a forex and CFD enthusiast with a passion for writing good informative quality content. He strives to showcase the best forex brokers in Africa. Join him on his Journey! Content Writer | Market Analyst You've probably heard the term forex but have no clue what it's all about. Read… read more + Trade Popular Forex Pairs with our Top 3 Brokers. [top_three_brokers] This is your quick guide… read more + There's been an increase in popularity with CFD trading in South Africa. With an increase… read more + The big question on every new trader's mind: How does Forex trading work? [table_of_contents] Your… read more + Have you ever wondered how to trade forex in order to generate supplemental income or… read more + [table_of_contents] Your quick guide to Forex trading in South Africa, answering the big question on… read more + If you are not familiar with Forex trading and want an opportunity to make money,… read more + [table_of_contents] One of the most fundamental topics is knowing what is the Spread in Forex?… read more + [table_of_contents] Have you opened a new trading account and want to understand what is leverage… read more + Like other financial markets, forex has a bid and ask price. These prices update in… read more + 
What if you stacked your profits instead of spending them?
Are you serious about forex trading?
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Average Salary of a Southafrican Forex Trader
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