How to Start Forex Trading in Eswatini

Swazi investors who want to move into the forex market must learn how to move in an international space. There are no forex brokers located in Eswatini (formerly known as Swaziland), so everyone trading from the country does so from an offshore broker. Fortunately, there are many companies looking to expand into Eswatini and plenty of regulation in the region to keep investors safe from fraud.

Finding a broker that accepts the Swazi lilangeni can be a bit more difficult. The lilangeni has been pegged to the more popular South African rand at par since 1974, but some brokers still require investors to trade in a more liquid currency. The value of the lilangeni is tied to the economy of South Africa, especially in times of inflationary pressure. However, the Eswatini Central Bank retains the right to set the country’s interest rates freely to maintain the country’s economic balance.

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Disclosure: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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Get Started with Forex in Eswatini

You may have to perform more due diligence for forex investing in Eswatini, but you can join the global market with these tips:

1. Internet connection: Because you will be working with an offshore broker, your internet connection is very important. Make sure that yours is solid with no dropouts or downtime.
2. Vetted forex broker: The forex broker you choose should be regulated through a reputable financial authority. Top authorities include the Cyprus Securities and Exchange Commission (CySEC), the Financial Conduct Authority (FCA), the Securities Commission of the Bahamas (SCB) and the International Financial Services Commission (IFSC), among others.
3. Connected bank: Make sure that your broker connects with your bank for easy deposits and withdrawals. There may be fees for withdrawals, so check to see if they will be an issue for you. Processing speed is also important — you may need to cover a position on margin quickly if your account balance changes, for example.
4. Funded account: If your bank and your forex broker get along, you should be able to fund your investment account from your bank. Most brokers will also accept a major credit card or a newer fintech option like Skrill or WebMoney.
5. Trading interface: Your interface must have access to the interbank market from any device, including your mobile phone. Choose a trading interface that you can work from no matter where you are.
6. Starting to trade: Now that you have your setup going, you can safely trade in the forex market from Eswatini.

Attribution: Eswatini Central Bank

Swazi Forex Trading Strategies

Learning to trade forex successfully means choosing the type of trader you will be. Here are the blueprints that most people start.

Day Trading

If you enjoy the prospect of reacting to price action in real-time and earning profits quickly, then you may fit the profile of a day trader. Small profit, high-frequency trading is the strategy here. You take advantage of trades within seconds or minutes, giving the market no time to pull against you (hopefully). You may also make use of automated services to help you speed up the frequency of your trades.

Swing Trading

Swing traders are looking for obvious trends to develop on currency price charts. The trend may be a range or a directional move. These trades take place over the course of hours, days or weeks in some cases. The frequency of trading is not as high as day trading, although investors may be in many trades simultaneously. As a swing trader, you should become really good at identifying types of trends and investing based on that perceived movement.

Positional Investing

Long-term investors are also known as positional investors. They may stay in a single currency pair for months or even years before exiting the trade. Because these trades are informed by long-term patterns instead of trading indicators and chart patterns, positional investors do not worry about trying to trade around short-term events.

Forex Trading Example in Eswatini

Take this example: 0.0590/0.0610 is the current bid/ask price for SZL/USD. You want an order for E55,000. Your broker margin account will allow you to control an E55,000 investment with $256.41 cash in your account at a margin rate of 7.77%. 

The SZL/USD price after 7 hours is 0.0650/0.0670. This is a 40-point move. Your total profit on the investment is (E55,000 x 0.0650) – (E55,000 x 0.0610), or $220.

Making Money with Forex in Eswatini

Attribution: SwaziFX – A common forex daily candlestick chart with trade indicators

Once you have your investment blueprint, you can drill down your strategy into one or more of the following financial vehicles:

• Short selling: You can sell currencies instead of buying them, making your profit when you buy them back later for a lower price.
• CFDs: The acronym for contracts for differences, this financial vehicle allows you to trade currency value without owning the currency.
• Binary options: A simpler form of investing, this gives you a yes or no option instead of tracking currency prices directly.

Best Online Forex Brokers in Eswatini

Although there are no forex brokers local to Eswatini, you can find many offshore brokers that will extend business into the country.

Forex Terminology

Here is some of the most important terminology you will need to know when trading forex:

• Pip: Acronym for “percentage in point” or $0.0001
• Lot size: The size of your order
• Orders: The description of your buy or sell
• Calls: A contract for the future transaction of a currency pair

Getting Around the Hurdles

Yes, getting the right financial infrastructure to trade forex may be a bit more difficult in Eswatini. However, there are many forex investors in the country making use of offshore resources to join the global economy. Take your time to learn the regulatory structure of the market and the regulator protecting you individually as you do business with your chosen forex broker.

Frequently Asked Questions