Over the past 10 years and particularly within the past 2 years, retail foreign exchange trading in Africa has evolved to an impressive point due to a variety of reasons.
- Weak local currencies: In most African countries, the weak nature of our local currencies presents a lucrative opportunity for common man. The concept of “Earn in a foreign currency, spend in your local currency” has been on the rise.
- The Covid 19 pandemic and the resulting lockdown opened up a new perspective for a lot of people. With the shutting down of businesses and having people confined to their homes, we all started to look to the retail FX market as an alternative source of income.
- Improved telecommunications, increasing access to the internet across the continent, as well as rising unemployment rates have paved the way for more people looking to earn a living through trading on electronic trading platforms.
Although retail forex trading in Africa only represents 5.5 percent of the global currency markets, the growth potential of the industry cannot be ignored, especially in countries like South Africa and Nigeria, both of which accounts for over 50 percent of Africa’s forex trading volume with over 2 million traders combined.
Trading Innovations So Far (Pros and Cons)
Over the years, we realize that although millions of people want to profit from trading the retail FX market, only a very small percentage do, due to reasons such as lack of the knowledge/skill required to stay consistently profitable, not enough time to commit to trading, emotion-based trading, and the lack of proper money management.
As a result, different methods are being introduced to help more people become profitable.
Account Management by Expert Analysts:
Investing in an expert analyst or a professional money manager is a very common trend. In this situation, investors either pool their funds into a central account to be managed by an expert or the expert is given access to their trading account to perform the trading activities, and at the end of an agreed period, profits are distributed and the analyst is paid. When entrusted to a professional, this method can prove to be a sustainable and consistent source of income.
In some cases, the investor has full control over their capital while in other cases, the investor has no control. Although, in both cases, the investor carries the risk of partial or total capital loss based on the analysts’ performance.
Automated Trading Robots (Expert Advisers):
Rather than giving their capital to someone else, most traders with some technical experience prefer to connect a trading robot to their accounts (although easy-to-use robots are also available for newbies as well). These robots are either run on a local network or remotely via a Virtual Private Server (VPS) and execute trading activities on the connected account at the discretion of the account owner.
Trading robots also serve as a source of generating consistent income from the retail FX market as they eliminate emotion-based trading, ensure discipline as they abide by a strategy written into their codes, and can run with little or no manual supervision (supervision is advised anyway).
Nevertheless, there can be mechanical failures, functionality errors or anomalies, and they can also perform poorly if not properly setup.
Copytrading Platforms (Social Trading):
No doubt one of the biggest innovations in the retail FX industry till date, copy trading, allows both experienced traders and newbies copy the strategies of more profitable traders while using their free time to either learn how to trade or just focus on their daily activities.
Social trading gives access to reliable trading information and allows anyone to earn without necessarily knowing how to trade.
Some copy trading platforms also ensure that the user is in full control of their capital along side the various risk management and capital protection protocols in place. It is a general belief that Africa has not fully utilized the potentials of copytrading.
On the other hand, on some platforms, it is hard to determine which traders are actually successful as there are thousands of them – some of whom are only focused on the commissions and not the health of the accounts of their followers. Some platforms also charge higher spreads on copy accounts in order to boost revenue.
Now, these innovative solutions mentioned above have really made life easy for millions of people all over the world till date. But as time goes on, we crave for more – something better. For instance, a combination of all three (a triad of some sort).
So, we ask…
“What if we create a system that combined all three innovations, utilizing their potentials while eliminating their downsides?”
A copytrading system managed by a combination of profitable experts and top-tier trading robots that would help generate automated and consistent income for millions of people all over the world, while ensuring minimal risk exposure, full transparency and total user control over capital.
That would definitely be something, wouldn’t it?
The Future We See
We believe that the world is ready for the next disruption in the retail FX trading industry; a new wave that will help millions achieve financial stability and we intend to pioneer this move with Africa as our starting point.
Click Here to discover how we are helping people automate their income with Rift Link. For inquiries, partnerships or if you are interested in participating in our pre-seed funding round, kindly reach out to us via email; firstname.lastname@example.org