The economic boom that Rwanda has been experiencing since the early 2000s has helped many Rwandans live in better circumstances.
The GDP of Rwanda has consistently increased by 5% annually during the past ten years. Although the Rwandan Franc (RWF) has advanced significantly over this time, forex traders frequently underestimate it.
Rwanda allows a free-wheeling foreign exchange market where commercial banks are allowed to buy foreign currency at set floating rates.
To trade RWF, a broker needs to be authorized by the National Bank of Rwanda and registered with RFBAIS, the Rwanda Forex Bureau Association Information System. Given Rwanda’s pro-business stance on forex, you can easily find well-regulated international online forex brokers in Rwanda.
Starting out
Over the last five years, the amount of forex traded in Rwanda has increased as Rwandans became more interested in forex trading. The country has a cooperative economy and regulatory framework for online FX trading. Rwanda’s open forex trading rules may present an opportunity for prospective retail traders.
Before handing a forex broker a margin deposit, conduct your own research. Online technology advancements, increased internet coverage in Rwanda, and increased competition among brokerages have made forex trading more available.
Consider the following when starting out:
- First you need a strong, reliable internet connection. Finding a reliable connection in Rwanda shouldn’t be difficult because the country rated first among African nations for both internet connectivity and download speed.
- Next you need to select a regulated broker. Verify any broker’s compliance and ensure they have the necessary license from a reliable regulatory body.
- Visit the broker’s website and choose an account type that is right for you.
- After creating an account, you need to make a deposit. Select the currency for your account and fund it through one of the accepted payment methods.
- Now you can start trading once your broker has received and verified your funds. You also need to choose your trading platform which will give you access to the forex market through several devices including your computer and your smartphone.
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Quick guide to forex trading in Rwanda
Global currencies are bought and sold in forex trading, which takes place on one of the world’s most liquid markets. If the correct account is set up, individual traders can engage in forex trading on par with major hedge funds and banks.
Pairs of currencies are traded on the forex market. Since two currencies are being exchanged, the transaction frequently displays how one currency is valued in relation to the other. For instance, the USD/RWF exchange rate shows how many Rwandan Francs are required to purchase one US dollar.
The Volatility 75 Index (VIX) measures the S&P500’s volatility. The Volatility Index (VIX) is widely considered the foremost indicator of volatility and investor sentiment. It is a measure of the market’s expectation of near term volatility of the prices of US 500 stock index options. There are VIX 75 forex brokers in Rwanda.
Some of the terminology you need to understand is the following:
Leverage
Leverage is a term that is often used in forex trading and is the use of borrowed funds to invest in a currency.
Pip
The smallest change in an exchange rate, often known as a pip or percentage in point, is normally equivalent to $0.0001, albeit it would be $0.01 for USD/RWF.
Spreads
The spread is the price difference between the purchasing and selling prices. This spread is determined by your forex broker. Each broker specifies their unique currency pair spread, which differs from broker to broker.
Bid/ask
The bid price is the most you are prepared to spend on a currency pair. The ask price represents the lowest price you are prepared to accept for the same currency pair.
Forex lot sizes
A measurement in a currency transaction is called a lot. Orders are placed in sizes quoted in lots when they are placed on your trading platform. In forex, there are three lot sizes:
- Lot Size: 100,000 Units
- 10,000 mini-lot units
- 1,000 units in a micro lot
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