Forex trading in Tanzania is not currently regulated and there are no locally licensed brokers, which means that retail investors who want to trade in forex do so at their own risk without any dispute resolution in case of malpractice by a broker.
Due to the lack of regulation, Forex trading is quite unsafe in Tanzania because of this risk and more uncertainties surrounding it. Unregulated brokers do not have any regulatory authority governing their services, which expose users to many possible scams against which they will not have any protection from a local authority.
The minimum amount with which one can start trading in Tanzania
According to AskTraders, the majority of forex brokers have a minimum deposit requirement for opening a live trading account with them, and the size of these deposit amounts vary depending on the broker, its offering, account type and the targeted trading market.
Some forex brokers don’t specify a minimum deposit requirement but may not allow you to start trading without first depositingan amount into your live trading account.
Minimum deposit requirementsgenerally starts at $100 (230500,00 Tanzanian Shilling) or equivalent, while with brokers that don’t prescribe a minimum amount, a person can technically begin trading with as little as $1, or 2305,00Tanzanian Shilling.
Trading with a low initial investment does present several obstacles, such as the available maximum leverage at your disposal or the minimum position sizes that you can open.
The following example gives an idea of what a trader would need: If the USD/TZS currency pair is trading at 2,310, it will cost 2,315 shillings to buy a U.S. dollar.
A good risk management strategy
Before you begin trading forex, you should first open a demo account and trade with virtual currency to become familiar with the forex broker’s platform without suffering unnecessary losses.
Only open a real account when you’re comfortable with your trading strategy and begin with a small amount, not more than $500 (1152500,00 TZS), and trade with the smallest available lot size.
A good strategy is to never risk more than 1% or 2% of your trading portfolio.
Pros and Cons of forex trading in Tanzania
Low investment with brokers that have low minimum deposits and high leverage
The forex market, like other financial markets, can be very volatile.
Forex trading is accessible due to mobile connectivity
Lack of regulation in the country exposes traders to scams and fraudulent brokers
The forex market needs little capital to get started and has low transaction costs
For the time being it is advised for investors in Tanzania to either not engage in Forex trading in Tanzania as it is not regulated in the country, or alternatively do it via foreign regulated brokers from South Africa, UK, Australia etc.
Is forex trading legal in Tanzania?
Although there is no regulation of forex trading, clients can trade online via foreign regulated brokers.
How much money do I need for forex trading in Tanzania?
The amount will depend on the broker you use, which can be as little as $1, or 2305,00 TZS.
How much money can you make with forex trading?
A dedicated Forex trader who has a decent strategy in place may average an income between 5% and 15% a month thanks to leverage.
Can you lose money with forex trading?
Yes, Forex and CFD trading involves a significant risk to your invested capital.