Binary options traders in Africa face some very peculiar circumstances.
One of the peculiarities that jump right out is the almost complete lack of homegrown binary options brokerage services. This puts African traders at some disadvantage when compared with their American, European and Oceania counterparts, who can all boast of having binary options brokerages within their regions of operation.
As an African binary options trader who will perform trading operations from the African region, you will have to open a trading account with brokers found in other regions. This puts African traders at the mercy of the terms of service of these brokers. For instance, most African traders will find it almost impossible to open accounts with brokers located in the US as a result of restrictions placed by the Office of Foreign Assets and Control (OFAC). Trading with a UK-based binary options broker means fulfilling documentation requirements that are much more stringent than what traders from other regions are required to provide.
In addition, there is a restriction in the number of payment options that are available. Except you are from South Africa, it may be almost impossible to use credit cards, PayPal or other payment methods such as the e-wallets. This puts the trader in a position where bank wires must be used for all transactions, with the attendant delays that follow it.
How to trade Binary Options as an African
If you want to trade binary options as an African, there are ways of doing so successfully without getting bugged down by all the restrictions you may face. Here is a synopsis of how to do it.
1. Broker selection
It can be a nightmare selecting a broker willing to accept your business. The best bet is to select a UK-based broker or to select a European-based broker with the required regulation. Selecting a broker from Seychelles may not be a good idea because there have been issues with brokers in that jurisdiction that stem mainly from a lack of appropriate regulation.
UK brokers will require an international passport and documents to prove your residence which has been correctly signed by a public notary who will append his/her full name, position, official address, and official seal/stamp. In some African countries, the logistics for this process could cost as much as $500. This is unfortunate but an unavoidable price to pay to get a good broker in a jurisdiction like the UK which has a sound regulatory framework in place to protect you the trader.
2. Payment Methods
In order to get the benefit of faster transactions, try to select a broker that will allow you to transact with an e-wallet option such as Moneybookers or CashU. If you live in North Africa, CashU is your best bet. If you live in West Africa, you can try using Moneybookers or Liberty Reserve. There are other e-payment options that are available and which one is available for the trader is a function of what is provided as well as the geographical availability of such a payment method.
A domiciliary account with your local bank for bank wire transfers is a necessity. This account not only serves to send out and receive your trading funds, but it will also serve to provide a bank statement that can be used as proof of address, as most banks are now required to do a KYC assessment prior to opening an account for you.
3. Trading Hardware
Internet facilities in many African countries do not work optimally. Internet downtimes, slow internet speeds in public cafes, and cybercrime are real problems. Power outages are another issue. As a binary options trader, you need to have internet which is fast, responsive, and secure. You do not want to make all those profits and then have some hacker steal it all by hacking into your account and making away with all your identity information and money. As a result, African binary options traders must invest in the following:
– A generator to generate electricity for charging smartphones, laptops, and tablet devices and also to power them when there are power outages.
– Samsung’s solar powered-laptop is a device you will never regret owning.
– A smartphone for mobile trading.
– A broadband internet modem. Thanks to the rapid expansion and deployment of internet service hardware, costs are coming down and becoming more available.
These are the hardware an African binary options trader will need for smooth trading operations.
4. Trading Software
The following software will be handy:
– A full anti-virus package with internet security to guard against harmful intrusions and hacker attacks. This also ensures your computer runs smoothly.
– Trading platforms for tablet, mobile and regular computing devices.
– An MT4 platform from brokers like FXCM contains the full suite of assets traded in the binary options market. This will also serve to provide the charting facilities needed for technical analysis.
– Software for analysis such as indicators, EAs, etc. These can be commercially obtained or custom-built.