How to Find the Best Forex Brokers in South Africa?
- Hot Topics
- Top Forex Brokers in SA
- Key Factors to Consider
- Choosing the Right Broker
- Trading Platforms
- Leverage and Margin
Having a great strategy, a robust volume of capital and all the discipline required would count for nothing if you select the wrong forex broker. As a South African, you’ve got to be smart and calculated in this quest given the number of brokers luring you to come trade on their platforms.
We’ve heard of brokers shutting down operations completely, some carting away traders’ funds, and quite a number also feeling the big hammer of government regulators who never fail to place sanctions on fraudulent brokers variously breaching several financial regulations. This means, in effect, that the biggest and most important trading decision you can ever make as a forex trader all comes down to how and why you choose a particular broker.
|Top 10 Forex Brokers in SA for 2020|
|24Option Forex Review||CySEC, IFSC||Yes||$250||$500||Soon||Trade Now!|
|IronFX Review||FSCA, CySEC, FCA, ASiC||Yes||$100||100%||Soon||Trade Now!|
|FXGiants Review||FCA||Yes||$100||$2,000||Soon||Trade Now!|
|Plus500 CFD Broker||FSCA, ASIC, FCA, CySEC*Your capital is at risk!||Yes||R1500||Up to R 70 000T&Cs apply!||Soon||Trade Now!|
|FXCM Review||FSCA, ASIC, FCA, AMF||Yes||$50||N/A||Soon||Trade Now!|
|FPMarkets Forex Review||ASiC||Yes||$100||100%||Soon||Trade Now!|
|AvaTrade Forex Review||FSCA, ASIC, FSC, FFA||Yes||$250||$10,000||Soon||Trade Now!|
|Blackstonefutures Forex Review||FSCA||Yes||R1000||R100,000||Soon||Trade Now!|
|Oinvest Review||FSCA||Yes||$250||N/A||Read Review||Trade Now!|
|CMTrading Forex Review||FSCA||Yes||$250||$2,000||Soon||Trade Now!|
*Plus500AU Pty Ltd (ACN 153301681), licensed by: ASIC in Australia, AFSL #417727, FMA in New Zealand, FSP #486026; Authorised Financial Services Provider in South Africa, FSP #47546.
But do not fret, we’ve put together all you need to find the best Forex broker in South Africa. This is the result of months of research, in-depth analyses, and careful considerations of the features and levels of security these brokers offer.
Since the FX market is very fluid and highly dynamic, our research team is always out there digging deeper to bring you the latest trends and changes in the SA Forex industry. So, stay tuned!
Key Factors to Consider Before Choosing a Forex Broker
The following guide has been carefully vetted by experts in the industry, folks with decades of experience weathering the storm and reaping lots of profit from the market. In other words, to start or accelerate your journey to financial freedom, these are the things to put at the back of your mind before choosing a forex broker.
Why Do I Want to Trade Currencies in the Forex Market?
Answering this question genuinely and objectively is the foundation on which your success or failure lies. Are you trading to offset some past debts, are you trading to find small profits to pay Eskom, water, and other such bills, or are you trading as a full-time job from which you get all your income?
Knowing why you desire to trade and what you expect out of the whole venture would determine the type of broker you need, the account type, your risk tolerance, and so much more.
What Kind of Trader Do I Want to Become?
Similar to the question above, you need to carefully think about the output you expect in the end. This would inform many – if not all – of your subsequent choices.
- Am I going to execute many trades in a day or week?
- Do I choose standard lots, mini lots or micro lots?
- Would I be a scalper or shoot for long term trades only?
These kinds of simple questions would open your mind to the possible risks you need to take and that, in turn, would determine your risk tolerance.
How Much Time Do I Have to Trade Weekly?
Perhaps you work in the municipality or with a private firm and desire to be financially free in a few years so you decide to start trading. Good idea; but not good enough!
It is crucial that you consider how much time you have before anything else. Although the market is open 24/5 every week, understanding when huge volumes of currencies exchange hands in the market is key to your success.
As someone living in South Africa, your day time falls between the start of the London session and mid-day US session. How much time can you spare to trade these lucrative sessions without your boss breathing over your neck?
Can you stay up all night to trade the Asian session and then resume work the next day not fatigued?
Think about it!
Forex trading demands your time, your dedication, and your attention. So, if you’ve got a full-time job, perhaps day trading and scalping may not be ideal for you. Try long-term trades instead.
How to Choose the Best Forex Broker in South Africa?
Now that you’ve found answers to some of the most critical questions, it’s time to carefully analyse what the hundreds of brokers offer, weed out the jokers, and narrow down your search to a brokerage firm that has the perfect combination of features that suits your personality and meet your expectations.
In the Forex world, rules are everything! As a trader, not following the rules of the game is a sure guarantee that you’ll lose all your money in no time. The same applies to a broker too. Any brokerage firm that flouts the regulations set by the financial watchdogs in Pretoria and Johannesburg is liable to a fine or outright closure.
Because lots of money is involved and the government is highly interested in protecting investors, the Financial Sector Conduct Authority or FSCA (previously known as the FSB) has been empowered by the national government to guide against financial impropriety and safeguard local citizens and the economy as far as non-banking-related activities are concerned. This regulation covers Forex trading too.
This bulldog of an agency will surely bite – they are a strong watchdog that ensures that all Forex brokerage firms play by the rules. They are also empowered to update the list of licensed brokers in the country – adding new ones and removing erring ones from the list.
Other than maintaining such a database, the FSCA is mandated to maintain financial stability, ensure Forex brokers present their terms, conditions, and other services in written form so no customer would be confused or misled. Also, the FSCA makes sure all traders on the broker’s platform is treated fairly and equally which then translates to an efficient and trustworthy Forex trading environment for everyone.
Now, this is a very important aspect that you need to consider before choosing a Forex broker in South Africa. While every broker does offer the MetaTrader 4 platform, some go over and beyond to provide even more robust avenues for traders to place their trades. This is quite crucial for older citizens who prefer simple things compared to sophisticated charts and lines.
Some web-based or software-based platforms can also be very fantastic for traders because their charts are quite easy to understand. You might want to check out if the broker also offers the new MetaTrader 5 platform and all its wonderful add-ons too.
Also, consider how you spend your day. Do not go for a trading platform that is not offered in a mobile version – either on iOS or Android devices. In fact, some brokers have developed diverse trading apps used to analyse, follow the news, do calculations, and many other cool stuff relevant to your trading success. These are good brokers to consider trading with.
So, travelling on the Gautrain between Pretoria and Sandton might just be a good time to place some trades or check out your positions – no need for a laptop or desktop, all the information, tools, and analysis you need are right inside your smartphone, while you are on the move.
Furthermore, an ideal trading platform would be such that allows you to execute both live positions and demo trades on the same platforms. This is a crucial requirement given that the charts, lines, and other features on the platform must work for a demo or live trading the very same way.
In other words, a good broker must be such that allows you some flexibility and several good options to trade on while using your laptop or mobile device.
Deposit and Withdrawal Methods
Because the world has become more integrated and financial services are getting more streamlined every year, never settle for a broker who accepts only one or two methods for depositing or withdrawing funds. The best brokers in SA must offer several options and a very competitive transfer fee regime.
Options must include bank transfers (bank-to-bank), card transfers (Mastercard, Visa, etc.), and web-based and mobile digital wallets (like Skrill, Neteller, Payoneer, etc.)
Another factor to consider is how fast you get your deposits in your trading account and how fast you get it back into your wallet in return. Most web-based transfer and card methods should be instant or a few hours long, at most. Ideally, wire transfers take up to 24 hours or up to three days – depending on the bank and location you are sending the money from.
The point is, you need to consider your needs and how patient you can be to send or receive your funds to and from the broker.
Run away from any broker that takes many days to process your withdrawal; certainly, there is something dishonest about them and they may not be trusted in the long-run.
You may also want to consider settling for a broker that keeps your deposited funds in the local currency – the Rands – instead of transferring same to their branches or headquarters abroad, exposing you to financial uncertainties in Europe or America.
Surely, everyone feels safe knowing their funds are secured in a local bank which they know its location and operators, not some clandestine banks abroad one knows nothing about.
Becoming successful in the Forex market is hinged on how dexterous and savvy one becomes with different kinds of instruments. Other than the EURUSD, USDJPY, CHFUSD, GBPUSD, AUDUSD, USDCAD, and the other major instruments, there are many other very lucrative pairs in the FX market. You should find out from the broker which major, minor, cross pairs, and other instruments they have to offer. The more they are, the more flexible your trades can be.
It also speaks to how robust and well established the firm is. This factor may be overlooked by many, but it easily tells you how highly recognized the broker is. Further to that, there are other indices and commodities you should inquire about. Do not forget to ask if they trade ETFs, Bonds, and Shares too.
A good and reputable firm should have all these markets and instrument options available to its clients cutting across multiple platforms as described above.
Spread and Order Execution Speed
This is where brokers make their profits. Simple!
Little wonder many deceitful brokers play tricks with the spreads they offer clients. Never forget, a broker has nothing to lose whether you win or lose trades – they make their money from the spread between the “ask” and “bid” prices when you initiate a buy or sell trade.
However, we have noticed that some brokers increase the spread for certain instruments or at certain times during a trading session. We have also noticed strange spread offers during high volatility trades and at points when fundamental news triggers massive buying or selling of a currency pair.
In effect, it is your duty to find out from the broker and make them present, in black and white, what they charge as spread for different currency pairs.
As a trader in South Africa, you are entitled to this and backed up by the FSCA too.
It is important to stress this point further especially for day traders and scalpers. If you place small trades multiple times daily and the spread is too wide, you might just be working for the broker, making little or no profits for yourself while they, on the other hand, suck you dry as you place your dozens of trades by the hour.
This is where order execution speed also comes into play. An ideal broker you can rely on must have a system built on servers that are robust, fast, and secured. Such a system must be able to execute your orders in an instant. A broker whose system delays – even for as little as 10 seconds after you initiate your order – is suspect.
Many traders have experienced such delays with some brokers only to see that the spread has widened in that short space of time. Anything short of instant execution when it reaches your limit or stop orders (or when you click to execute) is not acceptable.
Move on to the next broker.
Leverage and Margin Requirements
Tied to spread is the question of leverage. How much leverage the broker offers goes a long way to determine how fast you can make consistent profits (if you know what you are doing and have a sound strategy based on strict discipline). More importantly, though, the more leverage options you are offered, the better. This gives a trader more room to manoeuvre and trade conveniently.
While some may be comfortable with 1:50 or 1:100, other aggressive traders would desire 1:500 or 1:1000. It all depends on risk tolerance and what one desires as his/her end results. The point is, there must be many options so traders can decide which suits their needs at specific moments of their trading journeys. Such options should also easily accommodate both the newbie and expert trader at the same time.
This factor also determines what kind of margins a trader would get. So, ensure to find out how much percentage of your funds would be secured or exposed while using these leverages because they differ from broker to broker. The important thing is to make sure you are comfortable with the margin requirements they offer.
Fees and Commission
If the broker does not charge you for rollovers, carry trades (instruments held overnight), swaps, interest fees, dividends adjustments on stock CFDs as well as Index CFDs in the base currency with which you registered the account, RUN!
Some devious brokers have been noticed deducting all these fees in another currency different from the trader’s base currency – that is a fraud! If your base currency is the USD, for instance, and they charge you in GBP, you are losing money through currency conversion since the latter is higher in value than the former.
So, watch out for these charges and make sure to have it in writing, explicitly saying that the fees and commissions the brokerage firm would deduct from you (for approved reasons) would be deducted using the base currency only.
A good brokerage firm must have, in place, a system that protects traders during high volatility. Price slippage on market stop orders has been known to negatively affect – or even cause serious damages to some folk’s accounts in South Africa.
Similar to the above, the broker’s system should help you avoid, or at least limit, losses on pending orders that fall into price gaps. It should allow you to cancel pending orders without being charged for spreads and let you activate stop or limit orders partially if that is how you like it.
Having a broker with a great system that protects your account during high volatility and illiquid markets is the panacea for rest of mind. You do not want to be panicking when those ticks move in hundreds of pips up and down in minutes, racing towards your pending orders with the intention to get them triggered.
This feature also helps to avoid unnecessary slippage way past your stop loss that could lead to sever drawdowns – especially in a terribly volatile market (e.g. after the release of a market-shaking fundamental piece of news).
No doubt about it, one of the most fundamental requirements for getting to the top of the trading world is constant education. It is true that there is no perfect strategy that would make you money 100% of the time, hence the need to continue updating and refreshing your knowledge every time. Some brokers are exceptional when it comes to this.
Consider this before choosing a forex broker in South Africa:
- Do they offer live seminars and webinars for training traders?
- Do they offer risk management coaching on a one-on-one basis?
- Does their site have blogs, articles, and whole glossary of Forex terminologies which you can resort to when you get confused?
- Does their site have an FAQ section that answers questions from traders like yourself?
A Forex site is said to be excellent if it has in-house analysts well versed in technical and fundamental analyses. It is such a team that guides newbie traders and also supports experienced traders, sharing trading ideas and knowledge, as well as analysing news and chart patterns on a weekly basis.
Such troughs of financial education offer an avenue, it brings together a community of FX traders sharing ideas, learning from each other, and analysing the market together in a mutually beneficial manner. This factor is crucial to succeeding trading Forex – especially got newcomers.
Support from a forex broker is a big deal, a very big deal! Having someone to contact through chat or call while you are entangled in some conundrum is highly important. This is even more vital when you are stuck in a trade and confused about how to solve some problems while trading live.
A good Forex broker must have knowledgeable support staff that are friendly, courteous, and can help clients resolve all kinds of issues – including money transfers, platform use, app installation, and general FX needs.
Since Forex is a 24/5 business, this support must be available round the clock, available to take calls and resolve issues even in the dead of the night.
While many would jump at bonuses offered at the point of registration, it is highly recommended that you read every single line in the Terms and Conditions page before you accept the broker’s bonus. Sometimes, there are more technicalities hidden in the fine prints and legal jargon than meets the eyes at first glance.
Read and understand, and as well make sure you are comfortable with the offer and its conditions before clicking “Accept”. If you are investing $5,000, for instance, and the broker offers you a $500 bonus, you may think it’s a good deal. But, after researching most Forex brokers in SA, we have come to see that these bonuses – and the profits you make from them may not be available for withdrawal.
So, check with them and get a written response confirming whether you can withdraw the bonus and the profits that accrue from trading those bonuses. Not embarking on such due diligence might land you in trouble and eventually create room for arguments and mistrust. In contrast, finding out beforehand would ensure you are not just working for the broker who ends up keeping all the profits from the bonuses.
Added Products and Partnerships
With a thousand and one brokers out there and only a predictable number of traders willing to stake their money in the markets, brokerage firms are doing all they can to attract more clients. This has forced many to dig deep and find more attractive features and reasons that would appeal to a wide range of traders – newbies and experienced traders alike.
Some of these are Marketing Affiliate Programs and Referral Programs.
Clients are offered bonuses and referral bonuses when they bring in other clients to sign up through their affiliate links. While some offer fixed amounts per thousand dollars, others offer percentages on funds deposited by new clients.
Another method of attracting new clients is by offering Copy-Trading features where newbie traders copy the trade ideas of much-established traders, paying only a little fee for that service. This works well for those who want to learn the ropes while live-trading instead of just demo-trading alone.
Some brokers even go as far as trading on behalf of a client. This is called investment trading and it is quite popular too. Other promotions may include contests and coupons also.
To top it all, some offer free trading signals, free indicators, free market outlooks and analyses, etc. All these are quite useful and might just be the reason you end up with such a broker.
|Info about the Best South African Forex Brokers|
|Rodeler Limited||2009||Cyprus||+44 161 960 email@example.com||24option.com|
|Notesco UK Limited||2010||Cyprus||+44(0)2032827777||Support@ironfx.com||ironfx.co.uk|
|Notesco UK Limited||2015||UK||+44(0) 207 523 firstname.lastname@example.org||fxgiants.co.uk|
|Plus500 Ltd||2008||Israel||Live Chatemail@example.com||plus500.com|
|FXCM LTD||1999||South Africa||+27 10 590 firstname.lastname@example.org||fxcm.com/za/|
|First Prudential Markets Pty Ltd||2005||Australia||+61 2 8252 email@example.com||fpmarkets.com|
|AVA Trade EU Ltd||2006||Irelandfirstname.lastname@example.org||avatrade.com|
|BlackStone Futures (Pty) Ltd||2009||South Africa||0860 77 77 email@example.com||blackstonefutures.co.za|
|Basfour 3773 (PTY) LTD||2018||South Africa||+27 21 518 firstname.lastname@example.org||oinvest.co.za|
|Global Capital Markets Trading Ltd||2012||Seychelles||+44 203 318 email@example.com||cmtrading.com|
In conclusion, you have to weave all these factors into one solid web before reaching a decision. It is at this point that you can decide if an ECN account with small spreads and small gains is ideal for you or you want to try out standard accounts with its attendant risks and huge profits.
In the end, choosing a good broker in South Africa is not cumbersome. Just make sure to consider all the points highlighted above, decide what you want to get out of the market, and how much risk you can tolerate before opening that account.
It’s your money; protect it with all you’ve got!