There are so many Forex brokers out there today in South Africa with many of them claiming to be reliable. You do not need to fret as the reviews we have provided here will help you to make the right choice among the various Forex brokers as a South African Forex trader. We take into consideration several factors in this review, including fees, analysis options, charting, trading platforms, spread and so on.
Be that as it may, your personal preferences will determine if that broker is the best for you or not. For example, you want to know if the broker offers a particular set of Forex pairs that you are interested in. You may also want to find out if the broker offers the platform you are interested in, among several other factors.
Best Forex Brokers in South Africa for 2020
Check below or a list that compares various FX brokers for South African Forex traders: each of the brokers discussed below deserve consideration. You can visit their websites for more elaborate details about them.
- Avatrade: The broker offers over 50 currency pairs and the spread is narrow. The broker is also regulated in 5 continents.
- IC Markets: The pip spread can be as narrow as 0.0 pip spreads. It also boasts of one of the best True ECN Forex brokers in the world. The broker is also regulated by ASIC.
- com: The broker offers more than 80 currency pairs and one of the tightest spreads in the Forex trading industry.
- XM: It offers tight spread and the lot size is flexible. All levels of traders are accommodated in the Zero and Micro accounts.
- Trading 212: The trading experience offered here is truly mobile and the spread is tight. The platform equally offers a wide range of markets and the trading environment is well detailed and highly dynamic.
- AxiTrader: The spread is competitive and the platform offers both CFD and Forex market instruments. It is also regulated by both ASIC and FCA.
- Pepperstone: The spread is as low as 0.0 pips ad the trader can access over 61 pairs.
- com: The broker offers up to 67 major, minor and also exotic FX pairs.
- IQ Option: It offers a small number of currencies. However, the spread is high.
- Oanda: It is a global brand and offers exceptional execution, advanced charting, low deposit requirements, various trading platform features.
How to find the best Forex broker
The following are some of the major criteria that can help you to find the right Forex broker for you in South Africa in 2020:
- Trading conditions/fees: This is about the most important of all the factors to consider when searching for Forex brokers in South Africa. While checking the fees, you should also consider if the broker charges inactivity feeds, withdrawal fees and any other “hidden fees”.
- Market coverage: Check if the broker offers a particular set of currency pairs that you want to trade.
- Accessibility and affordability: Find out how affordable the minimum deposit is. Some brokers offer minimum deposit from $10 to $1000.
- Trading platforms: Check also for the various tools and platform featured by the broker. Check if the trading platform is configurable. Since you may have your own ideas of personal preferences.
- Mobile trading apps: Check if the broker offers mobile trading app that will enable you to trade on the go. Find out also if the mobile platform functions just like the web-based version.
- Deposits and withdrawals: Check if the process of depositing and withdrawing on the platform is very easy and straightforward. Consider also the number of deposit and withdrawal methods supported by the broker.
- Reputation: One other factor worthy of consideration is the reputation of the Forex brokers in South Africa.
- Regulations: You should never overlook the issue of the regulation when choosing a broker. You will not have much problem with a broker that is regulated, unlike an unregulated one.
- Customer support: A reliable customer support gives the assurance that you will have someone to talk to when you encounter any challenge while using the particular broker in question, like withdrawal, trading or deposit challenges. You should find out how competent the customer support is before you register on the platform.
- History and background of the Forex broker: You should find out about the past history and exploits of the broker before you register there. Check if the balance sheet of the broker is made public and look for any sign of unreliability before you register with the broker.
- Education: Check if the broker offers various educational tools that can help the trader to make very important trading decisions and learn more about Forex trading.
- Account opening registration process: One other important factor worthy of consideration is the simplicity of the registration process. Check if there is a need for verification and also find out how easy the verification process is. Do not forget to find out what the old clients have to say about the registration process.
Forex brokers do not offer free services. You will have to pay for the services offered via various methods, like rollover fees, commissions and spreads. You are better off with a Forex broker that charges low fees.
The fees charged by fx brokers differ one from another and also different across account types on each broker. The two major categories of fees are:
- Brokers that charge spread only with all the other fees included in the spread, except rollover rate
- Brokers that charge both spread and commission. The amount traded by the trader determines the commission charged.
The more transparent of the two categories of brokers is the second one. This is because the first one can cost the trader a lot of money in many instances.
The spread charged by the brokers can either be verifiable or fixed. The fixed type of spread is always constant. You may encounter zero spread on ECN brokers. You will see changes in variable spreads and the change depends on available liquidity, volatility and trading asset. A spread and currency market is closely related.
Some Forex Brokers charge fixed spreads. Some charges only 1 pip as the fixed spread. The brokers charging fixed spread tend to be more popular. However, such brokers can charge swap, rollover and commission fees.
What is Rollover Rate?
It refers to a fee you have to pay when you leave a Forex position opened overnight. The rollover rate is the difference between the interest rates of the two currencies that make up the concerned currency pair. The first currency in the pair is called the base currency and the second one is called the quote currency.
Forex pairs traded
Many of the Forex brokers out there offer highly impressive currency pair selections. However, some of them do not offer exotics and minors. So, you should find out if the broker you are interested in offers the particular currency pair you want to trade before you register on that broker.
Examples of major currency pairs are:
However, some brokers can add any currency pair of your choice on request to cater to the specific needs of the trader. You can use this as a yardstick to determine the reliability of the broker you want to choose as it can determine the overall quality of the broker.
Many brokers now offer cryptocurrencies these days. You can trade either crypto/crypto or crypto/fiat pairs also. You can conveniently scalp these pairs because of their high level of volatility. Some Forex traders only focus on scalping.
If you are into Forex trading because you want to trade cryptocurrencies, then you should look got a broker that offers as many crypto pairs as possible.
Individuals that trade Forex on small scale are better off with micro-accounts. Studies show that majority of Forex traders are small-scale traders such traders will of course prefer brokers that offer micro accounts and many micro accounts have their base currency as the USD.
Some brokers offering micro accounts do not have any amount as a minimum deposit and the trader is free to deposit virtually any amount. Those who do not want to risk too much money in Forex trading will find such brokers to be better choices when looking for preferable Forex brokers South Africa.
Micro accounts, however, charge the high spreads and commissions. At the same time, it helps a beginner to get a feel of the Forex market.
You can easily customize Forex trading platforms to suit your presence. You can find a series of features on trading platforms, like drawing options, advanced charting options, automation, technical analysis tools and even live news feeds on the trading platforms. Some other trading platforms may also include event calendars and sentiment indicators.
MetaTrader 4 or 5
Check if the broker supports either or both MetaTrader 4 and 5 before you pitch your tent with the broker.
It is also important to find out if the broker allows its traders to prosecute trades on social trading network. Also, check if the broker provides proprietary solutions to trading. At the same time, find out if the proprietary trading platform allows the trader to use VPS and EAs.
Furthermore, bear in mind that some brokers do not allow their registered traders to use trading strategies, like EAs, scalping and hedging. You should learn about these restrictions before you register with the broker. Those who want to scalp should only look for a Forex broker that supports scalping.
Additionally, check if the broker provides mobile trading app with which you can trade on the go. Virtually all brokers provide trading apps, the simplicity and friendly nature of the apps differ from one broker to another.
Fx brokers offer various tools and features, like bespoke trading robots, futures pricing tools and charting tools. These tools can help to improve the experience of the trader. If you prefer any of the tools, you should find out if the broker offers that particular tool you are interested in before you open an account there. One of such tools is Level 2 data.
Deposit and withdrawals
You should never forget to consider how much the broker charges for deposit and withdrawals. The factors that usually determine how much a broker charges are based on its internal procedures and the charges differ from one broker to another. The time it takes the broker to process your deposit and withdrawal should also be considered when deciding which one to choose among them.
The length of time it takes the broker to process your deposit and withdrawal can depend on the particular payment method you choose. You should look for a broker that supports as many payment methods as possible.
Some brokers can help to guide their registered members as regards how to trade Forex. If you are looking up to your Forex Brokers to provide such a service, then you should only opt for a broker that offers extensive educational tools. It is, however, not advisable to put your trust in your broker for Forex trading education. You should rather opt for an impartial source of education.
Some of the most common payment methods on Forex brokers are bank wire, MasterCard and VISA. Some other brokers offer Neteller and Skrill as payment methods also. It is rare to find brokers on the Forex market that accept PayPal or bitcoin as payment methods. Many of the brokers that support South African traders will allow you to make payment with the Rand.
One other important factor to consider when choosing a Forex broker is the feedback provided by its past and present clients. You can get a series of feedbacks from forums and community review sites online. Be that as it may, you must think twice before taking those reviews seriously. For all you know some of the poor reviews might have been posted by a disgruntled trader and such reviews cannot be trusted to not be unbiased.
You should bear in mind that some of the reviews may not be correct. You may even encounter some of the incorrect reviews on platforms like TrustPilot, like scam messages and fake posts. Verification of the posts on the website is very difficult.
Despite the grey area hinted above, reading a review about the Forex broker before registering on the platform is still very helpful. If you see brokers that have no reviews, then it is possible that those Forex brokers South Africa are not reliable.
You should steer clear of brokers that have no community feedback also since people will always have something to say about their trading accounts or brokers.
You should not register with a broker that is not regulated. The regulatory agency may not necessarily be in South Africa; it can also be located in a foreign country.
Some of the popular Forex trading regulators are:
- CySec (Cyprus Securities and Exchange Commission)
- Swiss Financial Market Supervisory Authority (Switzerland)
- BaFin (Bundesanstalt fur Finanzdienstleistungsaufsicht)
- FCA (Financial Conduct Authority)
All the regulatory agencies mentioned above are strictly supervised by the European Securities and Markets (ESMA).
Some of the regulatory bodies outside Europe are:
- SEC for the United States (Securities and Exchange Commission)
- ASIC (Australian Securities and Investments Commission)
- CSA (Canadian Securities Administration)
- CFTC for the united states (Commodity Futures Trading Commission)
Many of the brokers that cover South Africa will be regulated with one or more of these regulatory agencies. Some of the regulatory bodies have a register of legal firms and some other ones issue licenses to the brokers.
However, you should think twice before you register with a broker regulated by off-shore regulatory agencies since such bodies are rarely trustworthy. Such offshore regulatory bodies offer little or no protection to the Forex traders.
ESMA does not like the idea of Fx brokers giving bonuses, but brokers that are not regulated by ESMA are free to give bonuses and promotions. Brokers regulated by ESMA also give warnings to their clients about how risky it is to trade CFD.
Most of the brokers obey the demands of the regulatory bodies on the security of the clients’ accounts. The regulatory bodies demand that the brokers separate the account of the company from that of the customers. Doing this will increase data security for the members. The level of confidence obtainable differs from one broker to another and the sense of security can greatly depend on where the broker is licensed or the regulatory body to which the broker has affiliation. Bear in mind that being regulated is not the same thing as being licensed.
Before you start trading with any broker, you should first try the services provided by that broker on a demo account. If the broker is credible, it will allow you access to a demo account before you are asked to make any payment. You can use the demo account to try out the services provided by the broker risk-free. You can also use the demo account to test your trading strategy before you start using it for live trading. The demo account can be used of back testing and also for getting a better understanding of the nuances of that platform. You can even try the demo platform of different brokers before you choose any of them. There is no crime in having multiple Forex trading account; in fact, some experts even recommend that you have multiple Forex trading accounts.
Leverage can have a very big impact on your trading experience in South Africa. The capping for leverage is 1:30 in European countries and the capping for various assets like stocks, oil or gold differs from one asset to another.
Traders in South Africa can use leverage as high as 1:500. This will create a bigger difference in the margin and deposit requirements, however. Many Forex brokers South Africa also open their shops to Forex traders from different countries across the globe. As a result, traders from across the globe will not have a problem choosing a broker for their trading expiries. While high leverage can boost your profit, also take note that it can increase your loss.
You should take some time to read up about the history of that broker before you sign up on the platform. For example, you can find out what the regulatory bodies have said about the broker and that can help you to determine how reliable or otherwise the brand is. Studies show that regulatory bodies never hesitate to issue cease and desist orders to any broker they find to be dishonest. Such an order can get the broker blacklisted.
If the broker is in such a situation, you can easily find the information online and this will give you an idea of how much trust you can reside in that particular broker. Reputable Forex brokers South Africa will not have such orders against them at all.
Reading the company history will help to expose its dirty pasts and help you to make the right choice when looking at a broker in South Africa for Forex trading. However, you may have to search the archives of the regulatory body before you can find such information.
Bonuses given by brokers can come in different forms. It can be in the form of deposit match, free trades or no deposit bonus. Giving bonus is a way of advertising the services offered by the broker. However, the rules of regular bodies hinder many brokers from offering such bonuses. As a result, only very few brokers do offer bonuses. However, you should rarely use bonuses to determine which broker is best for you. Before you accept any bonus offered by a broker, you should take time to read the terms and conditions to ensure that they will not make you to over-trade.
Additionally, account details
Aside from the points mentioned above, there are several other points that you should also consider when choosing a broker. Some of the points are discussed below:
Order execution type
A broker can execute your trades using various methods. You can easily see the particular method used for trade execution by that broker in the particular price you pay for it. Some brokers only support specific methods of order execution. The broker can also play the role of a market maker instead of using an ECN to execute your trade.
ECN are reliable for limit orders since they are able to match buy and sell orders at the same time within the network.
Check below for more options used by various brokers.
- Order to the Floor: This is used by for stock trading and it is handled manually via regional exchanges or actual trading floors. The process is, therefore, very slow
- Order to Third Market Maker: This type of execution has to do with a third party that acts as a market maker. This is the party responsible for handling the market order.
- Order to Market Maker: This method has similarities with the method described above and it is one of the most essential to consider when searching for the best Forex brokers South Africa. In this method, trade execution is also handled by the market makers. Some other market makers even pay money to brokers for the latter to send orders. This means that it is possible for your order to not end up with the best market maker.
- Internalization: In this method, the broker matches your order from its asset inventories. As a result, this method of execution is always very fast.
While considering the issue of regulation, you must also consider the order execution of the broker before you make your final choice among them.
Each broker is expected to send a report of the quality of service execution to the regulators; this is especially required by both the SEC in the USA and the ESMA. One of the duties of the regulators is to ensure that each Forex trader receives the best possible order execution.
The guideline set on this by MiFID II is very clear. In this instance, each of the brokers is expected to provide accurate data regarding the execution methods used per order, together with the execution prices on each of the trades that occur on the platform.
The process looks tedious, but this is about the only way to prevent fraud. The prices will then be compared to the public quotes. The broker will need to explain its activities if it is detected to execute trades at a price different from the public quote. The broker will also have to explain itself to the trader if the orders from the trader are routed via a sub-optimal path.
The descriptions given above will give you a hint of how important the regulatory bodies are to Forex trading.
There are different types of accounts. Good examples are VIP level account, Gold account, Silver account, Bronze account, PAMM account, margin account, cash account and so on. Each of them has its specific differences, which has to do with the different leverage, settlement, access to Level II data, reduced spreads or cost. For example, a micro account can come with limits in trade size.
Professional and retail accounts will receive different treatments from the regulators and brokers. If you have an ECN account, for example, you will have unhindered access to the Forex contracts markets. You should find out if what you are getting from your broker is online with the type of account that you open with the broker.
The review provided above will undoubtedly help you to fish out scam brokers among the various brokers for South African Forex traders. However, you can check more of the features to help you identify scam brokers below:
- Be wary of cold calling: You will never be cold-called by a reputable broker, neither will you receive unsolicited emails or be added to Instagram channels or Facebook pages without your consent.
- How realistic is the profit: If it seems too good to be true, then it is probably not true. If they are able to make as much profit as they are claiming, then they wouldn’t cold-call. If the profit margin is as wide as claimed, then they will not advertise on social media.
- Does the broker offer to help you to trade: Does the broker also uses its own automated trades or managed trade? You should not allow anyone to control your money for you.
If you doubt the Forex broker for any reason, you should simply walk away and look for a legal, legitimate broker.
All the factors considered in the reviews above. The factors disused above will help you to make the right choice of a broker. You can use the demo account to test drive the reliability of the broker.
Difference between a market maker and a broker
A broker acts as an intermediary. The main goal of the broker is to connect both buyers and sellers. The broker has the duty of matching orders automatically and without the intervention of humans. The broker will charge a fee for this service.
The function of the market maker is to create market liquidity. The market maker always buys and sells and plays the role of the counterparty to the traders. Your Forex broker will trade against you if it acts as a market maker due to conflict of interest.
We have tested 5 of the major leading Forex brokers and the results of our researches are given in the remaining part of this write.
This Forex broker started operation in 1992 and has proved itself to be among the most reliable for Forex brokers around. Studies show that up to 72% of traders on this platform lose their investment due to wrong trading decisions. The broker offers more than 40,000 instruments to trade. However, the minimum deposit id $10,000, while UK traders will need a minimum of GBP 500.
- It is a bank and this means there is more security for your investment on this platform.
- It has 6 Tier-1 licenses and 1 Tier-2 license.
- It is also authorized to function in the European Union.
- The clients can have access to copy trading or social trading on this platform.
- It supports up to 182 currency pairs.
- The total number of CFDs offered is 35,000.
- VIP or active traders can access discounts on the platform.
- It does not support Skrill or PayPal for deposit or withdrawal.
- It also does not support cTrader or MetaTrader 5 trading platform.
- The broker is not listed as a publicly traded company.
- Registered members will not be able to trade cryptocurrencies on the platform.
- Not for investors with little capital since the minimum deposit in the USA is $10,000.
This Forex broker started operation in 1974 and it is listed of public trading. The trader will have access to various trading tools, like 28 charting indicators and 19 charting drawings. Mobile trading is also supported by the platform. The trader can also access various research tools for better trading experience.
- It is listed for public trading.
- It is also a bank and this gives assurance of better security for your funds.
- It has 6 Tier-1 licenses, 3 Tier-2 licenses and 1 Tier-1 license.
- The platform is also authorized to operate in the European Union.
- It is regulated by FSA for Japan, MAS for Singapore, FINMA for Switzerland, FCA fir UK and CFTC for the USA.
- Investors can make deposits via Bank Wire, Visa/MasterCard and PayPal.
- Support for mobile trading.
- It offers only 93 currency pairs
- The total CFDs offered here is 17,535
- Cryptocurrency cannot be traded as actual, but can only be traded as CFD
- It does not support deposit or withdrawal by Skrill
- It also does not support MetaTrader 5 or cTrader
This broker was established in 1989. Take note that up to 78% of Forex traders on this platform lose their investment to incorrect trading activities. Be that as it may, the platform provides a wide range of financial instruments and products. The pricing is also excellent with the trading platform designed for the Next Generation. The platform offers almost 10,000 tradeable instruments and the customer service proves to be reliable.
- The broker is listed as a publicly traded company.
- It has four Tier-1 licenses and two Tier-2 licenses.
- It is also authorized to operate in the European Union, Canada, Singapore and the UK.
- The broker supports social trading or copy trading.
- It offers 180 currency pairs also.
- You can trade cryptocurrency as CFD on the platform.
- Traders can make deposits and withdrawals via bank wire, visa/MasterCard and PayPal.
- It is not a bank
- It is not authorized for operation in the USA, Switzerland, Japan and Hong Kong.
- Only 9,848 CFDs are offered here.
- Skrill is not supported for making deposits or withdrawals.
- It does not support MetaTrader 5 or cTrader.
This Forex broker was founded in 1983 and up to 74% of its registered investor for retail CFD lose their money to inaccurate trading decisions. The platform offers competitive spreads also and the trader will have access to premium research tools. The trader can access may CFD products to be traded as spread bet. The minimum deposit is also very low at GBP 50.
- The company is listed as a publicly traded company.
- It boasts of three Tier-1 licenses and one Tier-3 license.
- The minimum deposit is very low.
- It is authorized to operate in the EU, Canada, Singapore and the UK.
- Traders can enjoy copy/social trading on this platform.
- You can trade cryptocurrency as CFD on this platform.
- Registered traders can make deposits or request withdrawals via bank wire, Visa/MasterCard and PayPal.
- It is not a bank
- The Forex broker cannot operate in the USA, Switzerland, Japan, Hong Kong
- It offers only 84 currency pairs
- The total CFDs available here is also not more than 4500
- You cannot trade cryptocurrency as actual
- The broker does not support Skrill for deposit or withdrawal
This Forex broker is relatively new; it was founded in 1999. About 72% of its retail CFD accounts lose money. However, the trader will have access to full-featured trading platforms and competitive pricing. It is also an award-winning Forex broker. The minimum deposit is also low; it stands at $50. There are also many research tools available to the trader so that he can make informed trading decisi0n each time.
- It is listed as a publicly traded company
- The company has four Tier-1 license and just one Tier-3 license
- It is authorized to operate in the European Union, Canada, Japan, UK and the United States
- You can make deposit and withdrawal money via bank wire, visa/MasterCard and PayPal
- It supports MetaTrader 5 and MetaTrader 4
- The minimum deposit is just $50.
- It is not a bank
- It cannot operate in Switzerland, Singapore, and Hong Kong.
- The broker does not support copy/social trading
- It only supports 91 currency pairs
- The total CFDs offered are just 4,500 against Saxo Bank that offers 35,000 CFDs.
- The broker does not support Skrill for depositing or withdrawing
- It does not support cTrader
How we selected the best Forex brokers
- The level of safety: We consider if the Forex broker is regulated or not and we also arrange them according to the number of regulatory/ operating licenses they have.
- Fees charged: All the Forex brokers in the list above also charge low fees on deposit/withdrawal, rollover, commissions and spread. This qualifies each of them to be mentioned above.
- Speed of trade execution: One other important factor we kept in mind while compiling the list above is the speed at which the brokers execute trades.
- Ease of deposit and withdrawals. All the Forex brokers listed above support various methods of deposit and withdrawals, including credit/debit cards, bank wire and PayPal.
- Quality of the customer support: All the Forex brokers we listed above also provide topnotch customer support from experience.
Frequently Asked Questions
Which is the best Forex broker for a newbie?
As a newbie, you can consider either Forex.com or City Index; the two of them have a very low minimum deposit of $50.
How should I choose a Forex broker?
When choosing a Forex broker, you should consider your trading requirements, the minimum deposit, the number of currency pairs supported and so on.
How will l know if the broker is regulated?
You can find the information on the website of the broker. Check if the broker is regulated with a top-tier regulator, like ASIC, CySEC, FSCA or FCA.