According to forexbrokers.co.za, there are 190 000 active traders in South Africa the second-highest number of traders in Africa behind Nigeria.
South Africa’s Forex trading volume for the 2019 year was $20.3 Million which is by far the highest in Africa but only accounting for 0,3% of the global daily trade volume.
Forex trading is now perceived by many as an easy gateway to accumulating wealth, considering one doesn’t need any formal education to make money in Forex trading. As a result, it has drawn attention to many.
Trading Forex can be a disaster if one doesn’t understand what it entails to be a good trader. With the get rich quick mentality, many fall into scams from individual traders and some Forex brokerages who promise high returns in a very short space of time tricking innocent investors. If you are new to Forex trading, don’t rush into fully committing your funds before exercising due diligence. Be patient and take your time to understand the whole concept and techniques involved. Trading Forex does involve a lot of reading and practical work to perfect.
To start trading, you need to choose a Forex Brokerage and start trading a demo account if you are not familiar with trading.
There are a lot of Forex brokerages in the market, some registered while others are unregistered.
We have compiled a list of top-notch registered Forex brokerages in South Africa you can make use of in 2020. From the list, you will learn about different brokerages including where they hold their licenses, the amount required to open an account, etc.
Before we go on a journey of discovery, let us first look at some information that will help you understand Forex trading, who regulates it in South Africa and what you need to consider when choosing a Forex Brokerage.
A Forex Brokerage is a firm that provides traders with a platform that allows them to buy and sell foreign currencies. For these services, Forex brokers charge what is known as a spread for every trade (be it a buy or a sell) that you place.
Transactions are made in pairs of two different currencies so a trader buys or sells a particular pair of currencies using a Brokerage. Note that a spread is only charged when you place a trade.
One thing that you need to know as a Forex trader or a potential Forex trader is who regulates Forex brokerages in South Africa. Forex is regulated by the Financial Services Conduct Authority (FSCA) previously known as Financial Services Board until 1 April 2020. You need to know that the Forex brokerage that you are trading with is registered with FSCA, however, this doesn’t mean that you cannot trade with a Forex Brokerage that isn’t FSCA registered.
Trading with a Brokerage that is registered with FSCA has some benefits like lodging a complaint about any misconduct, report any reportable irregularities and get some or all of your money back during liquidation.
That’s how easy it is to get fair treatment from a Brokerage that is registered with FSCA if you are in South Africa. Your privileges may be taken away if you choose to register an account with a Forex Brokerage that is regulated in a foreign country or offshore and not in South Africa.
Choosing a Forex Brokerage to trade with can be very stressful considering the rampant fraud prevalent in the market emanating from bogus forex traders. You wouldn’t want to risk your money to a Forex brokerage firm that doesn’t understand client value.
There are a couple of things that are mandatory informing your checklist when choosing a Forex broker so that you receive satisfactory service from your broker.
This is something that you cannot ignore. Knowing that a Brokerage is regulated will provide you with a place to go whenever you feel that the Brokerage doesn’t perform the industry best standards.
For a Forex Brokerage to be regulated it means that the company is well-capitalized, depending on the regulatory authority the company will have to have a certain amount of money in trust should an unfortunate event happen that money is paid to traders and creditors.
Some jurisdictions would want a Forex Brokerage to reserve up to $1million for unfortunate events. Before depositing your hard-earned money into a Forex Brokerage firm make sure the Brokerage is licensed and must have a registration number. You can use the registration/reference number to verify from the issuing authority on the authenticity of the broker.
Is your data secured? That’s the question that you need to ask yourself before you even register for a Forex trading account. Remember you are going to use your credit card or use a payment gateway to fund your account, if your data is not secured then your information may be in danger.
Also, your personal information can be sold to advertisers so you need to be very careful when you register your account. Read the terms and conditions and familiarize yourself with them. It might be boring to read the 5+ pages of the T’s and C’s but at the end of the day, they are worth it.
You need to know the quality of the customer service offered by the broker of your choice. To do this check on reviews from different independent websites and see how others view the broker.
Hellopeter.com is one of the good websites to check how others perceive the Brokerage. At least you will get a view from independent people that have used and experienced what they have written about.
Consider tools and materials that the broker offers. Brokers offer daily videos and emails containing crucial information on markets. These are essential to your trading and should be considered. Other brokers offer seminars at no cost and you get to network with traders from different places. Check on the quality of the material and tools provided by the broker, they nerd to be quality and should not be misleading. If you are going to have free signals from your broker then try the signals on a demo account before using them on a live account. Just do your proper checks and error.
You need to consider your trading costs. If you are a high leverage trader then this is more important too because of the amount of money that you may lose in one trade.
You need to know the spread that the broker charges and also the withdrawal costs. You are into Forex trading so that you can make money so every cent counts and you should do everything to save it.
You don’t have to compromise quality because of trading costs, everything needs to balance and a good trading platform is one where you get good rates and quality services.
Now that you know what is a Forex Brokerage and who regulates Forex Brokerages in South Africa coupled with what you need to consider before opening a Forex account, we are now moving to the next phase of the 10 best brokers in South Africa.