How to Choose a Forex Broker in South Africa?
Finding a legitimate broker can be a tough task in South Africa. However, with some guidelines, things become easier. Given below are some tips to help you find the best brokers in South Africa.
Select a broker with a good reputation
Checking the broker’s reputation is essential before opening a live trading account. Besides reading customer’s feedback on different social networking platforms, you can also check the broker’s rating on independent review’ websites, such as Trust Pilot.
Choose a broker that is in business for at least three years
Since the forex market is a decentralized market having no central authority regulating it, many new brokers find it easy to get into the business. However, factors such as regulatory requirements and liquidity abundance can make it difficult for a broker to sustain its existence. An incompetent broker is likely to become insolvent in a couple of years. Therefore, always sign up with a broker that is in the business for at least the past three years.
Check out the regulation of a broker
Regulation of a broker is by far the most crucial factor to consider before opening an account with it. A regulated broker offers safe investment opportunities as compared to a non-regulated one. First of all, you have the assurance that a regulated broker is sufficiently liquid. Secondly, the broker will keep your funds in segregated bank accounts. Thirdly, it will remain fair with you and ensure best ethical practices as required by the law. The regulatory requirements keep a broker stay on the right track. Therefore, always check if your prospective broker holds regulations from the concerned regulatory authority. In South Africa, the Financial Sector Conduct Authority (FSCA) is the sole regulatory authority to oversee forex brokers.
Check the deposit & withdrawal process
It is crucial to check how fast your broker processes the deposit and the withdrawal requests. Some brokers offer quick deposit service but lag in releasing your funds on time. Besides counting on the efficiency of deposits and withdrawal processes, you should also consider the available payment methods. For instance, wire transfers are likely to take more time than payments using debit or credit cards.
A broker serving across the borders tells a lot about its competency. The international presence of a broker shows that a broker had already been well scrutinized before it was allowed to operate internationally.
A well-reputed broker always maintains high standards of customer support. Besides quick support, the multilingual customer support staff adds to the competency of a broker. It is pertinent to check if you can access the broker in your domestic language, especially when you live in a country like South Africa that speaks more than eleven different languages of the world.
Five Best Forex Brokers In South Africa
Listed below are the 5 best forex brokers in South Africa that we have selected for you.
- XM Group – Reliable Forex Broker
- Exness – Fast Execution & low spread
- Hot Forex – Offers ZAR trading accounts
- FXCM – All-rounder
- IC Markets – ECN broker that supports Instant execution.
- Avatrade – offers fixed spreads
Factors that we considered while selecting the best forex brokers in South Africa.
1) Checked Brokers’ Reputation
To ascertain if signing up with any of the listed brokers was safe, we confirmed each broker’s reputation one by one. We read reviews of existing clients of the brokers on Reddit and Quora. We also checked the rating of each broker on third-party rating websites, such as TrustPilot. After collecting information from multiple resources, we made identifiable patterns. We ensured to include only those brokers that hold an excellent reputation in the forex industry.
2) Verified Regulations
Since we know the significance of regulated brokers, we took extreme caution while confirming it for all brokers listed above. First of all, we searched the company’s registration number on all the listed brokers’ websites. After finding the registration number for each broker, we crossed-checked it on the concerned regulatory authority website. We have verified that all the brokers mentioned above hold a valid license from FSCA to operate in South Africa.
3) Tested deposit & withdrawals
Generating forex profits make no sense if you can’t access them when needed. We checked the efficiency of the deposit and withdrawal process of the brokers. We made some deposits using different payment methods and asked them to process our withdrawals. We noticed that all the brokers are quick to process deposits and release funds right away. Honestly, we were sceptical before and were not expecting such quick services from them.
4) Confirmed demo accounts availability
We have also confirmed that all our listed brokers offer demo accounts. Customers can use demo accounts to learn and practice different trading and money management strategies without the risk of losing their real investment. The best part is that all the brokers offer demo accounts with unlimited expiry.
5) Explored various features
You can’t assess a broker’s competency unless you try the services and features offered by these brokers yourself. Therefore, we decided to explore these brokers’ different features and services, such as trade execution, trading interface useability, available leverage, and risk management tools. We found these brokers are quite competitive in every aspect.
6) Tested trading platforms
A broker without a user-friendly trading platform is good for nothing. If you are finding it hard to navigate through the trading platform of a broker, there is a chance that you may not be able to use other features either. Therefore, we navigated through all the trading platforms offered by our listed brokers and used multiple features available. We noticed that these brokers offer instant trade execution. Despite high volatile market conditions, we witnessed minimal slippage while employing stop-loss and pending orders.
7) Confirmed availability of mobile trading platforms
Understanding the need for mobility, all the listed brokers offer customizable mobile trading applications. Traders can use them on IOS and Android supported mobile phones and tablets. The respective versions of the mobile trading apps are available to download from App Store and Google Play Store. Not to mention, these mobile trading platforms come with nearly identical features as compared to desktop trading platforms, with a few exceptions.
8) Contacted customer support
We also checked how competent these brokers are in terms of customer services. The first thing we noticed that these brokers are quick to respond. We also tried raising a couple of complaints with them. It was good to see that the support resolved our issues just in time.
Forex Brokers in South Africa – FAQs
Is forex trading legal in South Africa?
Yes, forex trading is legal in South Africa.
Do forex traders pay tax in South Africa?
Yes, forex earning is a taxable income in South Africa
Who regulates forex trading in South Africa?
The Financial Services Conduct Authority (FSCA) is the sole regulatory body responsible for regulating matters that fall under the domain of forex trading.
How many forex traders are there in South Africa?
According to information available on www.businesstech.co.za there are nearly 190,000 forex traders in South Africa. However, the stats may differ on other online resources.
Can South African residents sign up with a forex broker from abroad?
Yes, they can. However, clients should prefer to sign-up with FSCA regulated brokers.
Forex trading in South Africa is relatively easier to start than in most jurisdictions of the world. However, the risk of losing your funds stays the same. Also, the increasing number of brokers in the country makes it difficult for traders to find a legitimate forex broker in South Africa. We hope this article will help you find the best forex brokers in South Africa.