Trade Forex SA is South Africa’s #1 Forex broker review and comparison website. We break down what Forex trading is, how it works, how to join a South African Forex broker and start trading, the terminology used along with supporting educational content.
Before trading leveraged products a potential trader needs to understand the risks involved, the importance financial regulation plays in keeping trader’s funds safe, and how brokers charge clients commission.
Then, you can make an informed decision of whether or not Forex trading is right for you, get trading insights from the education section, compare and evaluate brokers matching your needs.
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Since starting TradeForexSA in 2010, we have signed up and traded with 30+ brokers, and turned away more than double as many. To find the best Forex trading broker, we compared them on the following criteria.
- Regulation is trust in the investment business. There are major regulators and minor regulators, and we took all of them into account.
- Trading conditions are the details of the product the broker has to offer the trader, and we compared them.
- Platforms are the software a broker offers traders to trade on and tested each of them.
The current broker rankings are calculated based on broker regulation, platform choice, and trading conditions for the clients. To see our full calculations in each of these areas, here is our Google Spreadsheet.
Our Forex Broker review process
TradeForexSA.co.za compares the best brokers available able to our South African audience. We maintain memberships at each broker we review, to continually monitor them. For every broker we monitor:
- Broker Regulation
- Account Types Offered
- Trading Platforms & Tools
- Mobile Trading
- Spreads and Commissions
- Customer Support
- Analysis tools
- Educational Material
What is Forex Trading?
Forex trading is the buying and selling currency pairs with the goal of making a profit from the fluctuations in the market. To open a trade, a trader must choose a currency pair, and the direction they anticipate the value of the currencies moving in. As the value of the currency pair changes, the trader will close the trade for a profit or a loss.
Currency pairs are leveraged products, which are traded via an intermediary Forex Broker. Leverage enables the trader to make more significant trades than what their account balance allows, by borrowing additional funds via the brokerage, but the trader is still responsible for the losses for the full trading amount — as such, using high amounts of leverage can cause significant account losses.
How to Trade Forex in South Africa
To become a successful trader, it is essential to:
Frequently asked Forex Questions
How to trade Forex in South Africa
To trade Forex in South Africa, you first need access to a computer or mobile phone with an Internet connection. Once you are set up, you can join a Forex broker which will be your connection to currency markets, and sign up for an account.
How to start Forex trading in South Africa?
To start trading Forex, you first need to find a Forex broker that suits your needs. The best way to do this is to find a transparent broker comparison website like this one or meet with an Introducing broker who already has a relationship with a single broker and can give assistance to get you started. Start trading with a regulated Forex Broker.
How to register for Forex trading?
The registration process for Forex trading starts on the broker’s website. The first step in the registration is to complete a sign-up form with your personal information. The second step of the registration is passing through the KYC (know your customer) process, where you will be required to send photographs of your identity documents and proof of address. This process is designed to verify that you are who you say you are and prevent money laundering and other criminal activities from happening using the broker as an intermediary.
How much money do I need to start Forex trading in South Africa?
Depending on the broker, you will be required to deposit between $5 and $500 to open your account. The amount you deposit will impact the amount of leverage you will be able to use in your trades, as equity and margin are essential in Forex trading.
How to open a Forex trading account in South Africa?
Opening an account with a Forex broker is a simple two-step process. The first step is to create an account by providing your details, and the second is a verification process that involves submitting electronic copies of your identity card and proof of home address. Once the account is verified, the account will be open for making deposits and trading.
How to make money with Forex trading?
The majority of retail traders do not make money from Forex trading. Forex trading can be profitable or unprofitable depending on how the trader trades, and the market conditions at the time they hold the investment.
A trader will make money by investing time in learning about how the market moves, learning from other traders and studying different chart patterns for clues that help predict future market movement. All of this will add up to a successful trading strategy.
Note that all Forex traders will always lose a portion of their trades, so it is imperative to set a win-loss ratio that guarantees overall profitability, and as a general rule, a trader should not invest more than 2% of their wallet in a single trade. Read our 7 vital Forex Trading tips for beginners here.
What are the risks of trading Forex?
Trading Forex carries significant risk. A risk that includes losing all the money in your trading account over a very short period. Central to our education we have a piece on risk management and developing a trading plan. The main risks of trading:
- Risk 1: The Forex market is extremely volatile at times. It is, after all, because of this volatility that we can profit from trades. But the market can move very swiftly, and this can mean a trade can go against you in a very short period. If you are trading, you must be active in watching your trades all the time.
- Risk 2: The Forex market is not something you can predict. There are just too many factors and actors on the market for it to be fully predictable. Traders need to set a win-loss target ratio where you account for some losses and set a strategy to minimise them.
- Risk 3: Forex trading requires the use of leverage. Leverage is a tool used in trading to apply your profits, but it also amplifies your losses which are automatically deducted from your trading account. Your account balance can be wiped out with a single bad trade.
- Risk 4: In some cases, interest can be charged on your trades. This is when you carry them overnight where a tom-next adjustment is made, and this could mean that your broker will take funds from your account to pay this fee.
Do forex traders pay tax in South Africa?
Forex gains are not tax-free income, and all profits from your Forex trading are taxable even if your brokage and capital are overseas. South Africans are expected to declare taxes just as with any other income either as an individual or a company. For more on this read our taxation article for forex traders who reside in South Africa.
What is the FSCA and the FSB?
South Africa’s investment regulatory body is called the FSCA (Financial Sector Conduct Authority). It was formerly known as the FSB. It is their job to regulate all non-banking service providers in South Africa. Regulators like the FSCA are there protect the public from financial crimes and irregularities. Today, in addition to regulating trading on the JSE, the FSCA regulates Forex trading brokers.
Demo accounts are a good way for a new trader to try a broker without risking any capital. Demo accounts often have all of the features you would expect from the broker, and it gives the trader a good feel for what trading would be like with MT4 or with the broker’s own software or apps. Read more.
Is Forex Trading Right For Me?
Above is a reasonably good overview of what you can expect with Forex trading. By now you should know that it is high risk, that you need to find a broker that you feel suits you best, you should know the amount you want to put into that account with a broker. Forex trading takes a commitment to learning, and you should be ready to:
- Compare brokers to find one that suits you.
- Read our education section and learn everything you can.
- Understand the way the FX market and CFD trading works.
- Learn the software and tools that will power your trading.
- Be prepared to lose all the money you place in an account. Don’t deposit any money you can not afford to lose.