These are the best Forex brokers available to South African traders that we put together as a guide. These are all trusted international brokers which take South African accounts and deposits. While what brokers offer traders are very similar at the core, there are a couple areas that set them apart.
If I were new to trading and choosing from this list, I would look to see if a broker takes low deposits, if the broker has social trading in a web-based application, if the broker charges commissions on the trades and also the bonuses that each of them offers first-time depositors. Primarily, it is most important that you understand how forex trading works, and understand that you can opt to sign up for a demo accounts which you can use to find the right broker before making a deposit. If the regulatory jurisdiction of a broker is important to you, here is our list of only FSB regulated forex brokers.
|– Regulated in South Africa|
– Local Nedbank Depositing
– 200:1 Leverage
– Automated trading
– 20% First Deposit Bonus
– Free trading signals
|Exclusive 20% Bonus on First Deposit for TradeForex SA Clients!!||FSB||Sign Up|
My experience with CM trading
I am a big fan of CM Trading because they are regulated fully by the FSB in South Africa with a local office in Sandton. CM Trading have numerous advantages for us South Africans, in addition to the offices, because I am able to easily transfer funds to a local NED bank branch directly. Being in South Africa is often frustrating when we have to wait for Europe to open to make deposits, so if you are looking to have more flexibility, CM could be good for you. If you are a bigger trader, CM uses Intercash so that funds are moved in and out of the trading account as fast as possible – but I have not yet tried this.
|– Regulated in South Africa|
– 400:1 Leverage
– Lots of educational resources
– Voted best broker 2015
|100% bonus on first deposit|| FSB|
My experience with AvaTrade
I like Avatrade because it is a well-established broker that covers all the basics, and does them well. AvaTrade is regulated in South Africa by the FSB, they offer training for beginner traders so you can learn, and they also support all major trading software so you don’t have to change software because you change brokers. If you are a beginner looking to start trading in South Africa, AvaTrade is highly recommended.
|– Leading beginner broker|
– Easy to use platform
– 400:1 Leverage
– Available to South Africans
|50 USD|| CySec|
My experience with Etoro
Etoro has an extremely successful user base which has enabled it to create an effective social trading tool which encourages traders to follow other successful traders in the brokerage. I would recommend this broker to any beginner because the practice accounts have a lot of money in them to practice with, and their software makes trading simpler and removes a number of the complexities. I would also recommend it to an advanced trader because of the high 400:1 leverage, making larger trades easier. Though Etoro is not perfect, with some downtime and lag of it’s software, the pros of this broker far outweigh the cons.
|– Free Signals for TradeForexSA signups!|
– Works with MetaTrader platform
– 400:1 Leverage
– Offers a mobile version of the platform
– Available to South Africans
|50% Bonus up to $2000|| CySec|
My experience with Easy Markets
If you have traded with the MetaTrader platforms before, then you should like this broker because you don’t have to go through much of a process of configuring up your account. While the website and the sign-up process could be easier, the staff are welcoming and helpful if they are called upon to help out. If you want a broker with good leverage, Easy Forex is probably not for you, but if you want to start off a trading career with low risk then that low leverage does play in your favour.
|– Ultra-thin spreads as low as Zero Pips making trading even more profitable|
– No minimum deposit on micro accounts
– Available to South Africans
|$30 No Deposit Bonus and then 50% up to $500 and 20% up to $5000 of bonus|| CySec|
My experience with XM
I first started using XM (formerly Trading Point) when I was trading binary options, and really appreciated the advanced uses of this broker. This broker has huge leverage, and tight spreads but to mitigate risk hedging is allowed. If you are a seasoned trader or want to learn with many of the features at your disposal then Trading Point is for you. This broker has no minimum on the micro and zero accounts making it hugely attractive for newcomers too.
Q ‘n’ A Session for Would-Be Traders
What is Forex Broker?
In the financial markets, a Forex broker is an intermediary or the middleman that allows people to have access to the Interbank market. The Interbank market is simply a network of banks and electronic brokering platforms that trade with each other and offer liquidity. A Forex broker will offer you currency quotes at which you can buy and sell in exchange for a small fee or commission.
What do Forex Brokers do?
A Forex Broker simply matches clients’ orders either internally against another client or by passing the order to their liquidity providers. In some cases, a Forex broker can be the sole counter-party of your transactions. Put simply, a Forex broker has two fundamental functions: to connect traders to the Forex currency market and secondly, to provide you currency quotes for buy and sell transactions.
What is Regulated Forex Broker?
A regulated Forex broker is simply a licensed Forex broker that operates within the boundaries set by the governmental regulatory bodies. The regulatory agencies ensure that the retail Forex traders have part of a fair trading environment and protection against possible frauds. A Forex broker with a supervisory agency is perceived to have more integrity.
Which are the Majors Regulators? (CySec, FCA, ASIC, others)
The top leading regulatory agencies are:
- US – National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC)
- Europe – Financial Services Authority (FSA UK) and Cyprus Securities and Exchange Commission (CySEC).
- Australia – Australian Securities and Investments Commission (ASIC)
- South Africa – Financial Services Board of South Africa (FSB)
- Malaysia – The Security Commission of Malaysia is in charge of overseeing the Forex brokers in Malaysia.
How do Forex Brokers Make Money?
For the privilege of offering you access to trade the Forex currency market, the majority of the Forex brokers will charge their clients either a commission or the spread. This is simply associated with the cost of doing business in the Forex market. However, a Forex Broker can make money through three different income streams and beside commissions and the spread he can also make money if your broker is a Market Maker and take the other side of your trade because he makes money every time you lose.
Can You Trust Forex Broker?
Even if your Forex broker is regulated and has an outstanding reputation, it’s best to spread your eggs in different baskets. In other words, while you can certainly trust a regulated Forex broker you can’t protect yourself from the possibility of your broker going bankrupt. In this regard, it’s best to do your own research and spread your hard earned money across multiple brokers. We have compiled a list of Forex brokers regulated by the FSB here.
I need a managed account. Do brokers offer this service?
Some brokers will do operate a managed account for you, but it is rare. There are also independent money managers who will be able to manage your trades while he/she is trading for themselves. It is important that you read our piece on managed accounts, and understand the risks involved. It goes without saying that you would look into the performance of the trader, but this is something they are very transparent about.
Do Forex Brokers Trade Against You?
In the case you’re trading through a Market Maker Forex broker then, in this particular case, the broker might trade against you and take the other side of your transaction. All you need to understand about market makers is that there isn’t someone at the other end of your trades doing their best to stop you out, that doesn’t happen.
What a market maker is doing is that they are simply taking the other side of your position since it’s assumed that most retail FX traders lose money. This makes total common sense for the broker to be on the other side of your trade because they can profit from that.
What is STP/ECN Forex Broker?
An STP/ECN Forex broker is an Electronic Communications Network and Straight through Processing dedicated for execution of currency transactions in a direct manner. In this type of trading environment, your orders are processed straight through to the Interbank market, connecting you directly to the liquidity providers.
What is a Market Maker Broker?
Dealing Desk Brokers are also called market makers, which means the Forex Brokers sets their own price rates for currency transactions. In essence, a Dealing Desk Broker will fill their clients’ trades by taking the counter-party of the trade. This means the Forex Broker trades against its client base.
What is Scalping?
Forex scalping is a strategy where a trader seeks to profit from the small currency exchange fluctuations. Usually, a scalper enters and exit trades several times a day and the trade holding time period is very small (generally few minutes).
What is Hedging?
Currency hedging is a way of attempting to protect yourself against a negative event that can send the market moving against your initial position. You can think about hedging as a form of insurance if something goes wrong with your trade. Direct hedging is when you buy a currency pair and then at the same time you sell the same pair.
What Forex Broker to choose?
Choosing a Forex broker can be an intimidating task when you have at your disposal countless options to choose from. However, we can consider five important elements and requirements to look for when choosing a Forex broker:
- Regulation, is your Forex broker regulated?
- Is it regulated by top leading regulatory bodies?
- How does your broker make money: spread and commission or by trading against you?
- Is your Forex broker a true ECN/STP Broker?
- Does your broker allow scalping and hedging?
If you have managed to answer YES to all five questions there might be a chance you’re dealing with a reputable Forex broker.
What platform or software will my broker offer?
Some brokers have proprietary software while others use popular platforms like MetaTrader4, cTrader, and other software packages. Most brokers also have forex trading mobile phone apps. No matter which type of platform it is, however, every broker is going to offer something to you.
What types of currencies and commodities should I look for?
A good broker is going to have between 30 and 50+ currency pairs, gold and silver, CFDs and other commodities you can trade with. You don’t have to settle for currency alone just because you’re seeking a Forex broker.
How do we compare Forex brokers?
We use a number of factors for evaluating brokers, and we only promote those we believe are worth using.
- We only list brokers which are regulated by one of the major regulators. We believe that FSB regulated brokers are the best for South Africans and we actively request brokers that we do feature to become members of the FSB. These regulations make your funds more secure.
- The option of a low initial deposit is important to some traders. We appreciate brokers who offer micro-accounts to beginner traders and allow trading in micro lots so that traders only need to risk what they feel is acceptable.
- Traders must understand if the broker is a Dealing Desk or Non-Dealing Desk broker. This makes a difference in how the broker makes money and also makes clear where a conflict of interest could occur.
- The best brokers offer free educational materials and coaching that a trader would need to get started and that sometimes includes the broker making a phone call to clear up any details.
- We like to review the trading conditions and support of forex trading brokers. These are things like the types of Forex market orders available, the trading costs, and try to identify those with a larger range of currency pairs available to trade.
We have worked for many years in the industry, and we are well connected with the brokers and the reputations of the brokers in the community. We believe that a forex trading experience should be safe, and fun.
A Final Note
Every Forex trader is different in his or her needs and desires, so there is no one-size-fits-all broker. To find the right fit, make sure you’re reading reviews and vetting the broker properly. Take your time to choose the best platform, the best account, and make sure you understand the risks involved.