Many Forex brokers operate in South Africa, and choosing the right company will have an impact on your trading success.
Each trader has a unique personality and will have different needs when it comes to education materials, expert analysis, and trading tools. These, provided the brokerage, will vary and so the trader must shop around and select the right company to partner with.
We have conducted our research by trading with and analysing the most popular Forex brokers operating since 2008. When comparing brokers, we consider the reputation of the broker and how they compare with one another. Below are our findings which will help you find a regulated and reliable Forex trading platform.
We focus on key aspects of the brokerage business. Our review, therefore, compares companies’ financial regulations, trading conditions, account types, and deposit requirements, as well as their reputation within the industry.
Best Forex Brokers in South Africa
FXTM is the best international FSCA-regulated ECN/STP broker and requires low minimum deposits to open accounts. In 2018, FXTM won the award for Best Forex Education Provider Africa from the International Business Magazine and Best Trading Conditions from World Finance.
Standard accounts – MT4 platform support, a minimum deposit of 10 USD and spreads from 1.3 pips on FX trades.
ECN accounts – MT4 & MT5 platform support, a minimum deposit of 200 USD, and spreads from 0 pips on FX trades.
FXTM won the award for Most Innovative Broker, 2017 for their focus on growing the product offering to include cutting-edge pivot point technical analysis tools, copy trading functionality on ECN accounts, and expanded payment methods.
For the beginner trader, FXTM has short introductory articles, and additional videos to introduce traders to the Forex trading. For those who wish to keep learning, there are more advanced articles published daily, as well as webinars that are free for anyone in learning from professionals.
|Up to $10,000 in savings through the FXTM loyalty program. Applicable in FT Global Limited (T&Cs apply)|| FSCA|
Markets, a brand of Safecap Investments Ltd, first became CySEC-regulated in July 2008 and now boasts 5 million registered accounts. As one of the most recognisable brands in online Forex trading, Markets became regulated by the FSCA in South Africa in 2012, and now offers South Africa specialised accounts that include a welcome bonus and ZAR account currency.
In 2017, Markets was recognised Internationally with awards for Forex Provider of the Year and Best Forex Trading Platform at the UK Forex Awards which further shows the respect the industry has for the commitment the brokerage has to its customers. Continue reading
|250 ZAR No Deposit Bonus|| CySEC|
For their streamlined onboarding and trading experience, AvaTrade has earned themselves the FX Empire Best Trading Experience 2018 award, while holding FX Empire Best Broker of the Year honour continually from 2011 to 2017.
Regulated first by the Central Bank of Ireland in 2009, they acquired ASIC regulation from Australia in 2011 and South African regulation from the FSCA in 2015. With over 200,000 active traders around the globe, on both the MetaTrader 4 and AvaGo platforms, and with the award for Best Trade Execution by the African Finance Expo in 2016, AvaTrade is a good trading choice for South African traders. Continue reading
|100% bonus on first deposit|| FSCA|
Rapid growth since 2009 has landed XM upwards of 1.5 million clients from 196 countries. XM is considered to be the broker with the most extensive experience and in-depth knowledge of the global markets with an operational philosophy that is by ensuring client satisfaction; they earn client loyalty through 24/5 personal customer service, varied account types and competitive trading conditions.
From their start, XM set out to create an MT4 setup with high-speed market execution and a no re-quotes policy. While that policy still exists today, XM has continued to improve trading conditions further by offering accounts with no hidden commissions on trades, tight spreads as low as 0 pips on all major currency pairs, and fractional pip pricing.
XM’s pioneering trading infrastructure earned XM the Best Forex Execution Broker by Shares Magazine’s at the UK Forex Awards 2017, the Best FX Broker Europe at the World Finance Forex Awards 2018, and Best Trading Support for 2017 Award from the Capital Finance International Magazine. Continue reading.
|$30 No Deposit Bonus and then 50% up to $500 and 20% up to $5000 of bonus|| CySEC|
HotForex, the winner of the Best New Forex Broker South Africa 2016 at the Global Banking & Finance Review Awards, is a leading South African regulated STP broker who prides themselves on being a stable, fair, secure and transparent.
Clients enjoy the MetaTrader 4 & 5 platform, a selection of account types with account currency in either USD or ZAR, and an ultra-low minimum deposit. Main account options are:
- Micro: Minimum Deposit: $5/R70 – Spreads from 1 pip, 1000:1 leverage and bonus offers
- Premium: Minimum Deposit: $100/R1400 – Spreads from 1 pip, bonus offers, and more profitable trading.
- ZERO: Minimum Deposit: $200/R2800 – The pro account with spreads from 0 pips and commission charged.
HotForex has award-winning customer service with South African toll-free phone numbers, a great course for beginner traders, and a section devoted to helping traders find trading opportunities. This quality of education is comparatively unique compared brokers we list.
|100% SuperCharged Bonus on all deposit of over USD 250 & other seasonal bonuses (T&Cs apply)|| FSCA|
Khwezi Trade is a proudly South African FSCA regulated broker headquartered in Cape Town. As is common with other STP brokers, Khwezi Trade uses MetaTrader 4 as their single choice of platform, as it provides fast and reliable trade execution directly on the market.
In contrast to other brokers, Khwezi Trade has a single account option with an R2,000 minimum deposit and a personal account manager. Leverage is less than is offered by other international brokerages, and currency pairs are more limited, but the clear appeal with Khwezi Trade is their competitive trading conditions that rival other local players.
For beginner traders with higher deposits above R15,000, Khwezi Trade awards clients five trading sessions led by a professional trader as well as more profitable trading conditions. For deposits over R50,000 unlimited training is provided.
For a South African trader looking for a genuinely local broker, Khwezi Trade has local regulation, local offices, local staff and uses local banks.
|Varied promotional gifts for deposits above R30,000 (T&Cs apply)||FSCA||Sign Up|
Khwezi Trade Review
FSCA regulated, and with over 870,000 client accounts, FxPro is one of the biggest international brokers regulated in South Africa. Major awards shows and institutions are continually showering FxPro with honours including top accolades like Best Broker 2018 and Best Forex Trading Experience 2018, which is the pinnacle of success.
The account options at FxPro are arranged by platform, which is not the case at most other brokers. Accounts are available with either MT4, MT5 and cTrader, where all accounts have a demo option, and the same minimum deposit of 100 USD and spreads as low as 0.6 pips.
The education section is smaller than that of other leading brokers. Despite the lack of structure and depth, the material that is offered is updated and honest and hosted webinars are free to join a couple of times a week.
FxPro is the broker choice for traders who need a reputable international broker while still being FSCA regulated, supporting a broad platform choice and a reasonable minimum deposit.
|FxPro does not offer any promotions or bonuses to either new or existing customers.|| FSCA|
Pepperstone is a leading Australian ECN/STP Forex broker who has recently started gaining a lot of international recognition for their quality of service, culminating in winning the top award for Best Forex ECN broker 2018 at the UK Forex Awards 2018, where in previous years the award had gone to industry giants.
Supporting more major trading platforms – MT4, MT5 and cTrader – than other brokers, on two simple account types with a minimum deposit on both of 200 USD, is the Pepperstone offer.
Standard Account – 1.0 pip spread, STP execution and no commission on trades.
Razor Account – 0.0 pip minimum spreads, ECN execution, and commission on trades.
Unlike other brokers, traders who choose Pepperstone will be supported by award-winning 24-hour customer support having won Best Forex Trading Support in 2018 at the UK Forex Awards, the best trading conditions possible, a reliable starter education and a 50K USD Free Demo Account.
|Pepperstone does not offer bonuses to clients.|| FCA|
Founded in 2001, easyMarkets (then easyForex) was one of the first brokers online. They quickly became regulated by ASIC in 2003 and CySEC in 2007 to add trust to a largely distrusted investment market. The easyMarkets company values of simple, honest and transparent are reflected in the recognition that they have recently received from the industry. Being awarded the Best Trading Platform and Most Transparent Broker awards in 2017 from FX Empire and Forex-Awards respectively, showed that the industry agreed that easyMarkets lives up to these values.
easyMarkets has always innovated, introducing tools like negative balance protection and guaranteed stop loss back in 2001 – these tools have now become industry standards. Their innovation continued with the unique Freeze Rate tool (2005) and dealCancellation (2016) which were both intended to support beginner traders and keep trading transparent and simple. In 2018, easyMarkets won the Most Innovative Broker of 2018 at the World Finance Markets Awards, which was another sign that they are respected as pacesetters. Continue reading
|50% Bonus up to $2000|| CySEC|
CMTrading, which is a brand of Blackstone Marketing SA, was founded in 2012 as a purely South African broker and regulated by the South African FSCA. In 2017 CM Trading won Best Performing Broker in Africa from African Investor which was seen as industry recognition for the organisations’ quality. CMTrading features include support for MetaTrader4, mobile phone apps, a copycat tool allows users to follow and copy professional traders, both live and demo accounts and segregated bank accounts that keep client trading funds separate from company funds. Continue reading.
|Exclusive 20% Bonus on First Deposit for TradeForex SA Clients!!||FSCA||Sign Up|
How We Compare Brokers in South Africa
Since starting TradeForexSA in 2010, we have signed up and traded with more than thirty brokers and have turned away twice that many.
To find the best Forex trading brokers, we have used the following criteria.
- Regulation is trust in the investment business. There are major regulators and minor regulators, and we took all of these into account.
- Trading conditions are the details of the product the broker has to offer the trader. In each instance, we looked at the detailed product on offer.
- Platforms are the software a broker offers traders to trade on. We tested each of them.
Forex Broker Regulation
What is a regulated Forex broker?
A regulated Forex broker operates within the boundaries set by governmental regulatory bodies like the FCA, FSCA, CySEC & ASIC. These regulatory agencies ensure that the broker maintains a fair-trading environment, and anti-money laundering efforts, all the while operating strict auditing oversight and processes to protect client funds. A Forex broker that is regulated by more than one major regulator is understood to have more trust and integrity.
Who are the major regulators?
These are the International regulators that are respected globally for their commitment and for creating strong rules and processes and enforcing them strong auditing policies. The South African national regulator is called the FSCA, and while it is not one of the major international regulators, it is the most credible regulator on the African continent. The major regulators are:
United Kingdom – Financial Conduct Authority (FCA)
Continental Europe – Cyprus Securities and Exchange Commission (CySEC).
Australia – Australian Securities and Investments Commission (ASIC)
Forex Broker Types
Forex brokers fall into two main types of brokers – Dealing desks (DD) and Non-dealing desks (NDDs). These categories are differentiated by how the broker executes trades. While there is only one type of DD broker, NDD brokers are split up into STP and ECN brokers, and some NDDs offer a combination of the two called STP/ECN brokers.
Pure STP Forex Brokers
In the NDD category, a Pure STP (or Straight Through Processing) broker, will never interfere with your trade, and the only source of liquidity comes directly from the market. STP execution will mean that if there is no liquidity in the market, a trade will have slippage, and the trader will get a requote. Pure STP brokers are entirely free of conflict of interest, but traders should expect continuous requotes, and slower trade execution speeds. The top Pure STP brokers are:
|Forex Broker||Max Leverage||Regulated by||Sign up &|
|Pure STP||FSCA Regulated.||Sign Up|
|Pure STP||CySEC Regulated.||Sign Up|
|Pure STP||FCA Regulated.||Sign Up|
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ECN Forex Brokers
True ECN (Electronic Communications Network) brokers send your orders directly through to the liquidity providers who are partnered with the broker. These providers can be other brokers or dealing desks, or the major banks. In a True ECN environment, traders have direct access to the Interbank market prices and have an accurate picture of the entire trading environment.
STP/ECN Forex Brokers
An STP/ECN Forex broker is both an Electronic Communications Network and a Straight Through Processing broker. Depending on the trader profile, or the trade itself, the broker will decide which of the execution methods should be used. Per regulation, the broker must choose the execution method that best suits the client interests.
If there is liquidity in the market for a particular trade, then the STP execution method could be used. But if it is better for liquidity to be taken immediately from within the network, then ECN will be used. This combination of execution types is intended to be able to help traders get liquidity and to execute trades faster without the broker needing to become the market. The top ECN/STP brokers are:
|Forex Broker||Max Leverage||Regulated by||Sign up &|
|ECN/STP||FSCA Regulated.||Sign Up|
|ECN/STP||FSCA Regulated.||Sign Up|
|ECN/STP||ASIC Regulated||Sign Up|
Market Maker Brokers
Market Makers, also called Dealing Desks, operate in a completely different way. Instead of executing the trade on the currency market, a Market Maker will provide their client’s trades liquidity by immediately taking the counter-party of the trade and becoming the market. The top Market Maker brokers are:
|Forex Broker||Max Leverage||Regulated by||Sign up &|
|Market Maker||FSCA Regulated.||Sign Up|
|Market Maker||FSCA Regulated||Sign Up|
|Market Maker||CySEC Regulated.||Sign Up|
While this means that there will always be liquidity for any trade, taking the counter-party implies that the broker is continually trading against its client base and that it profits directly from the client’s losing trades. This opens up a direct conflict of interest.
Forex Broker Reputation
Can you trust a Forex broker?
Four things should be considered when determining if a broker may be trusted – regulation, trade execution method, client fund management, and industry recognition of the broker’s achievements.
The more major regulators that the broker group is regulated by, the more oversight the group has. The number of regulators overseeing the broker’s processes gives a strong indication of the level of trust the government regulatory agencies have in them.
It is more of a concern if a market maker broker is regulated by fewer major regulators. Therefore, a heavily regulated market maker is considered more reputable than one with lesser regulation. It is noteworthy that some market maker brokers have strong reputations and lots of client resources.
The execution method of clients trades is another component because if there is a financial incentive for your broker to have you lose your trades, this could be seen as making the broker less trustworthy.
Most regulators require strict processes to keep client funds safe. This process includes placing client funds in segregated accounts at major banks in the local jurisdiction. Segregated bank accounts that are audited every evening means that client funds are protected against the broker going bankrupt.
Industry awards are given to brokers from journalists, financial watchdog organisations and their peers. While it can be argued that these award ceremonies are biased, they remain the best gauge of why good brokers are recognised by industry specialists.
Do Forex brokers trade against you?
When your broker is a Market Maker, then the broker is the market and is trading against you by taking the other side of your trade. Since a vast majority of trades by retail traders are lost, a market maker is making money in most client trades.
STP brokers do not have any conflict of interest and do not trade against you, and an ECN broker may play counterparty to the trade.
How do Forex brokers make money?
Depending on how a broker is executing trades, there are different ways they are making money. Forex brokers will either make money charging a commission on the volume of the trade or the spread.
STP and ECN brokers will make money from a tight spread and a commission, which is calculated on a per lot amount.
Market Makers will make money from the spread – the difference between the buying and selling price of the currency pair. Since a Market Maker will become the counterparty to any trade, they will also make money when clients lose trades.
Forex Broker Platform Choice
A minority of brokers have proprietary platforms while others use mainstream trading platforms like MetaTrader4 and cTrader. If you do choose MetaTrader 4, we have a guide to setting it up as it can be complicated to get going. Select brokers will offer their documentation and services to set up the trading software.
When it comes to choosing a broker, finding the right platform can make a substantial difference to a trading career. While MetaTrader 4 & 5 are the most common of CFD trading platforms, its older interface and the software’s need to adjust advanced settings before starting, make it less accessible to beginners. cTrader, on the other hand, has a more modern interface and is more comfortable for the beginner trader to set up.
If you are an experienced trader with a particular software choice in mind, or if you are a beginner seeking to learn more about brokers and platform options, we have put together a list of the best forex trading platforms for traders and the brokers that support them.
All brokers have mobile phone apps. Some brokers have developed this own priority software, but many brokers rely on the MetaTrader software for IOS and Android.
Forex Broker Educational Material
It is important to most beginner traders to get some educational support, and each broker varies significantly in what material they provide. The minimum that a broker will offer is some general videos and articles, but other brokers have invested in creating a small trading university that includes reading and video material as well as live webinars with experts. Each of our reviews has a section on the educational content to help beginner traders decide the best path forward.
Forex Broker Trading Conditions
Spreads, measured in pips, tell traders how profitable their trades can be and the fees that the broker will charge for that currency pair.
The spread tells the trader if the buy and sell prices for any currency pair are far from each other, or close to each other. If the spread is 15 pips, that is considered a wide spread, where a 0.4 pip spread is deemed to be tight.
Brokers will have different spreads on their FX pairs, but to maximise profits, a trader will always find a broker who has the tightest average spreads on the pairs they trade. If you are trading with an NDD broker using STP or ECN execution, also consider that a per lot commission will be charged in addition or in conjunction with the spreads.
Leverage amplifies the volume of a Forex trade. Leverage is essential in Forex trading because the movements in the market are so small that if there were no way to increase the size of the trade, it would be near impossible for individual retail traders to make money from their trades.
Leverage is presented in a format like 300:1 – in this case, a trader can increase the size of the trade by a maximum amount of 300 times but will remain liable for losses on the full amount of the trade.
Using high volumes of leverage dramatically increases the exposure of the trader to risk, which has led some regulatory bodies like CySEC to restrict leverage to 30:1 for retail traders. The maximum leverage offered varies among brokers, and brokers may also reserve the right to limit a client’s leverage based on the client’s trading experience.
A large broker will have a lot of different assets available to trade including Forex, CFDs, cryptocurrency, equities, softs, energy, metals, bonds. A good Forex broker should have 50+ FX pairs.
Forex scalping strategy is where a trader seeks to profit from sizeable rapid price changes in a short period. Scalping opportunities are usually created when significant unexpected new events happen, or when the equity markets open. A scalper, a trader who employs a scalping strategy, enters and exit trades several times a day, and closes all trades on the day they were opened.
Hedging is a way of protecting yourself against an adverse event happening, that risks open trades, and can be seen as a form of insurance. Direct hedging is a common hedging strategy, where a trader buys a currency pair and then sells the same pair at the same time. Not all brokers allow hedging on their platforms, so here are brokers that allow hedging.
Forex Broker Account Types
Each broker will have various account types, and there is a trend in the industry to have fewer account types available than in years past. The primary distinction between account types is between the Live or Real accounts, Demo accounts, and Swap-free accounts. Managed accounts are available, but rare.
Live or Real Accounts
These accounts use real money, and everything that you do in this type of account will affect your profit or loss.
These are accounts loaded with fake money and does not expose a trader to any risk. Demo accounts give traders an opportunity to try the trading platform, customer service, research area, and trading conditions before committing real money. Most demo accounts are time limited but are easy to reactivate. These are the best demo accounts.
Select brokers will operate a managed account for you, but it is rare. There are independent money managers who can manage your account while they are trading for themselves. It is vital that you read our article on managed accounts and understand the minimum deposit requirements and additional risks involved when trading CFDs.
How to deposit with a Forex broker?
Each Forex broker is going to have different deposit methods, but all brokers will have a deposit by credit/debit card and bank transfer option. Select brokers will have regional payment methods, but South African local deposit methods have not yet been adopted by brokers. On occasion, Forex brokers will accept Bitcoin deposits in additional to traditional currency.
Which broker should I choose?
Traders have different requirements of Forex brokers, and thus there is no single best broker. This is how we compare brokers, and we offer insight into your choices. At the top of the article, there is a list of top brokers that we believe are the best broker for traders based on their reputation, platform, trading conditions and resources available to beginners.