Best Forex Demo Accounts In SA 2019

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Trading conditions:

FXTM

FXTM is regulated by the FCA, CySEC and the FSCA in South Africa and the educational material offered is first-class. By keeping the focus on beginners looking for reasonable trading conditions, the FXTM team of educators and analysts have succeeded in creating a welcoming environment for new traders. Additionally, FXTM are one of the few brokers with 24/7 support, allowing new traders to get set up on weekends or holidays.

For the absolute beginner, FXTM has a great deal of training material to help new traders get started. Materials include articles, videos, webinars and a searchable glossary of new vocabulary. This is an excellent resource and many hours can be spent covering the basics of Forex Trading. There is an additional set of videos that cover analysis topics, and more detail on chart reading techniques.

FXTM has an open “Daily Market Analysis” section on their website where research analysts post bulletins that connect daily news items with analysis and actionable trading ideas. This can be combined with other sources to achieve a more comprehensive view of global events and the trading opportunities they represent.

The Standard Account has a minimum deposit of 100 USD and spreads start at 1.3 pips. FXTM also offers a Cent Account where the minimum deposit if only 10 USD but the spreads will be wider. If you can afford it, I would recommend starting with the Standard Account.

Trading conditions:

AvaTrade

AvaTrade is regulated by the Central Bank of Ireland, ASIC, the FSCA and the Japanese Financial Services Agency. AvaTrade is long-established and has won numerous industry awards for its reliability and trading platform.

AvaTrade offers a comprehensive repository of educational material to get new traders started, as well as helpful tools and analysis to assist traders in finding the best opportunities. While customer support is 24/5, the same as most of their competitors, it is available in 14 languages and high-quality support is a top priority.

Alongside the educational library, AvaTrade offers traders a free educational and analysis website called Sharp Trader designed to include everything a trader needs for day to day trading. Traders can enjoy daily technical and fundamental analysis by AvaTrade’s experienced researchers and videos reviewing a wide range of topics for all levels of trading knowledge. The site also offers trading tools – including an economic calendar and trading calculators as well as access to AvaTrade’s trading platforms.

The minimum deposit for opening a regular account with AvaTrade is 100 USD and no withdrawal or deposit fees are charged for credit cards or online payment services.

Trading conditions:

FXCM South Africa

FXCM has been a global Forex and CFD broker since 1999 and are regulated by the FCA, ASIC, and the FSCA in South Africa.

One of the major advantages of FXCM for beginner traders is the quality of the educational material they offer. FXCM offers eBooks on Forex basics, trading strategies, trading habits, the FXCM’s proprietary Trading Station platform, and how to identify potential trading opportunities on the market. FXCM’s extensive video library is organised into different categories that span from how to make deposits, to more advanced trading topics like order types that help traders manage risk in trades.

Like most of their competitors, FXCM ZA uses webinars to teach Forex trading – these are exclusive webinars for South Africans and hosted by Russell Shor, the Senior Analyst for FXCM’s South African team. Having a dedicated education section for South Africans is extremely rare and is one of the greatest advantages to using FXCM ZA. Moreover, FXCM ZA runs free workshops in Pretoria and Johannesburg on a monthly basis.

FXCM has a standard demo account and a single live account offering. The demo account has 5000 USD virtual money and expires after 30 days of inactivity. The standard account is commission free with a minimum deposit of 50 USD

Trading conditions:

CM Trading

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.

Trading conditions:

XM

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.

Trading conditions:

HotForex

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.

Trading conditions:

eToro

Founded in 2007, eToro’s aim was to make global markets more open, so that anyone could trade and invest simply and transparently. eToro has won multiple awards for innovation, are pioneers in technology, and have successfully disrupted the traditional industry approach.

With a unique proprietary trading platform, eToro has succeeded in making trading more accessible to the beginner trader, but only by completely upending the traditional broker space.

The social component, which sits at the centre of the platform, seeks to inspire and encourage traders. eToro also believes that making its community of 6 million traders integral to the platform creates transparency and makes the overall experience more enjoyable. As cryptocurrencies have become more popular, eToro has introduced a wide variety of cryptocurrency CFDs to traders.

Trading conditions:

Tickmill

Tickmill offers very low spreads and commission, fast STP execution on the MT4 platform, and bears an excellent reputation in the CFD trading industry. Regulated by the FCA in the UK and CySEC in Europe, and a regular winner of trade execution and trading conditions awards, Tickmill has the reputation, and the performance traders should look for in a broker.

Trading conditions:

easyMarkets

Founded in 2001, easyMarkets (then easyForex) was one of the first online brokers. Regulated by ASIC since 2003 and CySEC since 2007, easyMarkets states their values as simple, honest and transparent which are reflected in their industry recognition - recently being awarded the Best Trading Platform and Most Transparent Broker awards in 2017 from FX Empire and Forex-Awards, respectively.

easyMarkets has always innovated, introducing tools like negative balance protection and guaranteed stop loss back in 2001 – these tools are now industry standards. Their innovation has continued with the unique Freeze Rate and dealCancellation tools, both intended to support new traders and keep trading transparent and simple. In 2018, easyMarkets won the Most Innovative Broker 2018 at the World Finance Markets Awards, a further sign that they are respected as innovators among their peers.

Trading conditions:

Plus500

Founded in 2008, and with over 300,000 active customers, Plus500 is a leading player in the CFD trading industry mainly due to the simplicity of their trading platform, and the appealing trading conditions.

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Why should I use a Demo Account?

There are significant risks in Forex (CFD) trading, and much of the risk is hard to manage – for a good breakdown of why CFD trading is so risky, check out our article. If you are concerned about making trading losses, or if you feel that you can make smarter trades, you should take note of the following: A tiny percentage of traders consistently predict the market and fewer still make significant returns, so starting with a risk-free account is a wise move.

This account type should be used as a stepping stone to trading in a live environment, so we compare brokers for demo accounts and live trading accounts using the same metrics. This is based on the assumption that if you are happy with your progress with a broker’s demo version you will graduate to the same broker’s live account. While we are comparing details of demo accounts only, the trading conditions for each broker is included in the list below.

In his 2018 paper, Recent developments in investment fraud and scams (pdf source), Professor Paul Barnes states: “That it is not possible for investors to consistently ‘beat the market’ unless they have inside information and frequent trading will result in losses“. He goes on to say that “it also means that at any point in time no one knows which way a price will move next as they don’t know what the next piece of news affecting prices and supply and demand will be” (pdf – page 12).

Professor Brad Barber from the University of California has also done extensive research on trader psychology and loss of funds. From the much-quoted work, The Cross-Section of Speculator Skill: Evidence from Day Trading (2004 rev. 2013 – source) he states that “in the average year, about 450,000 individuals engage in day trading. While about 20% earn profits net of fees in the typical year, the results of our analysis suggest that less than 1% of day traders can outperform consistently [sic] to predictably and reliably earn positive abnormal returns net of fees.”

Due to the profitability that comes from being a CFD/Forex broker, there has been a significant rise in the number of new brokerages between 2011 and 2015.  The FCA, the UK regulatory agency, concerned about the growing popularity of these complex products, issued a warning saying “the FCA’s analysis of a representative sample of client accounts for CFD firms found that 82% of clients lost money on these products” (source – FCA – 2016).

If you think that you may be one of the 82% of traders who will lose money on these products, you should open a demo first and apply the risk management that is available to you before you think of investing money.

How do Forex Demo Accounts work?

A demo account is a great way to take your first step in Forex trading as they function similarly to live accounts, regardless of which broker you choose – the main difference being that the broker will fund a demo account with virtual money.

It is common for traders to use MetaTrader4. If this is your first time installing the software and setting up, we have a guide to help you, and if you are looking for an MT4 broker, we have put together our favourites here.

Some demos expire after some time unless you open a regular account, though in these cases when you open a live account the demo will continue functioning. We recommend keeping your demo account open, as it can be very useful for testing new strategies and tools before trying them out in live trading.

How long do Demo Accounts Stay Open?

They stay open for different lengths of time depending on the broker but generally vary in length from 7 days to Unlimited. Below you’ll find a breakdown of how long our recommended brokers keep them open for.

How long do Forex Demo Accounts Stay Open?

Are these Accounts Accurate?

Generally, they use real-time market data, so the only way that they are not accurate is that the gains and losses of your trades are not real. You are not making money as it is all virtual money.

The other major difference is more abstract; trading in a live environment is always accompanied by a psychological fear of loss and this causes alterations in behaviour, often in subtle ways. You will not feel this fear, or certainly not to the same extent, with a demo account – so be prepared for the move into a live environment to feel different, even though the platform is the same. It is also worth examining how this fear impacts your decision-making; by being aware of it you are better placed to remove its influence from your trading.

Recommended Reading

If you are new to trading and don’t know how forex trading works, it is wise to start your reading here, and then move off to learning to trade Forex, and how to open a trading account. There is a significant risk associated with trading CFDs, and thus an excellent way to start your trading career and perfect new trading strategies is a risk-free way.

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Trading Forex and CFDs is not suitable for all investors and comes with a high risk of losing money rapidly due to leverage. 75-90% of retail investors lose money trading these products. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.