Best Forex Brokers in South Africa 2020

Forex trading comes with some risk, but your choice of broker shouldn’t be part of that risk. As a South African trader, who should you turn to when looking for a broker? Check out our list for the very best brokers in South Africa.

The brokers below were evaluated on the quality of the trading platform they offered, the ease of use of each platform and the tools it provides. We also considered the commissions and other costs as well as their educational and customer service offerings.

The brokers below represent the best forex brokers for trading in South Africa.

Note: Not all Forex brokers accept US clients. For your convenience, we specified those that accept US Forex traders as clients

FP Markets

The broker offers the ability to trade on more than 10,000+ financial instruments covering Forex, Equities, Metals, Commodities, Indices and Cryptocurrency CFDs. Users have access to a range of accounts including the Standard Account (commission-free) and Raw Account (commission-based) for MetaTrader users, both offering ECN pricing and maximum leverage of 500:1. Users can also access Iress Accounts which are commission-based.

FP Markets also offers a range of education and market analysis resources through the Traders Hub which includes technical analysis and fundamental analysis articles and videos, as well as, trading ebooks and video tutorials. Users can access live support via telephone, email and live chat 24 hours a day, 5 days a week.

FXCM

FXCM Group is an international online forex and CFD brokerage brand. Founded on 1999, The company is based in the UK. The brokerage firm also maintains offices in several jurisdictions such as Australia and South Africa.

In terms of tradable products, FXCM offers trading in the spot forex markets, cryptocurrencies, Treasury bond (the bund) and Contract for Difference (CFDs) for market indices and commodities. Due to the new ESMA regulation, the maximum leverage offered by FXCM is now restricted to 1:30 for major currency pairs.

Plus500

Plus500 is a leading CFD trading platform with support for stocks, indices, cryptocurrencies, and Forex. This commission-free brokerage charges very low spread-rates and offers fast trades on a great platform. Plus500 supports complex trades, includes negative balance protection, and makes trading an educational and hopefully profitable venture.

You can start with a free demo account to test the platform and any trading strategy. Real money accounts offer leverage of up to 300:1. This broker is based in Israel and regulated by the Financial Conduct Authority (FCA) in the UK.

FXTM

FXTM, short for ForexTime, is a platform with a primary focus on foreign exchange. That specialization allows it to rise above many others when it comes to Forex focused trading platforms and tools. CFDs are available on 50+ currency pairs including major, minor, and exotic pairs. Leverage is available up to 1000:1.

Spreads are competitive across all platforms with 24-hour trading open 5 days per week. FXTM is based in Cyprus and licensed by the International Financial Services Commission (IFSC), Cyprus Securities and Exchange Commission, and other regulators in and out of the EU. A free demo account is available. 

FBS

FBS Markets Inc. is a Forex and CFD broker that offers its services across the globe. The company was established in 2009 and since then, the brand has grown in size, capacity and technology. It offers currency pairs, CFDs, stocks, metals and cryptocurrencies on MT4 and MT5 platforms.

FBS Markets offers 37 currency pairs, 4 metals, 3 CFDs, 4 cryptocurrencies and 32 stocks.

FBS provides the MT4 and MT5 trading platforms as WebTrader, desktop applications and mobile applications. For leverage accounts, this brokerage offers leverage of up to 3000:1.

OctaFX

OctaFX is a Forex and CFD trading platform with a focus on low, competitively priced spreads. It supports MT4, MT5, and cTrader trading platforms. cTrader offers the lowest costs, but does require a bit more experience. Novice traders are best starting off at OctaFX using MetaTrader 4, which supports micro accounts.

OctaFX supports 28 currency pairs, a smaller number than many competitors. You can get leverage up to 500:1 for currencies. Different leverage is available for metals, indices, and crypto trading. OctaFX was founded in 2011 and is based in and licensed in Saint Vincent and the Grenadines. 

eToro

eToro is an online trading platform that was founded in 2007 by the Assia siblings and their friend David Ring in Tel Aviv, Israel. Formerly known as RetailFX, eToro is the pioneering online broker for social trading. Their Openbook social trading platform in fact changed the nature of the way beginner online traders can trade the financial markets. It made the markets accessible to everyone, no matter what their level of experience by creating a user-friendly environment and allowing traders to copy the trades of other traders’ strategies automatically.

How to Choose a Forex Broker as a South African trader

The country of South Africa is one of the richest on the African continent. People make considerably higher salaries in comparison to other African countries. The economic environment in South Africa is quite liberal and you can easily invest in any financial market that is available, both local and global. As Forex is becoming more and more popular with traders there, you need to know what broker to choose before opening an account to trade.

One of the most important aspects to consider is whether the broker is regulated by FSB (local market regulator) or not. If not, do not even think of opening an account with the broker, as loose regulatory conditions bring not only advantages, but also hazards, that’s because lots of scammy brokers come to some countries to target your hard earned money.

Other aspects to consider would be to select a broker that offers a good, easy to use, user friendly and extra features rich platform. Commissions and spreads are also very important. You do not want to be charged hidden and extra fees when all reliable brokers will offer you tiny fixed or variable spreads. There should be a variety of types of accounts you can choose from. Generally speaking, the more the better. If the broker is not there for you to help, you should not be there with him putting money in his company. Customer service matters a lot. Finally, extra useful services are a big plus in deciding which broker to choose.

General Regulation & South African Regulation

Across the world the tendency is to introduce stricter requirements for both Forex brokers and traders. The 2008 crises caused a lot of FX brokers to go bankrupt and lots of traders to lose money because of price manipulation, inside trading, fraudulent practices and etc. Now, regulators frown upon non registered brokers and some even ban them or restrict them from offering services in their respective countries. In most places capital requirements for brokers are raised. The leverage offered to clients was also reduced significantly  in order to reduce risks. Margin requirements increased and unreliable  advertising which only stressed the profit size without disclosing potential risks was strictly prohibited almost everywhere around the world.

Now, in South Africa both Forex trading and the state of regulation of the market is still in its early stages of development. However, there is a regulator there which is the FSB – The Financial Services Board. The main task of the entity is to regulate all companies providing financial services in South Africa. The institution has strong powers to punish those brokers that fail to comply to other rules or even revoke their licenses. One of the key objectives of the regulator is to ensure that investors are offered fair and transparent services by certified brokers. So, if you choose one of the FSB approved brokers you will be able to trade with more confidence than if you traded with some shady unregulated operator.

Trading Platform & Software

One of the fun things and the comfort of doing business in Forex is that you can trade any Forex pair from the comfort of your home sitting in front of your pc and drinking your favorite drink. And you can do it at any time of the day you want. One thing you do need though is a good trading platform. This is your main tool of work and you can open a free demo account with any broker just to test their trading terminals to see if you feel comfortable with them and whether they have all the features you need.

A good trading platform will be easy to use, user friendly, offer you a lot of various charts with possibility to open a lot of windows on the same chart station and with a lot of time frames, from 1 minute to 1 month. You will also need your favorite indicators, ability to analyze charts and place notes on them, back test your strategy and etc. One of the best trading platforms for the time being is Metatrader. It has everything you need. So, you should see if your South Africa broker has it. Of course, if you prefer trading in a browser without downloading software most brokers will offer you that. But you need to check if they have all the tools you need for implementation of your trades.

Commisions & Spreads 

Unlike trading stocks where you will pay an amount for each trade, most brokers do not charge fees. So how do they make money you may ask? By offering you currency pairs with spreads. The spread is the difference between the buy and sell price. For example EUR/USD may trade 1.1706 (buy) and 1.1708 sell. When you open a trade you will have 2 pips of deficit. That would be your broker‘s fee for opening a trade for you. Spreads tend to be fixed and variable and sometimes fixed plus some extra fixed fee. Fixed spreads will in most cases be from 1-5 on major pairs that have US dollar: eur/usd, gbp/usd, usd/jpy, aud/usd, usd/chf, usd/cad and nzd/usd and crosses from 4-15. Those would be combinations of non dollar pairs, for example: eur/jpy, eur/aud, gbp/jpy, aud/cad and etc.

Variable spreads can be much lower with as little as 0.2 for majors and 2-5 pips for crosses. If market is not affected by some surprising piece of fundamental news you will trade those low spreads. When some surprising economic or financial news is released and markets start going up or down sharply spreads tend to increase sharply too. So, you can choose between these two types of spreads depending on what kind of trader you are.

Account Types

Account types generally depend on your capital size and sometimes on the turnover you make.

Micro

In this electronic age you can trade Forex with as little as 50$ on a micro account. Some companies can even allow you to trade with 1$ as they do not have lot size positions, but unit size positions. Well, these are very rare, but 100-200$ initial deposit accounts are offered with most brokers.

Mini

If you have over a thousand USD you can try a mini and trade mini lots and if you prefer bigger trade sizes like 100k (standard lot) you would need 10k or more capital to trade with.

VIP

Of course, you can go further still and get VIP account where huge positions are traded, but you need to always remember that trading is a risky business and you should not risk what you cannot afford to lose.

Customer Service

Trading is an international business, so you can expect a lot of foreign brokers offering there services in South Africa. It is obvious you need to expect excellent customer service in your own language or dialect from them. Those who care, they will go extra mile or two to make you their customer. Do not forget that they will also have to offer a great and speedy request, complaint, questions answering service generally running all working days 24 hours without stopping till weekend. If they fail to solve your problems in a timely manner, do not trade with them.

Additional Services

Like has been said, a good broker will walk extra mile to gain confidence of his clients. Most brokers will do so by offering a lot of extra services for their customers both on their websites and on their platforms. Large amount of those would be educational materials: videos, audio, articles, Ebooks and etc. They will hold free webinars and classes for newbies on every possible aspect of Forex trading. These things will definitely show that your broker cares about you.

Conclusion

You will always have time to trade Forex, so there is no need to rush to trade. You need to eliminate one problem first, find a good and reliable broker. You do that by checking whether he is regulated and what kind of services he offers in terms what hat been discussed in the article. If the broker you have looked at fits our description, it will probably be a good one. Of course, trading is always a risk and you should be ready to lose, but if you have done your homework success will come in your trading eventually.

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