South African Forex traders have plenty of choice. While the South African Financial Sector Conduct Authority (FSCA) regulates many, the most competitive offers come from international brokers. After reading our detailed research here on South African Forex brokers, you should have no problem finding the best broker for you.
South Africa is the most developed and industrialized country in Africa, the continent's only G-20 member, and often considered the voice for many frontier African markets. It is also home to the second-largest African economy, trailing only Nigeria as measured by GDP. Forex trading is gaining in popularity, partially driven by the economic potential and tech-savvy young population. South Africa is also home to one of the most respected regulators in Africa, the Financial Sector Conduct Authority (FSCA).
The best South African Forex brokers operate under the regulatory oversight of the FSCA, which is responsible for all non-banking financial services since April 2018. Before that, since 1990, the Financial Services Board (FSB) supervised the non-banking financial sector, including South African Forex Brokers. While dealing with a domestic Forex broker offers advantages, there are not many operational in South Africa. Well-established international ones fill the void, and a growing number seek an operating license from the FSCA, in a nod to the growth potential for Forex trading in South Africa.
The Forex market continues to enjoy tremendous growth, nearing $7 trillion in daily turnover, and remaining the most liquid financial market globally. Part of its popularity is the low capital requirement as well as general accessibility of it. Since South Africa is an emerging economy, also applicable to the Forex market, the interest in it is, regrettably, often met with scams, fraud, and mismarketing. It remains essential that new traders take their time to educate themselves properly before rushing to make a deposit.
Since there is no legal requirement for South African Forex traders to trade with Forex brokers in South Africa, there are many options to consider. This article will introduce the five best South African Forex brokers, and also highlight the core items each Forex trader must take into consideration when looking at the different types of brokers available. While we will examine trading features, trading platforms, account options, and the pricing environment, new traders need to determine what kind they want to be, to find the best South African Forex broker for their trading style.
Forex Regulations in South Africa
The Financial Sector Conduct Authority (FSCA), which replaced the Financial Services Board (FSB) on 1st April 2018 as the primary Forex regulator in South Africa, regulates the Forex market in South Africa, together with all non-banking financial services. All Forex brokers operating from within South Africa must obtain a license, while international brokers catering to South African traders remain regulated in their respective jurisdictions. Each trader needs to assess the importance of trading with a domestically regulated broker, where the trust level may not be on par with global competitors, or with a reputable international one.
One primary benefit of a domestic Forex broker is the ability to act in cases of misconduct or fraud. With that in mind, the objective of selecting a broker is to avoid questionable outlets, rendering the swifter dispute resolutions almost irrelevant. South African Forex traders will likely have more pleasant trading experiences with a well-regulated international broker than with an FSCA-regulated option. A growing number of international brokers, like AvaTrade, open regional offices in South Africa and obtain an FSCA license, offering local traders the best possible scenario.
The Financial Services Board (FSB), the predecessor of the Financial Sector Conduct Authority (FSCA), was established based on the recommendations by the Van der Horst Committee in 1990. The regulator was initially responsible for the non-banking sector, but the 2004 Financial Advisory and Intermediary Services Act (FAIS) expanded the FSB reach into the banking sector. Combating money laundering was added to its task via the 2001 Financial Intelligence Centre Act. The FSB ensured that regulated entities comply with all applicable laws and regulations, together with capital requirements, to promote financial stability and to protect the investment community of South Africa.
Via the enforcement committee, the FSB could impose fines and other unlimited penalties, which were applicable on par with rulings from the Supreme Court of South Africa. It allowed the regulator to ensure all entities obliged with rules and regulations, and those in violation were unable to escape penalties and fines. It made the FSB one of the most trusted regulators in Africa. It was also a member of the International Organization of Securities Commissions (IOSCO) and the Southern African Development Community (SADC), particularly with the Committee of Insurance, Securities, And Non-Banking Financial Authorities (CISNA).
Despite its well-organized structure, the FSB failed to identify and prevent a series of scandals in the South African pension sector. Accusations of favoritism and excessive fees for legal and administrative expenses further tarnished its reputation. In August 2017, the Financial Sector Regulation Act (FSR Act) became law. From April 2018, the Prudential Authority (PA) assumed the responsibilities of the FSB regarding all non-banking financial institution prudential supervision, while the Financial Sector Conduct Authority (FSCA) became responsible for market conduct.
Here is an overview of some essential FSCA tasks for South African Forex traders:
- Compliance of Forex brokers with all local laws and regulations.
- Sufficient capital of South African Forex brokers to ensure financial stability.
- Educating traders with quality content sourced from industry professionals.
- Protecting traders in the event of fraud or malpractice by Forex brokers.
- Ensuring the financial stability of all traders should their Forex broker default financially.
- Updating South African Forex broker with legal and regulatory changes.
- Promoting the development and trustworthiness of the financial market in South Africa.
South African regulated Forex brokers will provide a license number, usually a five-digit number located at the bottom of the homepage. Forex traders should always double-check any claim of regulation, with any regulator by all brokers, with the respective regulatory body. Just take the given license number, go to the regulator's website, and use the search function to confirm the license with the database. Should you be unable to locate the broker, it is best to avoid it and report it to the regulator in charge.
Since South Africa is considered an emerging Forex market with tremendous growth potential, there are many fraudulent actors across the sector. South African Forex traders need to understand that regulation alone does not ensure safety and security. The FSCA is not the most effective regulator, but well-positioned to secure the domestic market. In many cases, FSCA-regulated Forex brokers offer a less competitive trading environment, which is more expensive, as the eXcentral example confirms. Remember, there is no law preventing South Africans from trading Forex with an international broker.
Tips to avoid falling for a Forex scam or fraud:
- Avoid unregulated Forex brokers, as there -is no reason for a reputable broker to avoid any regulation. One exception may be St. Vincent and the Grenadines, where the financial regulator, the Financial Services Authority (FSA), is responsible for the registration of international business companies (IBCs). It does not regulate Forex brokers, as the law presently does not require it. Just make sure a St. Vincent and the Grenadines broker states registered with the FSA and not regulated by it.
- Double-check all claims of regulation with the authorizing regulator, avoid and report those who make false statements.
- Never engage with a Forex broker who contacts you cold, as it is most likely a scam attempt. Reputable brokers do not cold-call and seek new clients.
- Make sure to read the terms and conditions before you open an account. Many traders falsely claim a Forex broker committed fraud when they violated the rules set out in the agreement. It is especially the case with bonuses and promotions.
- Never be afraid to contact customer support and ask questions. All trustworthy brokers have a team in place to answer all your questions patiently.
How to Choose a Forex Broker in South Africa?
Since there is no legal restriction on where South African traders can trade, the choice is overwhelming. With over 1,200 MT4 Forex brokers worldwide, and several hundred more MT5 and cTrader alternatives, together with a growing number of proprietary trading platforms, and new solutions by FinTech companies, it is challenging to find legit Forex brokers approved for Forex Trading South Africa. With choices beyond South African Forex brokers, traders must consider an identical set of core trading conditions, which will have a direct impact on their trading strategy and long-term profitability.
The importance of regulation remains on top of the list, followed by reputation. Traders should avoid most reviews, as many are fake ones paid by competitors or by traders who failed to read the terms and conditions of bonuses. There are well-established Forex brokers with a long operating history and a clean regulatory track record. While some brokers who faced fines for misconduct attempt to regain the lost trust, a safer choice would be to select Forex brokers who have a history of acting in the best interest of their traders. FXTM, AvaTrade, AxiTrader, and XM are excellent examples of trustworthy CFD and Forex brokers.
Another critical factor to consider is the pricing environment. Many new traders ignore the significant long-term negative impact an expensive cost structure can have. Forex brokers are quick to point out execution speed, which is less relevant than the cost of trading, slippage, requotes, and liquidity. Reputable Forex brokers publish trading and execution statistics, verified by independent auditors. FXTM is a prime example of this. Asset selection is equally important, especially for more advanced traders. As portfolios increase in size, adequate diversification opportunities must be present, with AvaTrade and XM offering an outstanding choice.
While almost every Forex broker offers the MT4 trading platform and markets it as a cutting-edge version, the out-of-the-box version, as presented by most, is far from it. South African Forex traders should aim to trade with one of the trading companies in South Africa that offer MT4/MT5 upgrades, like FXTM or XM, or an excellent proprietary alternative, where AvaTrade and eXcentral come to mind. New traders should ensure an in-depth educational section is available, as is the case with all five from our top Forex brokers list. Additional services like VPS hosting, research, or other trading tools improve the overall trading environment. AxiTrader offers a superb value-added service with PsyQuation.
Deposit and withdrawals in the South African Rand are beneficial for South African Forex traders, as available at FXTM. Going one step farther is XM, which provides traders the option to have the base currency in South African Rand. It allows South African Forex traders to make deposits in their local currency. One key fact to keep in mind is that each trade will face a currency conversion cost unless the South African Rand is the base currency of the asset, which is hardly the case. A more cost-effective long-term solution is to select a US Dollar account to avoid a series of micro-costs that can add up to an unacceptable burden, especially for long-term traders.
Finally, the minimum deposit should be considered, together with the maximum leverage. Leverage is one of the most misunderstood trading tools and often associated with higher risk. Even some regulators subscribe to this misleading notion. The absence of risk management is to blame for losses, while higher leverage reduced the distance you can be wrong in a trade before you should close it at a loss. It is a small but significant difference. FXTM, eXcentral, AxiTrader, and XM offer excellent choices when it comes to leverage. The smaller the minimum deposit, the more efficient the execution of a suitable portfolio building strategy, which is a cornerstone for successful Forex traders, but often ignored. AxiTrader has no minimum deposit, while XM and FXTM offer accounts from as little as $5 and $10, respectively.
Forex Brokers' Fees
The trading fees will have the most significant and immediately visible impact on your portfolio. There are two types of costs, direct and indirect. You will face the former with each trade you place, while the latter applies in certain circumstances. Spreads, commissions, and rollover fees (swap rates) are direct costs, and deposit/withdrawal fees, currency conversion costs, and inactivity charges are indirect costs. The higher the pricing environment, especially the direct one, the more expensive and less profitable the trading environment over the long-term. South African Forex brokers offer a wide range of choices, and traders should compare the broker fees carefully, and not immediately subscribe to brokers because they are popular with others.
A spread refers to the difference between the bid and the ask prices and is the most dominant trading cost at market makers. Forex brokers are free to add any mark-up they wish on the raw spread, which is usually between 0 and 0.01 pips for liquid currency pairs. Anything above that is what the broker charges, which represents a primary revenue stream. The bid price, the selling price, is always below the ask price, the buying price. Therefore, when you enter a trade, without any additional price movement, you will always begin with a floating loss. 1 pip in a standard trading account, where the 1.0 lot equals 100,000 currency units, is equal to $10 if the base account currency is in U.S. Dollars and the quote currency, the second one in a currency pair, is the U.S. Dollar. Using this as a reference, traders can compare how high spreads will impact their trading strategy. When it comes to commission-free costs, AxiTrader and XM have the best offer for South African Forex traders, with a minimum of 0.4 pips and 0.6 pips, respectively.
Commission usually applies to ECN (electronic communications network) accounts, where traders have access to raw liquidity used by banks and other financial institutions. To compensate for the absence of mark-ups on the spread, a commission applies. In many cases, the ECN trading environment is more cost-effective, especially for high-frequency traders. The higher the monthly trading volume, the lower the overall fee structure. Some brokers, like FXTM, also consider the portfolio size. Commissions apply when you open and close a trade, but some brokers deduct both when you open your position. When a broker quotes the commission, a round lot refers to opening and closing, so make sure you read the description carefully to avoid confusion. Equity CFDs, direct market share dealing, and ETFs also incur a commission charge, usually displayed as a percentage of the deal value, where Forex trading is a currency amount per lot.
From our top Forex brokers list, FXTM and AxiTrader offer a raw spread of 0.0 pips. While the minimum commission at FXTM can be just $0.80 per round lot, the average for most traders is closer to $5.00, which is one of the most competitive offers Available. AxiTrader charges a commission of $7.00 per round lot. XM offers equity CFDs from as low as $1.00, representing an excellent pricing environment for equity traders. AvaTrade and eXcentral do not charge a commission for equity CFDs, but have significantly higher spreads, making the overall trade more expensive. FXTM offers a cash-back loyalty program, reducing the final costs further, while XM also deploys a loyalty program.
Rollover Rate (Swap Fees)
- fees or swap rates apply to leveraged overnight positions. They are an interest payment for the money borrowed from a broker to open a trade, and as long as it remains open, a daily fee applies. Most swap rates are negative, meaning the trader pays the broker, but there are sometimes positive ones, where the broker has to pay the trader. Trustworthy brokers pass on any earnings to traders. Since the Forex market is closed on Saturdays and Sundays, each Wednesday, the applicable cost is tripled. Transparent brokers will explain how they calculate the daily rollover fee and offer examples. Presently, it usually consists of a benchmark interest banks charge each other for overnight lending plus any mark-up the broker adds. The charge needs to be multiplied by the borrowed amount and divided by 365 days to derive at the daily cost. Swap rates are not constant, but traders can see the daily and weekly rollover fees in the trading tickets of proprietary trading platforms, and it can always be found in MetaTrader platforms also.
MT4/MT5 traders can easily access swap rates from their platform by following these steps:
1. Right-click on the desired symbol in the Market Watch window and select Symbols.
2. Select the desired currency and then click on Properties located on the right side.
3. Scroll down until you see Swap Long and Swap Short.
Deposit/ Withdrawal Fees
Most brokers waive deposit fees, but third-party costs from the selected payment processor may apply. Some brokers, like FXTM and eXcentral, levy an internal withdrawal fee on top of third-party charges, while AvaTrade, AxiTrader, and XM, do not. All Forex brokers in South Africa maintain a dedicated page on their website, where all costs are listed. They differ depending on the payment method, with bank wires the costliest at an average of $20, which also takes the longest with up to ten business days in some cases. Credit/debit cards may face a percentage cost with a minimum fee calculated from the total deposit/withdrawal amount. The most efficient and cost-effective methods are e-wallets, but the cost structure can differ from country to country, with Skrill one of the most popular yet expensive ones. All South African traders need to evaluate the most suitable solution for them. One way to reduce overall cost is to avoid frequent small withdrawals where possible. FXTM supports 47 deposit/withdrawal methods, with XM and AxiTrader coming in at 9 and 8, respectively. Not all options are available to all traders, restricted by geographical location.
Transaction Costs (Currency Conversion)
Currency conversion costs can apply each time a deposit or withdrawal is made into or from the trading account in a different currency than the account base currency. For example, if you have a U.S. Dollar account and withdraw funds into a South African Rand bank account, brokers may charge a currency conversion charge. It also applies if you trade a non-U.S. Dollar based asset, like the EUR/GBP, the AUD/JPY, or the CAD/CHF. Some brokers conduct currency conversions at the Forex spot rates, without levying additional fees, while some add between 50 pips and 400 pips, depending on the currency. A broker’s terms and conditions will reveal any fee applicable to currency conversions, and South African Forex traders should avoid brokers that add costs to the spot rate. For most retail traders, it will be more cost-effective to trade from a U.S. Dollar account and select a Forex broker that supports deposits and withdrawals in their local currency. FXTM and XM offer South African Rand transactions. XM also grants South African Rand trading accounts, but traders should avoid them due to currency conversions with each trade.
While most traders will not face an inactivity fee, knowing whether one applies will give greater insight into how the Forex broker management team approaches the cost structure. AxiTrader does not charge one, giving full control to Forex traders without pressure to trade. XM has a small $5 monthly fee, and FXTM has one but does not advertise it. AvaTrade charges $50 per quarter, while eXcentral maintains a relatively high $80 per month.
Minimum Deposit Required for Trading with South African Forex Brokers
One of the most overlooked aspects of portfolio management is the minimum deposit. Most retail traders only focus on the initial deposit, believing it is enough just to earn consistent income from Forex trading. In most cases, this results in a total loss. Successful Forex traders understand the importance of building a sizeable portfolio to support income generation. This process takes years, patience, and consistency. Forex traders should approach the market with the same mindset as with a retirement account. Monthly deposits are essential for all South African Forex traders who seek to implement a long-term profitable trading strategy.
A low minimum deposit remains one of the most beneficial tools any of the best South African Forex brokers can offer traders. Most new traders will likely make a more substantial initial deposit, but smaller monthly additional ones can be part of any successful Forex trading strategy, even if they appear minimal. The trading power of compounding deposits over a prolonged period will often separate successful Forex traders from blown accounts. AxiTrader has no minimum deposit requirements, XM comes in second with $5, followed by FXTM with $10. All three are excellent choices in this category. AvaTrade requires $100, while eXcentral commands an excessive $250, which does not allow for the implementation of a proper monthly deposit plan.
Trading Execution Speed & Methods
Scalpers and traders with a preference for automated trading solutions require fast execution speeds. All other strategies also equally benefit from it, as it reduces or eliminates requotes and slippage. While Forex South Africa remains in rapid development, market-leading international Forex brokers invest heavily in their trading infrastructure to maintain a competitive edge. With today's technology, there is no excuse for any broker to not providing a high-speed trading execution environment, which should result in limited to no requotes, slippage, and at the technologically most advanced brokers in positive slippage. FXTM has one of the most competitive and confirmed execution statistics, while AxiTrader also grants South African Forex traders an excellent environment together with XM.
Brokers deploy two main execution methods, the market maker model, and the ECN (electronic communication network) model. A market maker may use STP (straight-through processing) and NDD (no dealing desk), which are essentially the same, one referring to a fully automatic process and the other to a manual one. Market makers have earned a bad reputation for trading against clients and hunting stop losses. South African Forex traders who do not wish to pay a commission for raw spreads with an ECN broker, should ideally locate a market maker that deploys STP/NDD execution. A growing number of CFD and Forex brokers deploy a hybrid market maker/ECN model, like FXTM, to cater to a more inclusive audience of traders and strategies.
Just as most market makers have a tarnished reputation because of a few bad actors, not all ECN brokers offer open access to liquidity makers. International brokers who have several operating subsidiaries in different regulatory jurisdictions can offer ECN, but source the traded within their various entities, reflecting a modified market maker model with the ECN pricing structure. CySEC fined several well-known brokers under its oversight for this practice, which is why traders should check the regulatory track record of each broker, and not just rely on the regulation itself. FXTM, AvaTrade, AxiTrader, and XM all have a clean regulatory record. Therefore, traders can trust them with their execution model.
A brief overview of Forex execution models:
- Market Maker (MM) - The broker takes positions against the trader and profits directly from losses of clients. For example, if you buy 1 lot in the EUR/USD, your broker will be the counterparty to your trade, selling 1 lot in the spot market. Many market makers never route client orders to the market and keep them in-house. Since almost 80% of retail traders lose money, the model generates consistent profits for the broker to pay the remaining 20%. Traditional market makers also engage in what is known as stop-loss hunting. Since they are free to apply any mark-up on raw spreads, when a bulk of client orders are close to a stop loss level, they briefly widen the currency spread to trigger the stop loss, profit at the expense of traders and narrow it again. A fixed spread account will eliminate this risk.
- Straight-Through Processing (STP) - This refers to a market maker using a fully autonomous order management system that processes all transactions in the Forex market. There are no interventions or manipulations to price action. It ensures a more robust execution model and fairer access to the market.
- No Dealing Desk (NDD) - The same as STP but as a manual process. An NDD model means there is no human team in place to source and manipulate the order book.
- Electronic Communication Network (ECN) - A genuine ECN broker grants traders unrestricted access to the interbank market, sources prices from a series of the biggest liquidity providers, providing access to honest prices and raw spreads as low as 0 pips. For this, a commission applies, but despite the additional cost, the overall cost structure can remain superior. High-frequency traders, scalpers, and autonomous trading solutions benefit the most from the ECN model, but all traders should make it their primary choice. There are several market makers or hybrid brokers like FXTM, AxiTrader, and XM, where pricing and order execution offers South African Forex traders a competitive edge.
The trading conditions of brokers must be carefully evaluated and should consist of the core services like cost structure, the execution model, the asset selection, and the trading platforms. Not all Forex brokers provide the same trading conditions, but with over 1,500 brokers to choose from, there is the right choice for any trader and strategy. The first step a trader needs to complete is to identify the type of trader they want to be, create a list of essential trading conditions necessary for the execution of their strategy, and then narrow down the list of suitable brokers. FXTM is an excellent all-around broker, AxiTrader offers an edge to Forex traders, XM is an outstanding choice for equity traders, and AvaTrade presents social traders an alternative to consider. Regardless of the trading strategy, leverage remains one of the most important trading tools to consider.
Leverage is one of the most efficient and misunderstood trading tools available. Most confuse it with high risk, which is wrong. Proper risk management protocols, or the lack thereof, impact the risk of the portfolio. For example, if you opt for a 3% risk per trade, it does not matter how high your leverage is. You will lose no more than 3% unless you fail to execute your risk management profile. High-leverage trades will influence the amount you can be wrong until you have to exit your position at a 3% loss. The higher the account leverage, the faster it will force you to close the trade at a loss if you are on the wrong side of it. Therefore, new traders should manage portfolios with lower leverage.
Another factor dependent on leverage is the capital you have to deploy as committed margin to open a trade. There is an inverse relationship between capital and leverage, so the higher leverage is, the lower the capital requirement. Leverage will allow you to take on more positions, adding risk with each one. Again, a genuine risk management profile will handle this. Consequently, if you implement a strategy where you deploy 20% of your portfolio with a risk of 2% per position, you can take a maximum of ten trades. It does not matter how high your leverage is. You will lose a maximum of 20%. Once you understand this concept, you can start to learn how to use and manage high-leveraged accounts. Until you have a trading strategy you can trust, use lower leverage.
Another misunderstood concept is the selected account leverage and deployed leverage. Just because your account leverage setting states 1:2000 does not mean that your portfolio will necessarily be leveraged by that much. It depends on the trades you take, the position sizing you use, how much equity you have, how much your margin requirements for open trades are, and your free margin. The real leverage is generally significantly lower for most traders than the maximum offered. FXTM and XM offer the most generous advertised maximum leverage at 1:2000 and 1:888, respectively. AxiTrader and eXcentral remain very competitive at 1:500 and 1:400, while AvaTrade remains uncompetitive at 1:30 for retail traders, due to regulatory restrictions under ESMA, which is forcing many traders offshore.
Trading from the correct account type will also impact the effectiveness of your trading strategy. While some brokers offer numerous alternatives, there are three distinctively different ones to consider, as outlined below.
A micro account is ideal for new traders to learn how to trade in a live trading environment or for the testing of new trading strategies and automated trading solutions. The minimum deposit requirement is often as low as $1, but South African Forex traders should consider a portfolio no less than $100. 1 lot is equal to just 1,000 currency units, granting flexibility to any trading approach while offering an invaluable educational platform. FXTM and XM both offer micro account options.
This is generally where the best South African Forex brokers offer all available products and services. Until traders have at least $10,000 set aside to fund a portfolio, they should trade in micro and mini alternatives. 1 lot in a standard account represents 100,000 currency units, versus 10,000 in a mini one. Therefore, each 1 pip move is worth $10 if traded from a U.S. Dollar base currency account and in a currency pair where the U.S. Dollar is the quote currency, which is the second currency, for example in the EUR/USD, GBP/USD, AUD/USD, etc. The minimum lot size should be 0.01 lots, making each pip worth $0.10. Low equity portfolios can quickly drop to zero, so be patient before upgrading.
South African Forex brokers reserve improved trading conditions for high-volume traders or those with more significant deposits, often anywhere above $50,000 and $250,000. Legit Forex brokers will automatically upgrade portfolios once traders satisfy given thresholds. Additional perks may include non-trading related benefits, like invites to sports events, galas, and other VIP-only activities.
Account Base Currency and Currency Coverage
The account base currency is the one in which your broker converts all profits and losses. For example, if you trade the EUR/GBP, your P/L will show in U.S. Dollars, or if you deposit South African Rand, your broker will exchange them into U.S. Dollars. For Forex traders, U.S. Dollar accounts remain the most used ones, as it limits currency conversions. While some brokers do not charge an additional cost, each trade will be exposed to currency fluctuations. Some brokers charge for each conversion, so make sure to read the terms and conditions. The fewer currency conversions, the cheaper and more efficient your Forex portfolio will be. An account in South African Rand, as offered by XM, may sound appealing, but it is not practical, as it will face daily currency conversions, currency fluctuations, and additional costs.
Trading Apps and Trading Platforms
The most common trading platforms are MT4, MT5, and cTrader, available as a desktop client, webtrader, and mobile app. Some brokers develop proprietary trading apps like FXTM and AvaTrade. MT4 remains the most flexible one, due to over 20,000 third-party add-ons. The infrastructure is outstanding, and an upgraded MT4 will offer the majority of traders a superior trading experience. Regrettably, most Forex brokers only support the out-of-the-box version without any of the necessary upgrades. When evaluating a broker, make sure they either invested in a proprietary trading platform superior to MT4 or they provide add-ons and upgrades to it. FXTM, AvaTrade, eXcentral, and XM all offer valuable additions for Forex traders to consider.
Any trading platform needs to be highly responsive, especially since the Forex market experiences rapid price movements at times. The best trading companies in South Africa invest in their technology infrastructure to ensure superior execution speed, which avoids negative slippage and requotes.
Reliability goes hand-in-hand with responsiveness. MT4 is one of the most reliable platforms, adding to its attractiveness. It is best to test proprietary trading platforms with a small deposit in a live trading environment to assess the reliability properly. Doing so in a demo account will not deliver the intended results.
Active traders need a user-friendly interface as they will invest considerable time in front of their trading terminal. A clean, responsive UI will also improve the efficiency of traders, conserve time, and improve trading results. It is the most significant weakness of the MT4 trading platform, only addressed with paid-for upgrades.
Automated trading is where MT4 shines, and cTrader offers a genuine alternative. Many proprietary trading solutions do not support automated trading, the fastest growing trend across the Forex market. It allows traders to access more assets effectively, diversify portfolios, and take advantage of more trading opportunities.
Manual traders will require adequate analysis tools to conduct a technical and fundamental analysis of assets. The basics include over 30 technical indicators and drawing tools, and a live news feed. MT4 and cTrader provide both and are upgradable via add-ons. More advanced traders may wish to subscribe to third-party providers to broaden their information flow. The more informed you are, the more effective as a trader you can become. Without analysis tools, you are in the dark and are gambling on price action, rather than trading it.
RSI stands for Relative Strength Index, a staple for each trader, and one primary example of a technical analysis tool. It offers traders a quick overview of overbought/oversold conditions with a reading above/below 70/30, and also provides one of the most-used trading signals in positive/negative divergences.
While easy access to customer support remains essential, well-managed brokers explain all aspects of their products and services on their website, feature an FAQ section, and provide examples. The most convenient method to engage with a representative is via live chat or e-mail, usually available at all legit Forex brokers. Customer support must be responsive, knowledgeable, patient, and friendly. Feel free to contact any broker before opening an account and engage with them to test their customer support.
Additional Aspects to Consider
Besides the core trading environment, as discussed so far, there are additional aspects to consider, which are specific to the individual trader. It all goes back to determining what type of trader you want to be, what you need, and then narrow down the list of choices.
Brokers for Beginners
New traders should consider Forex brokers with an excellent educational section, which should be the first point of focus before thinking about trading in a live account. One-on-one training sessions and webinars can offer tremendous value. XM, FXTM, and eXcentral provide in-depth educational material for new South African Forex traders to consider.
Demo trading is a controversial topic. Many hail it for educational purposes, which are better achieved in a micro account as offered by FXTM and XM. Almost all brokers offer demo accounts, some are time-limited, others are unlimited, but new traders should consider trading in a live one with a small deposit. Demo accounts are ideal for automated traders to test new solutions and for bug fixing but possess limited and often counter-productive educational value.
Managed accounts may offer a solution for traders with capital but no time to learn how to trade and to trade. MT4 Forex brokers offer multi-account management (MAM) platforms with the percentage allocation management module (PAMM), the most widely used retail account management option. Minimum deposits apply, together with an account management fee and performance-based compensation. More solutions exist, and FinTech companies develop more effective models, but adoption, for now, remains slow. FXTM and XM provide traders with managed accounts.
Swap-free (Islamic) Accounts
Islamic accounts exist in compliance with Sharia law, and brokers do not credit/debit interest for leveraged overnight positions. Brokers compensate for the absence of swap rate with higher minimum deposits, together with lower leverage and higher spreads. Make sure to read the terms and conditions carefully where a swap-free account is offered. AvaTrade, AxiTrader, and XM offer Islamic accounts.
Our Rating Methodology
We reviewed over 100 brokers based on eleven criteria. Over 100 brokers were reviewed in-depth and from a trader’s perspective, ignoring the marketing tactics deployed by some to confuse retail traders. We sourced the list of our Top Five South African Forex Brokers from more than 200,000 words of dedicated research compiled over 1,000 hours, ensuring the most comprehensive approach to identify the best South African Forex brokers.
South African Forex traders have plenty of choice. While the FSCA regulates many, the most competitive offer exists from international brokers. There are a growing number who seek an FSCA license to add to their appeal for South African Forex traders, offering the best option. FSCA oversight, despite its oft-noted advantages, is not a necessity if you trade with a globally trusted Forex broker. The most defining first step is to determine the type of trader you want to be, and the look for the required tools from different brokers.
FXTM offers the best all-round option from our Top Five list, and the best choice for high-frequency traders and those with small deposits seeking to deploy a portfolio-building strategy. AxiTrader grants the best commission-free cost structure, closely followed by XM. The former has the best trader improvement technology, while the latter is an excellent choice for equity traders. AvaTrade maintains the widest trading platform choice and is outstanding for mobile traders. It also allows for a great asset selection. eXcentral shines with its educational section, but generally lags on all other aspects, especially compared to its international competition.
Which broker is the best for Forex in South Africa?
There is not one broker that suits all traders. Among the best Forex brokers in South Africa are FXTM, AvaTrade, eXcentral, AxiTrader, and XM.
What is the best South African Forex broker for beginners?
The best educational tools exist at FXTM, AvaTrade, and eXcentral. XM offers a genuine educational section as well, while AxiTrader features PsyQuation, an invaluable tool for new traders to consider.
Is Forex trading legal in South Africa?
Yes, Forex trading is legal in South Africa, and there are no restrictions on South African Forex traders opening accounts with international Forex brokers.
How much money do you need to start trading Forex in South Africa?
It depends on individual goals and expectations. New traders should aim to deposit no less than $100 to open a micro account, $1,000 for a mini alternative, or $10,000 for a standard version. After the initial deposit, traders should follow-through with smaller monthly ones until the portfolio reaches the necessary size to deliver the desired trading results realistically.