The forex trading is very popular in US or UK because these religions are its birthplace; however, it is another story in South Africa. Even nowadays, there are a lot of forex brokers operating in these countries, it is still not easy for traders to find out which are the best brokers. This article will explore criteria to evaluate and filter among hundreds of brokers through our research on 30+ top forex brokers in South Africa since 2013.
FOREX BROKER REGULATION
Can you trust a forex broker? This is the first question I want to ask all of the traders in South Africa because in order to get the trust of customers, brokers must demand standards which are not easy or simple. So what is based on to prove whether brokers are reliable or not? The answer is regulation. It is simple for traders to understand that regulation is a kind of “protection card” in case of arguments or debates between traders and brokers. As a result, traders must choose brokers who have trusted regulations.
The question here is how trusted regulations are? They are licenses of authorized organizations with big voices so that they have the power to guarantee your benefits. In South Africa, FCA, FSCA, CySEC & ASIC are the most reputed licenses for the best forex brokers 2018. A broker with one or two of them is enough for your trading safety. Regulation is also the reflection of a broker’s reputation; therefore if a broker who does not invest in this, it is not worthy to be considered.
FOREX BROKER TRADING CONDITIONS
The trading conditions include a large of items such as minimum deposit, commission, etc. but I will concentrate on spread and leverage in this article because traders can rely on these to choose the best brokers.
Generally, brokers have different spreads, but traders tend to prefer brokers the tight average distance on the pairs they trade. The pairs here mean currency pairs such as EUR/USD, USD/JPY, etc. because the spread is the difference between the selling price and the buying price. Besides spreads, leverage is the element to pay attention to. It is an amplifier which traders can amplify their account up to times from small amount in their accounts. This is presented in a format like 100:1, 300:1, or 400:1. For example, if you have only $4000 in the account, you can trade up to 400 times of that amount ($400,000). It seems to be an ideal number for all traders.
FOREX BROKER ACCOUNT TYPES
Traders now might be confused among types of accounts in the forex trading, especially beginners. There are many accounts, but here I just give two main ones which all brokers have are Live/Real accounts and Demo accounts.
For Live/Real accounts, they are created for experienced traders or experts, these are real trade, so all what traders do with this account will be influent on their balance. This kind of account is for experts, they must be professional on it. Therefore, I will focus on a Demo account – the type is for beginners or new traders. You can open a demo account for free and have valuable experience before doing real transactions with higher accounts. You get no risks when using this account because the funds are fake, and there is no effect in the case of transactions.
In conclusion, traders in South Africa can choose the best brokers in their countries by referring to the standards: regulation or reputation, trading conditions, and account types of brokers.
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