South Africa, a nation on the southern tip of Africa, is on its way to becoming one of the major hubs for global Forex trading. Throughout the years, South Africa has built up an expansive and rigid infrastructure to enable the Forex industry to prosper in the country, with South African Forex brokers offering the highest quality service, on par with their European and American counterparts. Meanwhile, the industry as a whole offers unparalleled fraud protection, when compared to anywhere else in Africa. Throughout the years, we have witnessed more and more people becoming involved in Forex trading in South Africa, with a handful of these fortune seekers striking gold and accumulating significant wealth by trading Forex, be it through extensive use of skills accumulated throughout the years, taking significant risks or through a learning curve, making mistakes but learning from them to apply in their trading strategies. The list of successful South African traders is extensive, with notable names such as Ref Wayne, Sandile Shezi and George van der Riet, among many others emerging in recent years.
But to say that Forex trading is a mainstream part of everyday life in South Africa, that would be an overstatement, for now at least. Although already notable, the Forex field in South Africa is still in a very early stage, essentially making baby steps on the global arena. Despite this, what South Africa has managed to achieve is the most advanced, liberalized and safe Forex environments on the entirety of the African continent, with great potential for further advancement and expansion in the years to come. Forex brokers in South Africa are among the most trusted and preferred choices for many traders not just in Africa, but globally as well, and as the field continues to expand and improve, South African brokers will likely see the ever-growing demand on their services.
Given that the Forex industry in South Africa is still an emerging one, the list of Forex Brokers there is not yet an expansive one, and while a number of notable brokerages have emerged, the list of top forex brokers will surely increase significantly in the coming years.
What we have done is, we have compiled a list of South African Forex brokers we believe to be among the best, with a notable track record and licensing, which will help you in identifying the best broker for you to work with.
CySEC, IFSC, ASIC
100 currency units
CIMA, FCA, NFA
Like every Forex market, South Africa has its own institution, ensuring the safety and security of all parties involved in the Forex trading – FSCA. So what is FSCA? The abbreviation itself stands for Financial Sector Conduct Authority, and its responsibilities include the regulation of the market and ensuring that citizens, and the South African economy as a whole, are protected from money laundering schemes. In the field of Forex, the FSCA is the institution that regulates brokers, authorizing them to conduct their services and activities. Its presence on the market ensures greater security and transparency, especially when it comes to traders. To give you an example, if you trade with a specific broker that is regulated by the FSCA, and they start acting shady or go bankrupt, putting your funds and investments at risk, the FSCA will intervene to reimburse your funds to you. As an added bonus, everything will be dealt with in accordance with local laws, by the local authorities, which you are much more likely to be familiar with. It is this layer of extra security that prompts us to recommend for every trader to go for a broker that is regulated by the FSCA. Don’t take it as an absolute necessity though, it is fine to go for a non-FSCA regulated Forex broker if they have a track record of honest conduct.
Do keep in mind though, that FSCA themselves do not recommend to go for Forex Brokers that do not have their license, or claim a false one. As a means of maximizing security, the FSCA generally recommends avoiding any Financial service providers which do not have a local license, as they tend to not meet the requirements to provide said services.
Some South African brokers have been known to falsely claim to be licensed by the FSCA, as a means to be portrayed in a more legitimate way. Thankfully, it is rather easy to conduct the research on the regulations and safety by yourself, to check the validity of such claims. If requested, the Broker will provide you with the license number, which can be used to go on to the FSCA website and check whether the brokerage actually has a license or not. Should you search provide zero results, that is a red flag that prompts an immediate report to the FSCA, so that they can take action against what is likely to be a scam brokerage. Should the license show up in the list, don’t let your guard down just yet. Check the status of the license, to see if it is an expired one or if it was actually revoked. Given that the FSCA keeps regularly updating the information on the licenses they provide, including their expiration and revoked statuses, the information you may find should provide you with a good basis to draw accurate conclusions on whether brokerage can be trusted or not. All good Forex brokers in South Africa want to have a valid license and be properly regulated, as it gives them greater legitimacy in the eyes of prospective traders.
One thing to keep in mind is that the FSCA has recently undergone a substantial change, changing from its previous name, the Financial Services Board (FSB) to the FSCA. The institution was restructured as well, with a significant part of the old staff being laid off and replaced by newer faces. A host of new responsibilities were also added, including the provision of education on financial matters, ensuring financial stability, spreading of information on new developments and oversight of the changes in the financial sector in South Africa.
Now that we have covered the regulatory part, let’s shift back to the brokers and discuss one of the key aspects that play a major role when choosing a new brokerage – Bonuses. Whether you are an experienced trader looking for a new brokerage to work with, or a newcomer to the field looking for decent forex brokers for beginners, one thing you should keep in mind is – which of these brokers provide the most lucrative bonus to start trading with them.
If you are not aware of what a Forex bonus is, the concept is fairly simple – Forex brokers provide it in order to attract more customers to use their services, and there’s a great variety in the types of bonuses offered, all with the aims of attracting as many new traders to their platform as possible. What these bonuses do is they provide a great benefit to all traders, be it beginners or veterans.
Let’s take an example of a no deposit bonus. No deposit bonus is usually the most sought after of all by every trader, although brokers tend to offer them the least. The way it works is that the broker provides you with a specified amount of money that is deposited to your account as soon as you register with them, which you can use to trade on a given platform. Such bonuses provide a great incentive for traders to join the platform that offers them.
For beginners, it makes it much easier to enter the world of Forex trading, as they tend to be cautious to deposit real money, due to lack of experience. While operating on demo accounts is a great way to learn the basics of Forex trading, it becomes less practical and useful when it comes to trading itself, as a demo account struggles to correctly reflect the intricacies of the real market. No-deposit bonus helps the beginner traders to overcome that first barrier of trading with real money and enables them to trade with real stakes in a real market environment.
As for experienced traders, bonus money provided acts as no-risk additional funds to be used for trading, which they can quantify into a significant profit, thanks to their experience and expertise of trading on the market. Should the trade fail, then there’s no direct loss for traders.
Top Forex brokers in South Africa usually offer no deposit bonuses of about 400 Rand, but the amount varies from broker to broker. Do keep in mind though, that bonus funds cannot be withdrawn from the platform, and are used purely to generate profit there.
If you are planning to become a Forex trader anytime soon, which is likely the case, as you have made it this far down in the article, then you have definitely asked yourself the following question – how much do I need to start Forex trading in South Africa?
To put it simply, online Forex trading doesn’t cost anything to start. While this might sound puzzling at first, the secret lays in the name itself – trading. You see, there’s no fee to enter the coveted world of Forex trading, you do so by simply trading. What you have to do, however, is invest the money that you will be using for generating your income, and Forex brokers do have a fixed minimum amount that you have to deposit to be eligible for trading. The best part is that you can withdraw your invested funds at any point. Should things go south and you lose some of your investments, which is very likely to be the case as you are a beginner, you can make up that loss by trading and making a profit from the remaining funds. While this is the case, however, Forex traders in South Africa still go to great lengths to deposit as little as possible to have a viable amount to start trading.
As mentioned above, South African Forex brokers have a minimum set amount for the deposit necessary to start trading. While the amount does vary from broker to broker, over the years a standard of a sort has emerged in terms of minimum deposit among the top brokers. This standard amount hovers around roughly 2,800 Rands, do keep in mind though, that this is by no means a fixed amount and there are numerous cases when beginner traders started out with far smaller deposits. So how do you go about budgeting your investment into the Forex field then?
Your choice of a Forex broker that you shall be starting out with is the first variable that shall help you determine how much money you will need to invest. While usually, 2,800 Rand deposit is frequently the case, there are well regarded and trustworthy South African brokers that offer minimum deposits of as low as 200 Rand.
So do your research, budget accordingly, and depending on your expectations and needs for making a profit off of Forex trading, you will have no difficulty in determining the amount of investment necessary to start off your trading career.
To sum it up, the Forex market in South Africa is expanding rapidly. More South African Forex brokers are springing up, and international brokerages are entering the market. With FSCA going great length to improve the quality and security of the Forex field in South Africa, it is a ripe time for aspiring traders to start off their trading careers, and Forex brokers are there to help them.