Are you currently working with the best forex brokers in South Africa? Or are you still finding them? This article will be showing the ways to compare and then choose the best South Africa brokers.
STANDARDS TO COMPARE
How do we compare brokers to each other in forex market of South Africa? After years of trading with big and small forex brokers in the world, we have finally listed out 3 most popular standards to see the differences among the brokers:
- Regulations of the major and minor regulators
- Trading conditions which include mainly spread and leverage
- Types of account offered by brokers
Ranks of brokers are also based on regulation, platform choice, and trading conditions for the customers.
Regulations are the licenses provided by governmental regulatory agencies to manage the brokers and to make sure that trading conditions and environment are safe for traders and their funds are protected, as well. These are the trusted licenses: FCA, FSCA, CySEC & ASIC. Often, the brokers with more than one trusted regulation are recognized to have more trust and transparency.
These are 3 most common things when we are talking about the fame or reputation of a broker: regulation, trade execution method, and client fund management.
In general, regulation of a broker indicates its reliability. The more major regulators a broker has, the more level of trust it will gain. We can see that a broker which has more licenses from the major regulators will get more trust from them.
Next, we will see how the broker executes your trades. If a dealing desk is included in the execution or if there is any conflict of interest between traders and the brokers, it will be a bad point for those brokers. They are even less trusted if there is financial incentive for them when you lose your trades.
Finally, all the funds should be segregated into many accounts at major banks in the local jurisdiction. If a broker does this, it is considered very good since it avoids risk of bankruptcy for traders. Exness is one of the brokers who can keep you safe -> Exness reviews.
The conditions of trading
As mentioned above, there are spreads and leverages that we are talking about in this term. Spread is the difference between the Bid and Ask price, it can also be known as the difference between the buy and sell prices. Therefore, the spread is wide when the difference is much, and it will be tight if the difference is low. Spread is measured in pip. For example, 20 pips is considered wide and 0.5 pips is tight. As a result, traders prefer the brokers with low spread because the cost for them is low, too.
As we can see, if there was no leverage, it would be impossible to do business for individual retail traders. Why so? Because the movements in the forex market are very small. With leverage, traders can amplify the size of traders many times. For example, a broker offers 900:1 of leverage. The size of trades can be increased by up to 900 times, which is very high. The leverage varies among the brokers and depends on the experience of the traders.
Types of account
There are mainly 3 account types in the market recently: live/real account, demo account and swap-free account. Managed accounts are offered but not many brokers have.
People trade with real account to experience the real conditions, cost of transactions, price and money,…
This is trial version and traders can experience the customer service, trading conditions, research area,… of a broker without risk and profits or real money.
In short, traders should look at these standards above and find out the best forex brokers in South Africa for them.
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