There exists no governmental law prohibiting the online trading in the country and it is completely safe to trade online. The question arises due to the fact that there are many famous locally established and regulated brokers available for South Africans and therefore people assume it must be illegal. Also, many people wonder is Forex trading legal in South Africa?

Furthermore, South Africa has its own Financial Sector Conduct Authority which acts the regulatory body for the Forex brokers, as well. However, it does not mean that if the broker is not regulated by this specific authority, then they are unlicensed. Usually, the regulated brokers will often display their licenses on the websites, easily visible by the visitors. Even if you would like to double check if your broker is regulated by FSCA, the official page of it provides the online list of all the entities and persons that are licensed.

Keep in mind that you should never trust the broker that either has no license from the credible regulatory authority or you cannot find the information about the authority anywhere. If the broker claims that they are licensed, but the license issuer is nowhere to be found then it is a signal for you to immediately leave the broker. Do not simply believe in the reviews that brokers publish on their websites, as we cannot possibly know if they are legit and do not be fooled by the attractive offers and bonuses offered by unregulated brokers.

The simple answer is no, you should not trade with unregulated Forex brokers. Always make sure that you are looking for the Forex regulated broker with the up-to-date license. The main reason for that is other than risking to getting scammed by unregulated brokers, the regulatory bodies will make sure that your rights as a trader are strictly defended when dealing with the regulated brokers.

For instance, if the broker that you are trading with loses all of its company assets and goes broke, you will not lose your account funds and it is in fact thanks to the regulatory authorities. In addition to the security of your account, the official authorities also guarantee that the traders will not be treated unfairly and will not allow unjust establishment of the terms by Forex regulated broker. Financial Leverage Established Register Here Learn more.

Financial License FSA. Trading Software MT4. Starting Capital ZAR 1, Starting Capital 1 USD. IQ Option. Promotion Not available. Trading Software WebTrader. Promotion 30 USD. Is online trading legal in South Africa? How to check if a Forex broker is licensed? Select the desired currency and then click on Properties located on the right side.

Most brokers waive deposit fees, but third-party costs from the selected payment processor may apply. All Forex brokers in South Africa maintain a dedicated page on their website, where all costs are listed. 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. Not all options are available to all traders, restricted by geographical location.

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. 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. Some brokers conduct currency conversions at the Forex spot rates, without levying additional fees, while some add between 50 pips and pips, depending on the currency. For most retail traders, it will be more cost-effective to trade from a U. Dollar account and select a Forex broker that supports deposits and withdrawals in their local currency. 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. 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. All three are excellent choices in this category. 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.

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.

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.

Therefore, traders can trust them with their execution model. 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, 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.

Understanding Currency Pairs

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. 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. It does not matter how high your leverage is. 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 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. AxiTrader and eXcentral remain very competitive at and , while AvaTrade remains uncompetitive at 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. This is generally where the best South African Forex brokers offer all available products and services. Dollar base currency account and in a currency pair where the U.

The minimum lot size should be 0. Low equity portfolios can quickly drop to zero, so be patient before upgrading. 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.

The account base currency is the one in which your broker converts all profits and losses. Dollars, or if you deposit South African Rand, your broker will exchange them into U. For Forex traders, U. 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.

The most common trading platforms are MT4 , MT5, and cTrader , available as a desktop client, webtrader, and mobile app. MT4 remains the most flexible one, due to over 20, third-party add-ons.