Forex market is very competitive and of course, choosing the right FX broker can be overwhelming. There are certain qualities everyone has to look for.
In this case, we talk about security – which means verifying your broker’s credibility through global agencies is a must. Also, look at how easy your broker allows you to deposit your profits. Everything that you can mark with green will give you more confidence and trust in your broker.
By analyzing the trading platform of your broker and the way he responds to you, it’s what will help you decide if your choice was right.
TOP Forex Brokers in South Africa
In South Africa foreign exchange trading is very popular. It is also known that the country has an excellent system that protects from fraud. But as a fact, the practices of foreign exchange trading in South Africa are quite small. Which of course, means that the Forex business in this side of the world is continually in the phase of growth. Generally, the field of finances in South Africa seems to be very forthcoming for FX trade because of the very loose, legal and economic regulations.
Many worldwide known brokers offer their financial services in South Africa. Have a look at this TOP 5 list:
The norm to select a convenient forex broker may include options such as the existence of small and mini accounts for new people that are interested in forex, a component of social trading and the trading platforms that are offered. It may be a good option as well to verify if the broker asks for commissions for the trade and if there are appealing rewards and the chance of growing more for the new people interested in forex trading.
Financial Services Board
The Financial Services Board – also known as FSB represents the organization whose service is to protect South Africans in the finance field, other than the banks. Whenever you choose a broker, a good thing to do is to check the FSB Financial Service Providers list to see if your broker is in that list. Regulators make sure that the brokers are following the law, and they also provide insurance for the trader’s funds.
Other Licensing Authorities
Most South African traders choose trading platforms certified by other licensing authorities, the most outstanding being the European regulatory agencies. The most trusted, and most popular, agencies are the CySec (The Cyprus Securities and Exchange Commission), FCA (UK’s Financial Conduct Authority) and ASIC (the Australian Securities and Investments Commission).
History of Forex in Africa
Although some of the traders might know about Forex’s existence since the first beginning of the Internet, it was around for a much longer time. However, the presence of Forex’s can be slightly seen back to the time when the gold was, and it was the standard in the money system of the world, which started in the years of 1875.
However, at that time, not every country has joined this type of trade. It has not passed more than 16 years ago since South Africa started it’s the trading activities of currency. This is near the same time when their local organizations began to give away the money exchange to the offshore brokers through the ways of the self-directed traders.
Moreover, it also happened during the same period that there didn’t exist any regulations that impeded organizations or individuals from starting up their online businesses. Unfortunately, the starting of these activities were not successful since it led to a lot of millions of Rands being lost due to fraud. As a result, the appropriate regulations have been established since then to prevent scams and other unfair things related to money to happen again.
Why is Forex training necessary? In this field, people need time to become professionals. Everyone has to do some exercise, by it as little as it can be. Some of the benefits of undergoing these training include acquiring basic skills where the people can be able to make the right decisions based on the fluctuations in the market and the end, minimizing the possibility of losing money. Understanding the terminologies that are difficult for the average person and getting the knowledge to make proper judgments is another thing the training offer to people.
With the right skills, a person will tell whether a broker is legitimate or not. The knowledge will also allow a person to work by not having problems with the law.
Why Forex Trading is so Popular in South Africa?
There are several reasons why the number of people in South Africa that are participating or are interested to join in the foreign exchange trade business got higher:
- Due to South Africa’s financial place in the world – It may not be as high as euro and dollar, but the South African Rand is not a weak currency. The Rand is one of the more prominent coins in Africa, and its position in the global charts of forex trading is quite high. This results that during the foreign exchange trade, the chances of being at a loss because of weaker currencies are meager.
- Most accounts of trade favor South Africans – In case an investor in South Africa chooses to open a trading account with USD, EUR or GBP, the exchange rates will often be just right. This is mostly seen when withdrawing profits to their accounts. This way, people engage in forex trading without the fear of having their earnings cut by a high amount due to loses in trading.
- Foreign exchange in South Africa has much freedom – Compared to working a 9 to 5 job or at the office, forex trade in the country gives a lot of freedom to those that want to invest. The work can be done in your own’s comfort zone and no need to limit daily life activities. Also, there is no reason to take the time to go every day to work on the busy streets of the morning, meeting deadlines that test your limits and there is also no one to report all the things you do too. In this way, forex trading in the country allows you to be your boss. You have the opportunity to manage your time, and you can also be with your family and friends as well.
- You can get well paid by the trade – A lot of people in South Africa are engaging in forex trade, and later they make it to be their part-time job or just for fun. They can earn enough money from trading that allows them to even pay their bills such as water, rent, electricity and so on. Many people can use it as a platform where it’s possible to become wealthier and make their lives a bit better.
- You have the opportunities to measure the risks and profits -Those who choose to participate in forex trading and happen to live in the country have a lot of varieties to choose from. Nowadays, not only the importers but also the exporters have different choices that allow them to check and balance the risks and the potential earnings before engaging in any of them. By following this approach, they can take the right decisions that in no way will damage their private life and the budget.
The determination process of the price
It is very complicated because trading forex means that the currencies have to be exchanged and there must be a method that determines the rates. However, the prices keep on changing, depending on the region and how the South African Rand is doing at the moment compared to the other dominant currencies such as Euros and the dollars.
The potential risk is also huge
Compared to any other job that gives a high paying and it has to invest in it, the forex trading also has its potential risks. For example, a trader has a lot of uncertainty that a currency will give or not a big profit. Moreover, most people that invest and work remotely in the country don’t have enough knowledge about how the foreign exchange market is acting, a higher risk building this way. This risk factor makes many people want to invest less money because the thought of losing too much scares the people of South Africa away. And as easy as you can earn them, as easy you miss them too.
Rules of Forex Trading
Engaging in Forex trade also has some rules. Those who want to join in forex have to follow the given set of rules made by the government side. Some of these rules include the following:
- The law demands the citizen to get a reliable & licensed Forex broker who will help in the deal.
- There are limitations of the forex that may be taken seriously such as transporting real foreign currencies inside the country, which is different from forex trading online.
- Also, for someone to stock their account with more than R1 million, the Tax Clearance Certificate must be first acquired.
- In cases where must be transferred more than R10 million, the person has to first apply to the financial surveillance department.
Forex Regulations Overview in Kenya
Kenya canceled all exchange control laws in 1993 and changed to a fully market-determined exchange rate system. There aren’t any controls on foreign exchange, and this policy has attracted short-term capital influx.
But nowadays, the Kenyan authorities now will be able to not only license the brokers but also obtain information on all the financial activities to protect Kenyan investors. At the moment, Kenyan authorities are not aware of how much money is in circulation in Forex online business in Kenya. A fact is that Forex trading in Kenya is growing at high speed, hence boosting concerns for regulators in the country.
Forex Regulation Overview in Nigeria
While in Nigeria, currently there aren’t local reliable brokers. The easiest option for Nigerian traders to enjoy potential profits from Forex is to use the services of a broker based in a foreign country. The good news is that many international brokers will let you conveniently deposit and withdraw funds.
How to Choose the Right Forex Broker?
When selecting a FX broker or binary options platform, one of the primary and essential things to think about is to check if the broker is regulated by FSB (local market regulator) or not. In case the broker is not restricted, don’t let it be even a passing thought to open an account with the broker, as you might have to face many inconveniences, mostly because there are many scam brokers out there that come from other countries with the thought of getting your money which you didn’t earn easily.
The main task of the FSB is to regulate all companies that provide financial services in South Africa. The institution has significant and reliable power, enough to punish those brokers that fail to adapt to other rules. The brokers can even get their license taken away. One of the main objectives of the regulator is to make sure that only certified brokers will offer investors fair and transparent services. So, if you choose one of the FSB approved brokers, you will be able to trade way more safely and assured, than if you bought with some shady, unregulated broker.
Other things to think about would be to find a broker that gives a nice, easy to use, user- friendly platform. A commission and spreads are as well very significant as you might not want to be charged hidden fees by the time all trustworthy brokers will give you a small, fixed amount or variable spreads. There must be a lot of different types of accounts you have at your own choice, because the more, the better. If the broker is not there to help you, you should also not be there with him, sending currencies in his company. Customer service is essential, and as a final note, extra useful services are a big thing in deciding which broker to choose.
In the end, forex trading is one of the ways through which people can make income from the side. In South Africa, people continue to like the idea and get more interested in online investments. Many advantages come with engaging in this activity, as told above. Working from home and not having to report to any boss is a big advantage, isn’t it? Also, it is a well-paid job if you know how to play your cards well and there are no time limitations.
You know you have all the time in the world to trade Forex, so there is no need to rush it. Firstly, you need to eliminate one problem, which is to find a good and reliable broker. Now, you have an idea of how to do that: By checking whether the broker is regulated and what kind of services can be offered to you. Of course, trading is always a risk, and you should be ready to lose, but if you have done your research well, success will come in your trading sooner or later.