Forex trading has found a lot of success over the last couple of years. Especially in South Africa, Forex trading has grown more than ten folds.
The first and most important step about starting a Forex broker in South Africa is selecting South African brokers.
This article will serve as your ultimate guide for selecting the right Forex broker.
Things you need to know about Forex Brokers in South Africa
Following is a list of things you need to know about Forex brokers in South Africa.
Regulation is a monitoring mechanism for Forex brokers in South Africa by regulatory bodies such as government authorities. If you are looking for a broker, make sure that it has a license from a decent regulatory body.
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Most brokers also advertise their license numbers on their websites. You can cross-check the broker’s provided information with authority.
Local and International Accounts
Brokers usually offer two types of accounts to keep your money. Each broker doesn’t need to offer both types of accounts.
Local accounts offer depositing funds in South Africa’s local currency. However, international accounts store your funds in USD.
When ZAR takes a hit or performs better against USD in the open market, the difference arises. If ZAR tales a hit and your funds are stored in a USD account, you will earn some profit. However, the opposite scenario is just as likely to happen.
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Thus, we suggest that our readers store their funds in ZAR-based accounts without taking any risks.
Trading platforms are not such an issue. However, it would help opt for a broker with MT4 or preferably the MT5 platform. MetaTrader platforms are fast, snappy, safe, and robust.
The deposit limits of Forex brokers are set at an average of 100 USD. If you are relatively new to Forex trading, then you should look around and find a broker with lower deposit rates.
Leverage is a crucial factor for a broker. Higher leverage rates are better for new traders who will invest small sums of money. However, lower leverage rates suit professional traders since they are less likely to endure a loss on their higher capital trades.
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Whether your broker is based in South Africa or abroad makes a huge difference. South African brokers have to comply with local laws and financial authorities. However, international brokers are not bound or answerable to the South African government. Thus, you will have a hard time finding justice.
Local authorities are also more helpful towards South African citizens. You can also hire a local lawyer and fight the case in your local court if the issue takes the form of a lawsuit.
Frequently asked questions
Users often come across these issues when they are finding a new broker;
Is it possible to file a complaint against a broker for misconduct?
If you have reason to believe that your broker is involved in a scam or some illegal activity, you can file a complaint with the regulatory authority which has licensed it.