WHAT TO DO BEFORE CHOOSING THE BEST FOREX BROKERS IN SOUTH AFRICA?
December 24, 2018
It is not easy to find out the best forex brokers in the market. There are now too many brokers, each one has their own strengths and weakness that each is suitable for a certain kind of traders. In this article, we will find the way to choose the best forex brokers in South Africa by comparing them to each other, using some common standards.
In common, we use these standards to compare brokers to each other before choosing the best forex brokers for your own:
- Trading conditions
- Types of account
Regulation is the license that are provided by governmental regulatory bodies to manage the brokers which sign up with these. The licenses such as FCA, FSCA, CySEC & ASIC are the trusted ones. Once they have signed the regulations, they have to follow the rules to make the safe trading environment and protect all the funds for traders. In general, it is believed that a broker with more than one international license has more trust and integrity from the governmental agencies.
It is not easy to trust a broker if we have not checked these 3 things carefully: trusted regulation, trade execution method, and client fund management.
Trusted regulation is important. It can indicate which level of trust a broker has. Normally, a reliable broker should have major regulators and it would be better if that broker has more than one license.
Trade execution is the second important. It could indicate how reliable a broker is by checking these things: whether a trade executed well or not, a dealing desk is included in the execution or not, if there is any conflict of interest between traders and the brokers, if the broker receives financial incentive to have you lose your trades or not.
Finally, it is safe for traders to have their funds segregated into different accounts at major banks in the local jurisdiction. Because of the risk from the bankruptcy of broker, that broker should do this to make sure traders protected. One of the most reliable brokers is Exness => Exness sign up.
The spread is the difference between the Ask price and Bid price (the buy and sell price). When the buy and sell price for any currency pair are far from each other, it is considered wide spread. Otherwise, it is considered tight spread when the 2 prices are close to each other. For example, 18 pips are considered wide spread, when 0.3 pips are considered tight spread. As a result, traders are tend to work at a broker with the tightest spread to maximize the profits. Brokers offer a variety of spreads, too.
Leverage is very helpful in the forex market. It helps increase the size of trades, which is very beneficial for traders. Just imagine that there was no leverage, the small movement of the market would give no chance for individual retail traders to do business. For example, a leverage is 550:1, it allows trader to amplify the size of trades to 550 times, which is very huge.
TYPES OF ACCOUNT
There used to be many types of account in the past, but nowadays, there are fewer: Live or Real accounts, the Demo accounts, and Swap-free account. Brokers also offer managed account but very few of them have this kind.
Because it is the real account, it has the real conditions, real market with the real money. It also effects to your account balance when you deposit, transfer money or trade in the market,…
Because it is demo version, it has no risk, no profit but fake trading conditions, price, money,… It allows users to try the trading platform, customer service, research area, and trading conditions.
In short, there are the certain standards as above to compare and find the best forex brokers in South Africa.
For Thai readers, click here for best forex brokers in Thailand