Looking to Start Trading Forex? You Need a Reputable Broker!

Looking to start Trading Forex

In the last few years, trading the forex market has become increasingly popular all around the world and especially in South Africa. Some are lured by the dream of easy money, others treat their trading as a small business. No matter what motivated you to pick up trading, as a beginner you need to start with picking the right forex broker. This can be quite a difficult task for any new trader. The retail trading space has become super competitive with hundreds of brokers trying to make you trade with them. This is the reason, why it is important to know what to look for in a good fx brokerage.

1. Account Security and Safety

First of all, you‘d want to make sure that your hard-earned money is kept in honest hands. Nothing is worse than accidentally depositing with a scam broker and losing all before even placing your first trade. This is the reason, why it is highly advisable to keep a close look at where the broker in question is regulated. In South Africa, the FSCA (Financial Sector Conduct Authority) regulates the Financial Industry, including fx brokers. They ensure, that there is no foul play and make brokerages abide by strict rules to ensure safety. This does not mean, that South African traders have to signup with a broker that is FSCA regulated. There are many regulatory bodies outside of SA trying to protect the rights of retail traders. Just make sure the company you pick is regulated at all. Otherwise, you might be in for a big surprise. Rest assured, it won‘t be a nice one.

2. Spread and Fees Charged

Of course, brokers are no charitable organizations. They exist to make money. That is why you have to prepare yourself mentally to pay a fee every time you place a trade. Most Brokers offer all sorts of special accounts catering to different trading styles. If you are a scalper, you might look for an ECN Account, that offers zero Spread – True Market rates. Be prepared to pay a commission which is usually over 6$ or 90 ZAR per Lot traded. If you are a long term or swing trader, it might be cheaper for you to accept higher spreads. This is especially true if you are looking to trade currency pairs that traditionally offer low spreads such as the popular EURUSD or GBPUSD. Also, be advised that some unregulated brokers charge various other fees for account maintenance or even apply a penalty if you stop using them.

3. Easy Withdrawals

Any reputable broker allows their clients to withdraw their funds safe, and easily. It doesn‘t matter if you have decided to close your account or just get some profits out to spend at your leisure. The reason why some scammy brokers delay or even refuse payout is that they are placing trades against their clients. Explained n easy words: If you win a trade, they lose! Of course, they want you to keep trading until you eventually blow your account! These tactics are known from an online casino. Make no mistake though: Trading the Forex Market is risky, but not a gamble! Good traders can and make consistent profits. That is if their broker is not standing in their way!

4. Execution of Orders Placed

If there is high volatility in the market, it can happen that order execution lags by as much as one or two seconds. During normal trading times, a good broker must fill your order immediately after you click the „buy“ or „sell“ button. This is very important for any Trader, but especially for those who are playing the lower timeframes. So-called „Scalpers“ depend on instant executions because their small profits depend on it. Shady Firms will sometimes delay order execution to make your trade fail on purpose.

5. Support

No one wants to be left alone. Especially new traders are most likely looking for some help and support. Of course, a broker is not there to hold your hand and make you become a profitable trader. But the support offered should extend beyond responding to questions related to your account. Pick a broker that offers a wealth of training material. This way, you can be more sure, that the broker is not in the business of trading against you, but wants their clients to succeed and keep trading. Trust your gut Instinct and feel free to send your Broker a Support Question to ask how responsive and friendly they are. You are, after all, settling into a long term business relationship. If you want to treat fx trading as a business, it only makes sense to vet every business partner carefully!

6. Instruments, Leverage, Trading Platforms, Bonus Offers

Depending on your Plans, it is important to look at the Trading instruments offered. Make sure your new Broker enables Trading the currency pair, metal, or asset you’ve planned on trading. Furthermore, ensure that the broker’s trading platform is to your liking. This should not be an issue for new Traders though, since virtually every brokerage offers access to Metatrader 4 and 5 (MT4, MT5). Only if you are interested in less popular software such as Ninjatrader pay attention to this. Depending on your risk appetite, the leverage offered is quite crucial. Highly regulated European or American brokers often only offer to trade with highly capped leverages. That means, instead of 1:500 you are looking at 1:30. This means you need to deposit more money to fulfill margin requirements – or accept smaller gains in exchange for lower risks. In closing, don‘t look for brokers offering a deposit bonus. Remember, forex trading has nothing to do with gambling and you are NOT dealing with a Casino here!

How Do I Find the Best Forex Broker for South Africans?

If you have friends who are already trading forex or commodities, ask them first! Why not profit from their experience? Once you have honed in on a few companies, it makes sense to read some reviews online which can be found on websites like Forex South Africa. These Websites often offer a Wealth of Information on all available brokers so you can pick the one that suits you best. Do not trust „Forex Gurus“ promising you instant profits. They often use Instagram, Youtube, Facebook, or other social media platforms to lure in young, naive South Africans. Many of them are outright scammers, others try to make you participate in illegal Ponzi and pyramid schemes. Never give a random person any crypto like bitcoin, just because they appear successful! Anyone with a little bit of money can rent a Sportscar and pose with a stack of fake cash!

In Conclusion

If you are new to the world of forex trading, treat it like a small business! The online brokerage you‘ll be dealing with constitutes your future’s most important business partner. This is why it makes a lot of sense to take your time in making sure, the broker is the best choice for your needs. Many South Africans look at forex trading as a good way to make money from the comfort of their homes. While it is possible to be a consistent, profitable trader you need to ensure that the broker is not scamming you. Exclusively deal with companies that are strictly regulated. Make sure, the brokerage values you as a client and wants you to succeed. Only then you can rest assured, that your deposits will remain safe!

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