How to Legally Start Forex Trading in South Africa

Best Forex brokers

1

9.4/10

Go to broker

eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. Don’t invest unless you’re prepared to lose all the money you invest.

Minimum deposit:

$50, $100 (for UK clients)

Bonus for deposit:

0%

Regulation:

CySEC, FCA, ASIC

Review

The eToro broker was founded in 2007. The company promotes itself as a social trading platform working with traders from over 140 countries. The broker has several divisions operating under different jurisdictions and licensed by different regulators. For example, eToro (Europe) is licensed by the Cypriot regulator CySEC (109/10) and eToro (UK) is licensed by the British regulator FCA (583263). The broker also has a representative office in Australia and the USA. eToro Profile Details

Pros/Cons

•the minimum transaction amount for copying is $1;

•handy functionality for passive investing;

•regulated by independent monitors;

•it is possible to purchase contracts for fractional shares (that is, to invest amounts less than the cost of one share);

•it is possible to buy shares at once (not CFDs) on the US stock exchanges.

•high spreads;

•periodic technical failures in order execution;

•lack of the most popular platforms such as MetaTrader 4 and MetaTrader 5 in Europe and the CIS;

•no access to ECN systems, orders are processed only according to the STP (straight-through processing) scheme with access to specific liquidity providers;

•there is a commission for withdrawing funds;

•impolite support staff;

•inconvenient website.

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2

9.2/10

Go to broker

Your capital is at risk.

Minimum deposit:

No minimum

Bonus for deposit:

0%

Regulation:

FSC (BVI), ASIC, IIROC, FCA, CFTC, NFA

Review

The name OANDA is an acronym for “Olsen & Associates” or “Olsen AND Associates”. It is registered in the United States and provides its clients with a wide range of financial services in most countries of the world. The company was founded in 1996 and is currently regulated in four jurisdictions. The main regulator of the broker is the UK Financial Conduct Authority (FCA). Oanda Canada is licensed by IIROC. The company has several significant awards to its credit, including a victory in the category "Best Forex Trading Technologies" from the UK Forex Awards, "Best Trading Platform" from FX Week, as well as "Best Customer Service" from the US Foreign Exchange Report.

Pros/Cons

•Minimum deposit from 1 dollar.

•A large selection of the most popular trading instruments.

•Several reliable and reputable financial regulators.

•Inconvenient and poorly functioning site.

•Lack of cent accounts.

•Lack of bonus programs.

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How to start Forex trading in South Africa

Before starting to trade Forex, it is essential for South Africans to educate themselves thoroughly on the market, technical and fundamental analysis, and risk management principles.

1 Step 1. Choose a broker and open an account

The first step is choosing a suitable licensed broker. Traders should open an account with a broker regulated by the FSCA to ensure proper oversight. Some reputable options include:

For more insights into brokerage in South Africa, refer to this article, 10 Best FSCA (South Africa) Regulated Forex Brokers. Comparing factors like trading platforms, spreads, and fees can aid in selection.

2 Step 2. Setup platform and analyze the market

After setting up an account, the next step is gaining practical experience through market analysis. Traders can learn to identify opportunities through chart patterns and indicators and monitor news events that impact currency pairs. Practicing trading strategies on a demo account can build skills without risk.

South African traders may be interested in this analytics page: USD/ZAR forecast for today by Traders Union analysts.

3 Step 3. Trade and control your risks

When ready to trade live, it is critical to manage risks appropriately. Traders should use stop losses on every position, limit position sizes, and limit capital risk per trade when starting.

With sufficient education, a regulated broker, strong analysis skills, and robust risk management, South African traders can participate successfully in Forex markets while remaining compliant. But rushing to trade without solid knowledge or effective practices carries high risks of loss.

Tips for beginner Forex traders in South Africa

Here are some tips for beginner Forex traders in South Africa:

• Opening a demo trading account allows new traders to gain experience without risking capital. Practice accounts can be funded with virtual money to simulate live markets

• Technical analysis skills like identifying chart patterns, trends, and support/resistance levels are essential. Beginners should learn skills like drawing trend lines, recognizing candlestick patterns, and using indicators like moving averages

• Fundamental analysis is also key for Forex trading by tracking economic data releases, central bank policies, geopolitics, and other events that can impact currency pairs

• Managing risk is crucial when first live trading. Stop loss orders automatically exit positions at predefined levels to contain losses on each trade

It may be that active trading is less suited to you than passive investing. Then consider joining a PAMM account to have an experienced fund manager trade your capital. PAMM stands for Percent Allocation Management Module, allowing multiple investors to join a single managed account. This can mitigate risks and leverage a pro trader's experience. You can refer to this article for Best PAMM brokers in South Africa 2024.

If you are good at creating a solid trading strategy, you may be able to get sufficient funding. Research prop trading firms that recruit qualified traders. Reputable firms provide training, capital backing, and risk controls to help beginners succeed. For example, leading prop firms like Top Traders South Africa and Prop Trading South Africa offer these benefits and profit split arrangements. Refer to this article to learn about the 5 Best Forex Prop Firms in South Africa.