Overview
Of all the financial markets in the world, the forex market is by far the largest and the most liquid of them all, experiencing trading volumes that exceed trillions in US Dollars daily. The forex market is one of the easiest markets to access and all you need is a live trading account with a forex broker.
However, the process involved with choosing the right broker must be followed thoroughly as it can affect your trading in the future. Before selecting a broker, you must realize what type of retail investor you are, what financial goals and objectives you have, and what you expect to gain by trading forex.
Each broker offers a wide range of currency pairs that can be traded alongside other financial instruments. Each broker has its unique sides, offerings, pros, cons, and several other considerations that you must evaluate before choosing one.
Some of the most crucial considerations relate to regulation from reputable market regulators, and several other security features to ensure that traders are safeguarded. Security features offered will differ from one broker to the next, and some brokers have several functions integrated such as multi-layer sign-in, two-factor verification, and others.
Forex traders must also remember that some forex brokers have restrictions in some regions because of regulatory requirements, which means that forex traders must look for a broker that is regulated to operate within their country of residence.
Other areas where forex brokers also differ is the trading software that they offer, the different account types, cost and fees, and several other components. Different brokers cater to different levels of retail and institutional traders.
10 Best Forex Brokers in South Africa for 2025
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Broker
Review
Regulators
Min Deposit
Official Site
What is Forex?
Foreign exchange, more commonly referred to either as forex or FX, refers to a global decentralized marketplace that allows for international currencies and currency derivatives to be traded, using a massive computer network infrastructure that connects market participants from around the world.
The forex market may not be based in a physical location, but it is the largest and most liquid market in the world, according to trading volume, which can reach a value of well over $6 trillion (85 trillion ZAR) accumulated by the trading activities of forex traders, brokers, banks, and several other market participants.
Another characteristic that the forex market has, is that it operates 24 hours a day, 5 days a week from Monday to Friday, with different overlapping sessions in Tokyo, New York, London, and other regions.
Forex trading is important as it allows for massive amounts of currency to be exchanged for an equal value in another currency at a certain exchange rate, or market rate, which is driven by supply and demand, subsequently driven by other factors such as economic and political factors, news, and more.
Forex is traded so that market participants can get currencies in exchange for their local currency, mostly so that international business can be done. In addition to this, forex trading is also done for profit by speculating on the price movements of currency pairs.
The Basics of Forex Trading
Currencies are always traded in pairs that consist of a base currency and a quote currency. The base currency is the trader’s local currency or the currency that they want to sell to obtain the quoted currency, the second currency in the pair.
To do this, traders must pay the spread, which is the difference between the bid and ask price, and which is indicated in pips. Spreads can either be fixed or they can be variable, depending on the type of broker that the trader uses.
Fixed spreads are often wider because the broker calculates its fee into the spread and therefore does not charge commission fees. Variable spreads, on the other hand, can be as tight as 0.0, but they have a commission fee to cover the broker’s fees.
The exchange rate between currencies is something that will fluctuate according to the supply and demand of currencies along with other factors including interest rate, political and economic circumstances, news releases, earnings calls, and more.
When traders use forex trading to speculate, they tend to use technical analysis, fundamental analysis, or a combination of both, to determine the direction that the forex market and currency pair they are trading may take, allowing them to profit if they speculate correctly.
If the trader speculates that the price of a currency will increase, they enter a buy/long position and subsequently profit from the appreciation of the currency pair. In reverse, when traders think that the price will decrease, they enter a sell/short position, and they profit if the currency pair depreciates.
There are many different forex trading strategies that traders can use to determine where and when they should execute trades, close positions, whether they should buy or sell, and so on. However, not all trading strategies will guarantee that traders will be successful.
Not all trading strategies work in the same manner as they use different indicators, charts, timeframes, and different orders. Traders must understand what type of trader they are, and what they are willing to dedicate to forex trading before they can choose a trading strategy that will work for them.
Another consideration regarding forex is that there are different position sizes to consider, namely standard, micro, mini, and nano lots. Position sizing in forex is important as it can lead to great profits as well as significant losses if the market turns against the trader.
A standard lot is 100,000 units of the base currency, mini lots are 10,000 units, micro lots are 1,000 units, and nano lots are 100 of the base currency. Traders can easily trade larger position sizes when they use margin and leverage which is offered by their forex broker, but more on this later.
The next area to explore revolves around forex brokers, understanding what they are, how they work, and what traders must consider when they choose a forex broker.
What is a forex broker?
A forex broker can simply be defined as a company that provides financial services and that connects forex traders to different financial markets. They can either directly facilitate trading, or they can redirect the orders of their clients to market participants that can execute them.
Forex brokers and traders are connected through a trading platform, which is trading software for which the broker has the necessary licensing and that they then make part of their offering. Many forex brokers develop and offer their proprietary trading platforms for traders to use instead of using third-party software.
Forex brokers offer different native trading tools, or they offer partnered tools from third parties. Traders are also given access to educational material and research tools on the broker’s website or through the trading platform.
In addition, different forex brokers offer different trading conditions and packages that are suited to different traders according to their experience level, trading styles, and so on.
The different types of forex brokers
Forex brokers can differ in several ways and one of the first, crucial ways concerns the type of broker they are, between Dealing Desk and Non-Dealing Desk, or NDD brokers, which are further divided into different execution models.
Dealing Desk Brokers
Dealing Desk (DD) brokers are commonly known as Market Makers because they create a market for their clients where they can execute their trades, and they also provide their traders with liquidity instead of using external liquidity providers.
With a Dealing Desk model, Market Makers take the position as the counterparty and while this worries many traders, it does not mean that the broker trades against the trader or tries to turn the trade in their favor, it merely means that clients are given precise and accurate pricing and they have the benefit of consistent liquidity while this business model is profitable for the broker as well.
Market Makers make their money from the spreads that they charge, and they, therefore, offer commission-free trading to their clients. In addition, traders also have the benefit that they can trade smaller positions, up to nano lots, which allows a low-risk trading environment for beginner traders who are learning to trade.
Non-Dealing Desk Brokers
Non-Dealing Desk Brokers can be divided into three different types of brokers:
- Straight Through Processing (STP)
- Electronic Communication Networks (ECN)
- Direct Market Access (DMA)
STP Brokers
Straight-through-processing or STP brokers are very common, and they fill the orders of their traders by sending them to a liquidity provider (LP), which is either a hedge fund, bank, other brokers, or other counterparties.
To get compensation for their services, STP brokers will typically charge a markup on their spreads, but they do not always charge a commission.
ECN Brokers
ECN brokers offer traders direct access to liquidity providers with little intervention. ECN brokers do not put a markup on spreads to get their fees, but they charge a commission on each trade. ECN brokers often charge spreads from as little as 0.0 spreads, with commissions charged either per side, per trade, per round, or according to the position size and trading volume.
DMA Brokers
DMA brokers send the orders of their clients directly to a stock exchange, ECN liquidity providers, or other participants in the market with very little intervention.
Regulation and Safety of Funds
As a forex trader, it is important to remember that you are always responsible for the safety of your funds. It is for this reason that all traders are urged to thoroughly investigate the regulation and licensing that a broker claims to have before dealing with that broker.
Market regulators oversee the activities of brokers, ensure that they can meet their financial obligations, provide a fair and safe trading environment and that they have compensation for eligible clients.
However, it is up to the trader to decide which broker’s services they use, and not all brokers are regulated or overseen by reputable entities. All legitimate forex brokers are regulated by one, or more, reputable market regulators such as these:
- The Financial Sector Conduct Authority (FSCA) in South Africa.
- The Australian Securities and Investment Commission (ASIC) in Australia.
- The Financial Conduct Authority (FCA) in the United Kingdom.
- The Cyprus Securities and Exchange Commission (CySEC), and many others.
To check whether a broker has the necessary regulation and authorization, traders must take the licensing number present on the broker’s website and compare it to the market regulator’s website.
When forex traders fund their trading accounts, those funds are paid over to the broker, but the funds must be segregated accounts with top-tier banks, separate from the broker’s funds.
Not only must these funds be withdrawable at any given time, but these funds can only be used for trading activities, and not for operational purposes.
Account Types
Demo Account
Demo accounts, also known as paper trading accounts or practice accounts, serve the purpose for which they are named. These accounts are funded with virtual capital that can be used in an environment that mimics a live trading environment, complete with real-time pricing and actual market movements, without the trader risking their capital.
The demo account can be used by beginners to practice their trading and to gain trading experience whereas advanced traders can use it to test their trading strategies.
Micro or Mini Accounts
These are entry-level accounts offered by some forex brokers, but not all of them. The accounts are small-cap that allow traders access to the forex market with small amounts of capital, from $100 (1,431 ZAR) and less.
These accounts have restricted position sizes, often in increments of 0.01 lots, which helps traders control the risks that they are exposed to in a live market environment.
Intermediate Accounts
Also known as Standard, Gold, or Classic Accounts, these types offer a wide variety of features and functions. Some typical characteristics of the account are that the minimum deposit can range from $100 (1,431 ZAR) and $500 (7,157 ZAR), depending on the forex broker.
This account type also has some restrictions on position sizing, but many forex brokers allow micro or mini trading on this account. Traders who hold these accounts are offered bonuses on their deposits, trading activities, and other factors, depending on the forex broker.
Most of these accounts also come with negative balance protection, which is applied to such retail accounts, preventing the account from going into a negative.
Premium/VIP Accounts
VIP, Premium, and Platinum accounts are for professional traders who have extensive experience in trading forex. They are also suited to active traders who trade large volumes in each session and who use complex trading strategies, despite whether they are short- or long-term.
The minimum deposits on these accounts are often significant, from $1,000 (14,310 ZAR) and much higher. In addition, these accounts often do not have negative balance protection because of the experience level of the trader, and the expectation that such traders know how to control their risk.
Islamic Account
An Islamic Account is designed to cater to Muslim traders and those who follow the Sharia law, which prohibits the accumulation of interest where traders either receive or pay interest rates.
When traders use this account, they can partake in halal trading that is void of any interest, and where transactions are carried out immediately without delay.
Trading Costs and Non-Trading Fees
Spreads
The spread is the difference between the bid and asks prices which are indicated in pips. Spreads can either be fixed or variable, depending on the type of broker. The wider the spread, the more the trader pays, and when they are narrower, the lower the cost, but in this case, traders are charged a commission to make up for the broker’s fee.
NDD brokers can offer STP, ENC, and DMA accounts that feature the respective types of spread according to each. This is why some forex brokers offer different account types according to the execution model.
Commission
Commissions can be charged as a flat fee, or they can be tiered according to the trading volume. Commissions are typically charged by ECN brokers who offer 0-spread pips so that they can be compensated for their services.
Rollover, overnight or swap fees
This is a financing rate that is charged when traders hold their leveraged positions for longer after their trading session has ended. The costs will depend on several factors such as the financial instrument, the position size, market conditions, and whether the trader holds a long or short position.
According to these factors, traders are either credited or debited according to the interbank rate.
Margin Requirement
Leverage is a tool that traders can use to open larger positions without having to put the entire margin requirement down to execute the trade. The margin requirement is what the broker needs as collateral for the trade, indicated in a percentage.
Deposit/Withdrawal fees
Apart from trading fees, there are non-trading fees such as deposit/withdrawal fees that are charged as a commission when traders fund their account or take funds from it. These are charged to process the deposit or the withdrawal and if brokers charge them, traders must consider this along with the fees that their bank will charge to process the transaction.
Inactivity Fees
There are many forex brokers that charge fees on trading accounts that are left unattended without any activity for a period between 3 to 12 consecutive months. If the account shows inactivity, there is a fee that will be deducted from the account until the balance reaches zero, after which the account will be closed automatically, forcing traders to reapply if they wish to use the broker’s services again.
Conversion Fees
These fees are charged when transactions are done in different currencies. Many brokers have a certain account base currency and specified deposit currencies in which traders can open their accounts and make deposits.
If their local currency is different from the account base currency and/or deposit currency, they are charged conversion fees.
Account Maintenance and management fees
These fees are charged when the broker offers account management services, often with professional and institutional services. There are also clearance fees, depending on the broker.
Range of Markets
This refers to the tradable financial instruments that online brokers offer. Many forex brokers offer a wide range of tradable assets which are spread across several asset classes:
- Forex pairs
- Commodities
- Metals
- Energies
- Cryptocurrencies
- Stocks
- Indices
- Exchange-traded funds (ETFs)
- Mutual Funds
- Bonds, and many more.
While most forex brokers offer one or more financial instruments, some only offer forex trading.
Margin and Leverage
One of the benefits of forex trading is that traders can start trading with a small amount of capital outlay, commonly known as initial margin. Leverage is created from the margin, giving traders “trading power” when they use a margin trading account as opposed to a cash account.
When using leverage, traders can open larger positions even if they have a small initial deposit. Leverage is expressed as a ratio that signifies the amount of capital and the amount that they can trade.
Forex brokers will offer different margin requirements and leverage ratios depending on the regulations and subsequent requirements, which will differ from one country and region to the next.
Trading Platforms
Trading platforms are trading software applications that allow traders to conduct trading activities in several financial markets, perform analysis on the markets, and manage their trades. The trading platform connects forex traders to their brokers and the financial markets.
Many forex brokers offer third-party software along with developing and offering their proprietary trading platforms as well, providing traders with customizable solutions unique to their individual trading needs and objectives.
Deposit and Withdrawals
This refers to the different payment methods that the forex broker offers, allowing traders to fund their accounts and make withdrawals. Some common funding and withdrawal methods are:
- Credit Cards
- Debit Cards
- Bank Transfer
- Bank Wire Transfer
- SEPA
- PayPal
- Bitcoin Wallets, and many more.
Customer Support
Customer support and customer service refer to the communication between the forex broker and the trader when there are questions, queries, and issues to report. The forex broker offers traders a variety of different avenues through which its clients can contact customer support, including:
- Live chat functions
- Telephone
- Social Media
- Online contact Request Forms
Trading Tools, Education, and Research
This is another unique component that forms part of the forex broker’s trading solutions. Each broker will have different trading tools, educational materials, and research. It is one of the most attractive parts of a forex broker’s offering and can be a determining factor for traders to choose a broker, in combination with other factors mentioned.
Trading tools and research can refer to standalone applications or programs that the broker offers, helping traders make informed decisions and to refine their trading, including:
- Economic Calendar
- Trading calculators
- Market research
- Technical analysis
- Newsfeeds
- Fundamental analysis, and several others.
Educational materials consist of different tutorials, videos, lessons, webinars, and several other tools, materials, and resources that the broker can offer to beginner, advanced, and experienced traders.
Bonuses and Promotions
Many forex brokers offer certain bonuses, promotions, and competitions either to attract new traders to expand their customer base and increase their trading volume or to loyal and active customers either to reward them or to encourage an increase in trading volume.
Some examples of bonuses and promotions that are typically offered include:
- Sign-up bonuses
- Deposit bonuses
- Referral bonuses
- Trading competitions
FAQ
Why is regulation important?
Because it ensures that traders are safeguarded and that they are dealing with a reputable, respected broker that offers a safe, fair, and transparent trading environment.
How much do forex brokers typically charge?
Each broker has its unique trading conditions. Many brokers have a standard minimum deposit of $100 (1,431 ZAR), but others can go as low as $1 (14.31 ZAR).
Are all forex brokers regulated?
No, not all forex brokers are regulated. There are many reputable brokers without regulation, but the typical recommendation for traders is that only regulated brokers be used.
Do I need a trading plan?
Yes, every forex trader must develop a trading plant as it will help them understand the type of trader they are, what they need, and what their objectives are. This makes it easier to choose a forex broker.
Why should you use a broker checklist?
Because there are many elements to consider before choosing a forex broker. A checklist will help you remember what to evaluate and what to look for in a broker.
How risky is forex trading?
It can be very risky, especially if you do not have enough knowledge about trading and you do not use risk management tools to protect yourself in a volatile market.
Is forex trading legal?
Yes, forex trading is completely legal. However, some regions restrict forex trading because of the risks involved, while other regions restrict leverage ratios.
Should I combine forex trading with other financial markets?
All financial markets are interrelated in some way. However, it is important to know that each works differently and has its risks. Advanced traders diversify their trading portfolios by trading in different financial markets.
Top 4 Brokers
