Nowadays, there are
many forex brokers in the market, yet we are not sure which are the best for
us. To find out the best broker for each trader, we have to use some standards
to compare them to each other. This article will be showing standards to choose
the best forex
brokers in South Africa.
COMPARE
After years trading
forex with all kinds of brokers in the market, my team has finally found that
in order to choose the best forex broker in a market, we have to compare them
to each other with certain standards:
Regulation
Trading conditions
Types of account
These
brokers are also rated based on regulation, platform choice, and trading
conditions for the clients.
REGULATION
In common, regulated brokers follow the rules which are set by
governmental regulatory bodies like the FCA, FSCA, CySEC & ASIC. This makes
it safe for all traders who work with these brokers because they will create
the safe trading environment and protect all the funds for traders as well. A
broker with more than one international license is believed to have more trust
and integrity.
REPUTATION
How could we trust a broker? These are the standards to see if we could
trust a broker or not: trusted regulation, trade execution method, and client
fund management.
Trusted regulation
means a broker should be regulated by the major governmental regulatory bodies.
It can show that they gain a high level of trust from these agencies and so,
they are very safe and reliable.
The other main
factors we have to check are: how the broker is executing your trades, if a
dealing desk is involved in the execution, if there is any conflict of interest
between traders and the brokers, if the broker receives financial incentive to
have you lose your trades… If such things happen, that broker is definitely
untrusted. One of the most reliable brokers is Exness => Exness sign up.
One more important
thing that a good broker should do is to separate all the client funds in
different accounts at major banks in the local jurisdiction. Why so? Because it
will protect traders in case of the bankruptcy of the broker.
CONDITIONS
Spread:
It is measured in
pips. For example, 15 pips wide or 0.1 pips tight. Why is it wide or tight?
When the buy and sell price for any currency pair are far from each other, or
close to each other, the spread will be called wide (far from each other) and
tight (close to each other). Different brokers have the different spreads on
pairs. In order to maximize the profit, traders often work with brokers which
offer the tightest spreads.
Leverage:
It is used to
amplify the size of trades. Why do traders need this? Because the movements in
the market are so small that it allows to earn very little profit. If there was
no leverage, individual retail traders could not take part in this business.
For example, a leverage is 200:1, it could be increased up to 200 times by
traders. Leverage is various and based on the experience of traders.
Account types:
There are now fewer
types of account than in the past, so most brokers just have: Live or Real
accounts, the Demo accounts, and Swap-free account. They hardly have managed
account.
LIVE / REAL ACCOUNTS
As
its name, these accounts use real money to earn real profit. Your account
balance is affected right after a transaction.
DEMO ACCOUNTS
Because
it is fake account, it has neither risk nor profit. So it is the time to try
the trading platform, customer service, research area, and trading conditions.
In
conclusion, if you want to choose the best forex brokers in South Africa, you
should follow these standards before.
For Thai traders, click here for best forex brokers in Thailand
