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How to Start Forex Trading in South Africa

Forex trading is a lucrative investment in South Africa. The South Africa Rand (ZAR) is among the most traded currencies in the world, making Forex trading in South Africa a great deal. Over R120 Billion Rand are traded daily in South Africa. However, it is worth noting that investing in Forex is associated with some risks. Trading in Forex in South Africa is legal. Ensure that the Forex broker that you select is regulated by the FSCA.

What is Forex Trading?

Forex trading involves speculating the prices of currencies and then trading global currencies in the Forex market with the intention of making a profit. Forex trading involves the exchange of one currency for another to make a profit. Currencies are traded as pairs and against each other. The trade is facilitated by global and central banks. For instance, you can trade USD and EUR.

You buy a currency when you speculate that its price is going to rise against the other currency. On the other hand, you sell a currency when you speculate its price is going to drop. The difference between the price you bought the currency and the price you sold the currency can either be a profit or loss.

How Forex Trading Works in South Africa

Forex trading in South Africa is regulated by Financial Sector Conduct Authority (FSCA). The FSCA makes sure that South Africans are secure from financial fraud. All companies providing financial services are regulated by FSCA. All financial companies are required to keep their money separately from that of their clients. Also, these firms are audited regularly to ensure that clients’ money is not misused.

To avoid a lot of costs on a currency conversion, if you are a South African trader, then it is best that you have a Rand Trading Account (ZAR). With a ZAR trading account, funds are kept in local banks and it also becomes easy to withdraw funds through South African banks. When funds are kept in a local bank, in case a broker becomes bankrupt, his account can be frozen and FSCA will help you recover your funds.

Read also: Best investment banks in South Africa.

How the Forex Market Works

The Forex market is the largest and most liquid financial market worldwide. There are over 120 Billion Rand traded daily. And since Forex trading involves speculating currency prices, a Forex trader will buy currencies at the currency market prices expecting to sell them when the currency prices rise. When a trader sells a currency when the market prices are higher than the buying price, he makes a profit. If he sells a currency when the market prices are lower than the buying price, he makes a loss.

The Forex market is highly volatile and prices keep on changing. It is this volatility that helps traders to make profits. Traders get access to the Forex market through Forex brokers. The role of Forex brokers is to provide a trading platform software and access to the market for clients and traders to trade.

Best Forex Brokers in South Africa

The following are some of the regulated Forex brokers in South Africa.

1. Ava Trade

Ava Trade is a Forex broker in South Africa that is regulated by ASIC and FSA. You need a minimum deposit of $100 to start trading. It is one of the oldest Forex brokers in the world. You can use their app AvaTradeGo for social trading by interacting with the best traders in the world through the app. You can invest in AvaTrade through JSE for only 12 hours a day. It is free to open an account while the commissions are low.


FXTM is a Forex broker in South Africa that is regulated by CySec and FSCA. To start trading on the platform, you need a minimum deposit of $10. It comes with two trading desks, MT4 and MT5. You can use it also to trade in crypto and other 250 instruments. It is free to create an account and you get a demo account after signing up. You will be charged commissions on trades. It has customer support available 24/7.

3. XM

XM is also an excellent Forex broker in South Africa that is regulated by IFSC, CySec, and ASIC. The minimum deposit you need is $5. The platform does not charge trading fees. You can trade over 1000 instruments through the platform. You can trade over the mobile using platforms like MT4 and MT5.

4. FP Markets

FP Markets is also a good Forex broker in South Africa that is regulated by ASIC and CySec. You need a minimum deposit of $100. It has low trading fees and you can use MT4 and MT5 trading desks to trade. It has an excellent customer support and comes with educational tools. FP Markets has developed a new and improved platform that comes with advanced functionalities.

5. ThinkMarkets

ThinkMarkets Forex broker is regulated by ASIC, FCA, and FSCA. You need a minimum deposit of between $0 and $500. It has low trading fees and account activation takes 24 hours. The platform comes with an analytics tool that helps you to select the best currencies and stocks to trade.

Risks in the Forex Market in South Africa

There are many risks associated with the forex market in South Africa. It requires skills, discipline, and education to make profits in the forex market. Some of the risks in the forex market include:

  • Volatility. Political and economic crises lead to the rise and fall of the prices of currencies. This makes it very hard to predict the prices of currencies.
  • Unregulated brokers. Make sure to use only the regulated brokers to avoid losing money. In the event of a dispute, regulated brokers can solve disputes amicably.
  • Trading fees. Some Forex brokers charge high trading fees and withdrawal fees. Make sure to research a Forex broker before you can commit yourself. 

Read also: Best money management apps in South Africa.

Summary of How to Start Forex Trading in South Africa

Before you can start Forex trading, make sure you understand how the market operates. Also, make sure to use regulated Forex brokers only to avoid getting scammed. Also, it is best that you use a demo trading account before you can start trading, to understand how the account works. Also, make sure to do technical analysis, data analysis, and market economics so that you can decide the best currencies to choose.

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