This article will be reviewing some most common standards to compare and choose the best forex brokers in South Africa market. Because each broker has its own strong and weak points, not all are suitable for traders and then, there needs to be the common standard when it comes to compare the brokers to each other.
HOW TO COMPARE
If you want to choose the top forex brokers 2018 in the market, you have to compare them to each other and then pick up the ones that you believe it is the best. However, there are also some standards used to compare brokers, which can be applied in South Africa market:
- Regulations that are set by both major and minor regulators.
- Trading conditions.
- Account types.
A broker which is regulated and managed by major regulatory agencies is often trusted and reliable. Its licenses are mostly from trusted sources such as FCA, FSCA, CySEC & ASIC. Traders will have safe trading environment to work and their funds are also protected.
When we talk about the reputation of a broker, we have to check these common things: regulation, trade execution method, and client fund management
Regulation is one of the most important parts in the market. If the biggest forex brokers are regulated by more than one major regulator, it could show that the broker gains more trust and integrity from their governmental regulatory agencies.
Trade execution methods are well considered. We have to check if the execution includes a dealing desk, or there is any conflict of interest between brokers and traders. If there is financial incentive given to broker to have you lose your trades, it could be said that the broker is not good and less reliable.
A good broker knows how to make the funds safe for traders. It seperates the funds into many different accounts at major banks in the local jurisdiction. By doing this, traders can avoid the risk of bankruptcy. One broker for example is Exness >>> Exness reviews.
The trading condition
There are 2 parts of trading conditions that we consider: spread and leverage.
Spread is defined as difference between the buy/sell price. We can say it is wide when those 2 prices are far from each other, or we can say it is tight when those are close to each other. Tight spread means low trading cost, which is highly prefered by most traders. Spread is measured in pips. For example, the spread is 16 pips (which is wide) or 0.3 pips (which is tight). Spreads are different in many brokers.
Leverage is an amplifying tool since it helps traders increase the size of trades by many times. Because the movements of the market are very small, it needs to be leverage for individual retail traders to participate in the business. The format of leverage is such as 550:1, which means the trade size could be amplified up to 550 times of the original size. Of course, each broker has different leverages, which vary among the traders based on their experience.
The account types
Because it is regular account, there are real trading conditions, real price, real market and real money. Your balance will be affected when there is any transaction.
Because it is trial version, all things here are not real. There is no risk or profit. It is a good place for beginners to practice trading and learn more about the forex.
After many years trading with big and small brokers, we have finally pointed out 3 most common standards to choose the best South Africa brokers.