Best High Leverage Forex Brokers in South Africa
Leverage is a very powerful tool in trading. Essentially, a forex broker can allow its traders to place orders with borrowed capital in order to control larger positions. As such, it can increase the potential returns earned by a trader. However, leverage can be a double-edged sword as traders can also dig themselves into a hole. Since the trader is using borrowed capital to place orders, they can end up losing their entire account balance through overleveraging. Furthermore, leverage is not the only thing to consider when selecting a broker to trade with. Most brokers that offer high leverage are either unregulated or have regulations from unreliable organizations.
In this review, we will look at some of the best high leverage forex brokers in South Africa. We will only review brokers that have regulations from reliable organizations and accept South African traders.
Understanding Trading With Leverage
As we have mentioned, trading with leverage allows traders to place larger orders than the capital they are investing. This increases the potential profits a trader may enjoy. However, it also increases the potential losses a trader may suffer. Understanding the risks involved is key as the trader will then adjust their leverage level depending on how much they want to risk.
Brokers usually offer leverage according to the regulatory guidelines issued by regulatory commissions in their jurisdiction. As such, a broker might offer a low leverage in one region and a high one in another depending on the regulatory laws. In South Africa, the FSCA does not put a cap on leverage. As such, brokers can implement the leverage level they see fit for their clients.
Different kinds of traders will use leverage differently depending on a couple of factors. These can include trading experience, the market a client is trading, the trading needs of the client, and the appetite for risk.
Now that we understand trading with leverage a little more, let’s look at some of the best high leverage forex brokers in South Africa.
Best High Leverage Forex Brokers in South Africa
In South Africa, Exness is regulated by the FSCA which does not have a cap on leverage requirements. As such, this broker offers one of the highest leverages to its clients. Essentially, this broker allows traders to trade with whatever leverage they desire, meaning it is unlimited. On this broker site, it is upon the trader to confine themselves from overleveraging.
With the leverage behind them, clients can invest in a variety of market instruments on the Exness broker site. These include CFDs on forex, metals, indices, cryptocurrencies, energies, and stocks. Remember that CFDs are very risky assets to invest in. Consequently, clients should only trade with a leverage level they are comfortable with as most accounts lose their investments when trading CFDs. For trading platforms, Exness offers MetaTrader 4, MetaTrader 5, and WebTerminal. The spreads on this broker depend on the account a client uses and can go as low as 0.0 pips with a commission of *$3.50 per side per lot.
As mentioned, the leverage changes depending on the location of a trader. Other than the FSCA, Exness is also regulated by the CMA in Kenya, the CySEC in Cyprus, and the FCA in the UK.
XM is another broker that offers relatively high leverage to South African traders. The clients of this broker site can access financial leverage of up to 1:1000. Traders can deploy this high leverage in a variety of market instruments. Specifically, traders on the XM broker site can trade over 1,000 CFDs on forex, indices, cryptocurrencies, precious metals, stocks, energies, and shares.
The spreads for trading on the XM platform are fairly low starting from 0.6 pips for major currency pairs. There is no commission paid on Forex and CFDs accounts. Only the Shares account on this broker site charges a commission. In terms of trading platforms, XM offers clients MetaTrader 4 and 5, alongside their XM trading app.
Unfortunately, XM is not regulated in South Africa. However, it holds licenses from other reputable organizations. These include the ASIC, and the CySEC. Regulations from multiple organizations are always a good sign from a broker.
FP Markets is yet another international broker with good standing in South Africa. For starters, this broker is regulated by South Africa’s FSCA, Cyprus’ CySEC, and Australia’s ASIC. Additionally, this broker offers some of the fastest order execution times in the market. Most orders are executed in under 40 milliseconds on this broker site. This could be because the broker provides world-class trading platforms in MetaTrader 4, MetaTrader 5, IRESS, and cTrader.
On another positive note, FP Markets offers clients a fairly high leverage of up to 1:500. Clients can deploy this leverage in a variety of markets allowing them to place larger orders for bigger potential profits. Some of the markets clients can invest in on this trading platform includes forex, shares, commodities, indices, bonds, EFTs, and cryptocurrencies.
The spreads for trading on this broker site are competitive starting at 1.0 pips for major currency pairs on the standard account. They can go even lower starting at 0.0 pips on the raw account plus a commission of *$3 per side per lot.
Pepperstone offers South African traders ECN execution on a variety of markets. Clients have access to a total of over 1,200 CFDs on forex, commodities, indices, cryptocurrencies, shares, and ETFs. Notably, the broker provides four world-class trading platforms that include MetaTrader 4, MetaTrader 5, cTrader, and TradingView. These platforms give Pepperstone some of the fastest order execution times in the market averaging 30 milliseconds (Pepperstone Group Limited) and 60 milliseconds (Pepperstone Limited).
The maximum leverage available for South African traders on Pepperstone sits at 1:400. Combining this with the low spreads offered, Pepperstone stands out. Specifically, Pepperstone charges spreads as low as 1.0 pips on the standard account. Additionally, the broker offers a raw account with spreads as low as 0.0 pips with a commission of *$3.50 per side per lot.
Finally, Pepperstone has regulations from 7 regulatory commissions in the world. While not regulated by the FSCA, the broker has authorization and supervision by the CMA from Kenya, the ASIC from Australia, the FCA from the UK, and the BaFin from Germany.
Forex.com also avails clients with a maximum leverage of 1:500 that they can use in various markets. Clients can trade CFDs on forex, indices, stocks, commodities, precious metals, and cryptocurrencies. In total clients can trade over 5,500 instruments, greatly encouraging the diversification of portfolios.
The fees for trading on this broker site are low with the standard account charging spreads as low as 1.0 pips. Clients can also trade on the commission account that primarily charges a commission of *$3 per side per lot and ultra-low spreads starting from 0.0 pips. The trading platforms available to clients include MetaTrader 4, MetaTrader 5, WebTrader, and Forex.com Trader.
In terms of regulations, Forex.com is reputable with supervision from great regulators. Specifically, it is supervised and regulated by the CySEC in Cyprus, and the ASIC in Australia, among others. While regulations alone are not enough, they are still the most important feature to look at in a forex broker.
Vantage Markets allows its clients to speculate in over 1,000 market instruments that include CFDs on forex, indices, precious metals, commodities, energy, ETFs, shares, and bonds. This broker offers one of the most diverse collections of instruments to South African traders. Additionally, it offers one of the highest financial leverages in the market. With this broker, clients can access a leverage level as high as 1:1000.
The spreads for trading on this broker site are fairly low starting at 1.4 pips for major currency pairs on the Standard STP account. An ECN account is also available that charges clients a low commission of *$3 per side per lot. The trading platforms available to choose from include MetaTrader 4, MetaTrader 5, ProTrader, and WebTrader.
Finally, let’s look at how Vantage Markets’ activities are supervised in the market. Well, this broker is regulated and supervised by the FSCA in South Africa, the CySEC in Cyprus, and the ASIC in Australia. These are great regulators whose goal is to maintain a fair trading environment for both investors and brokers
Closing out this list is Admiral Markets. This broker holds a license from the FSCA among other organizations that include the CMA, the FCA, and the CySEC. Traders should only trade on regulated broker sites as such companies have organizations which protect both the interests of the brokers and the traders.
The maximum leverage on this broker site sits at 1:500 which is more than enough for most traders in the market. Clients of this broker site can use this leverage to place orders in a number of market instruments. The platform gives clients access to assets in the forex, commodities, indices, stocks, ETFs, and bonds markets.
The trading platforms available to choose from include MetaTrader 4, MetaTrader 5, WebTrader, and Admirals Mobile App. These are great platforms suitable for both beginner and experienced traders. On top of that, the broker does not charge hefty fees when trading. Here, the spreads depend on the account a trader uses. The Trade.MT5 account has spreads starting from as low as 0.5 pips on major currency pairs. The rest of the accounts have spreads starting from 0.0 pips with commissions a *$1.8 to $3 per lot commission paid depending on the account.
In terms of regulations, Admiral Markets holds licenses from the FSCA in South Africa, CMA in Kenya, the FCA in the UK, and the CySEC in Cyprus.
As we have seen, leverage is a double-edged sword. While it allows traders to amplify their potential profits, it also amplifies the potential losses. It allows traders who are confident in their trading strategies to control larger positions in the market than they would while using their capital alone. This is the main advantage of using leverage when trading.
However, access to high leverage is not the only thing a client should look at when choosing a trading partner. Most importantly, regulations from a reputable organization are key. Additionally, traders should look to trade with brokers that offer low spreads, world-class trading platforms, and a great collection of market instruments.