5 Reliable Online Forex Brokers for African Traders
More and more Africans are taking to online trading of currency and other derivative instruments such as stocks, commodities and cryptocurrencies to earn a living. However, a major challenge most African traders face is getting reliable Forex brokers to deal with.
Unfortunately, the majority of Forex brokers hardly accept traders from Africa. African traders are therefore on a constant search of credible platforms to fulfill their needs. And very often they fall victim of fraudsters who parade themselves as Forex brokers.
If you are from Africa and you are desirous of trading the global market but are constrained because you have not been able to get a credible Forex broker to use; here is a list of online brokers that accept African traders on their platforms.
This post addresses the need of new traders or experienced traders who are looking for reliable online brokers to use for their online trading activities. If you are new to online trading and seeking the knowledge to get you started, check out this other post: Online Trading of Financial Assets: It’s Not Be As Difficult As You Think
Three Types of Brokers
Many people really don’t realize that all brokers are not the same. And most importantly, the type of broker you deal with, to a very large extent determines the kind of trading experience that you will have.
There are three classes of Forex brokers:
The first and most common type of Forex brokers are the dealers or market makers. This type of broker helps the trader route his trade to the market. Thus, they operate the Dealing Desk model.
They collect your order, process it and route it through the market. What this means is that when you are buying, you buy from the broker and when you sell, you also sell to them. Trading via a Dealing Desk Broker or market maker offers some benefits. The most important of this is that you are able to trade in really small lot sizes.
However, market makers take the opposite side of your trade and may not likely hedge. What this simply means is that they gain when you lose money and lose money when you gain. Would such a broker protect your interest? Not likely at all.
The other type of Forex brokers is the STP or Straight Through Processing Broker. He is a non-dealing desk broker and what this means is that the broker routes your orders directly to the liquidity provider.
Liquidity providers are usually financial institutions that play in the inter bank market. They include the Banks, Hedge Funds and Mutual Funds. How the STP broker makes money is on the spreads.
Thus the more you win as a trader, the more money the broker makes. If you are losing money, the broker is very likely to lose money also. So it is in his best interest that you make money. However, you may not be able to trade in small lot sizes.
The other type of non-dealing desk broker is the ECN (Electronic Communication Network) Broker. The ECN broker not only gives the trader routes your order directly to the Liquidity Provider but also allows you to interact with them on their network.
The ECN broker does not earn money on the spread but charges the trader a commission on all trades. So whether the trader makes money or not he is entitled to his commission.
So what type of broker should you be using? The one whose business model meets your trading goals! However, it’s important that we add that to trade with an ECN broker, you have to be experienced.
How to Choose An Online Forex Broker
Here are some of the things you have to watch out for:
So many online Forex brokers are not regulated, particularly in Africa. Dealing with an unregulated financial services provider puts your funds at risks. Since there is no authority to report to in the event of an infraction, you and your money are at the mercy of the broker.
History and Reputation
It is in your interest to choose a Forex broker that has been around for sometime, has positive reviews by clients, and has the financial muscle to do their. When you deal with a fragile institution, your investment is likely to go down when the institution goes down.
Account Type Offered
Choose a broker that has a variety of accounts that caters for different skill levels: beginner, intermediate and advanced. These brokers offer demo accounts with virtual money that traders can use to learn and get used to the trading environment before commuting real money to trade.
we selected online brokers that offer a variety of products that appeal to the interest of individual traders. These include stocks, currency, commodities, stock indices, cryptocurrencies and ETFs.
Minimum Deposit Required
To many traders, the minimum they will need to open an account is a very important factor. Some brokers accepts as little as USD5 while others can go as high as USD1000. The firms we list here accept minimal sums for account opening, some as little as USD10.
Local Office or Support
Particularly for African traders, it is important you deal with a broker that has a local office or representative in your country. This will help to facilitate support and technical assistance where and when needed.
Best Online Forex Brokers for African Traders
Now here are our list of best online Forex brokers for Nigeria and African traders and those
#1. Fintrust Managers
Fintrust Managers is an ‘A” book online broker with a strong presence in Africa and Europe. It offers access to the global financial markets with a robust platform that allows users to trade Forex, stocks, commodity CFDs as well as cryptocurrency and ETFs.
Fintrust Managers offers financial services to clients around the world and complies with the regulations of each country where they have a presence.
With as little as US$20 one can open an account and start trading on the fintrust platforms. These platforms can be accessed on desktop, mobile app and the web. And the best part, their flexible deposit options allows their clients to fund their accounts in their domestic currency and trade in foreign currency.
For a reliable trading platform that offers low and flexible deposit options, low spreads, no hidden fees, leverage of up 1:1000 and a variety of instruments, then check out fintrust managers.
Fintrust Managers have their offices in Nigeria and offers their services globally.
Open account with fintrust here.
Formerly binary.com, this company has a robust 20 years history of providing trading platforms and services for over one million traders worldwide.
This company delivers its trading services via three platforms namely: DTrader (a web based platform), MT5 and DBot (an automated trading system). This is in addition to Binary.com’s Smart Trader.
Deriv is licensed in multiple jurisdictions including Malta, Lauban, British Virgin Islands and Vanuatu. It offers tight spreads and minimal trading fees. And with just USD5, one can open an account and start trading over the 100 products on offer spread across currency pairs, binary options, stock indices, synthetic indices and commodities.
Deposit and withdrawal of funds is easy and can mostly be achieved within 24 hours. Options available include bank wires, credit/debit cards, e-wallets and cryptocurrencies like Bitcoin, Ethereum, Litecoin and Tether.
Deriv has a large network of Affiliate and IB Managers in Africa and they are available to provide you with support.
#3. Hot Forex
This online Forex broker is based in Cyprus. It is a brand name of HF Market (Europe) licensed by the CySEC. It also has some cross border licenses authorizing it to offer trading services in these jurisdictions including Dubai, England, South Africa and more.
Thus, Hotforex offers services in most parts of the world including Africa with representative offices in Nigeria and Kenya.
The company was set up in 2010. It boasts of having created over 2 million accounts, employed over 200 people globally, supports more than 27 languages and has over 35 industry awards in its belt.
Hotforex is an STP broker, offers 17 trading tools and over 150 instruments in Forex and CFDs. This includes indices, metals, energy, stocks, commodities, bonds and cryptocurrencies.
Minimum amount to open an account and trade through this platform is USD5. They offer fixed and floating leverage which is good for traders with smaller accounts. With about 6 account types, traders have a variety of options with the benefit of negative balance protection.
Visit Hotforex to create an account
Founded in 1998, Alpari is one of the world’s oldest Forex brokers with a presence in Africa. They have local presence in Abuja, Nigeria and offers and offer friendly trading platform support, competitive spread, and options to make deposits in local currency.
Alpari is an ECN broker with very low fees and offer a wide range of instruments including Forex, indices and spot metals. New users can open a trading account with zero amount.
Alpari is fully licensed and regulated by the Financial Services Commission of Mauritius.
FXTM has a very high rating in Nigeria. It’s a trusted broker that has a cross border registrations in UK, Cyprus, and Belize.
FXTM offers a variety of account types and allows deposit in your domestic currency. The minimum amount for opening an account for its Nigerian customers is NGN2000 (or USD5). Deposit and withdrawal of funds is easy with many options including cash deposit, debit and credit cards
Apart from trading Forex, FXTM also offers CFDs in commodities. They also provide free resources to help their learn and trade better. These resources come in the form of news, commentary, analysis, articles, eBooks, and webinars.
FXTM has offices in Lagos and Abuja, Nigeria. It worn the best broker awards in Nigeria in 2020.
Someone once told me: “If you choose the wrong broker, it’s got to make you a lot broker”. You see there are a lot of scammers out there, so you have to exercise care when deciding on a Forex broker to deal with.
Always know that trading in financial instruments, much more so, derivatives is risky. Don’t compound the risk by dealing with the wrong broker. Define your objectives clearly. Consider the options and do your due diligence and select the Forex broker that best meets your needs.
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