Provident Trade Review 2023
Provident Trade is a South African broker based in Johannesburg, SA. They claim to be licensed and have a good-looking website that can fool anyone into thinking they are trustworthy.
A nice website can give an impression of the broker being very professional and reliable. So it’s a common tactic among fishy brokers to deceive people. Let’s see how reliable they are in my Provident Trade review:
Did You Know?
Provident Fund is an employee’s benefitting team. It is basically the government-managed retirement Savings Scheme. It aids employees by saving part of their salary in the pension fund every month.
Provident Trade License and Regulation
Provident Trade claims to be a product of Red Pine Capital (Pty) Ltd. When I checked the register of FSCA (Financial Sector Conduct Authority), I discovered that Red Pine Capital (Pty) Ltd. holds a license to function as a forex brokerage.
However, because FSCA doesn’t specify the trading name of the company, I couldn’t determine whether Provident Trade is really a product of Red Pine Capital or is a clone firm.
This is why I don’t trust brokers holding an FSCA license. You can never determine whether a specific firm is a real deal or a clone firm.
Because it’s impossible to find out whether Provident Trade is unregulated or not, I wouldn’t recommend trading with them.
FSCA doesn’t give the trading name of the firms it regulates. So it’s impossible to determine whether Provident Trade is a licensed company or an unlicensed one. I don’t recommend trading with them.
There are many scams in the forex industry and so, strict financial regulators exist in many regions such as the US and Europe. These regulators impose heavy restrictions and laws on forex brokers (and similar service providers) to ensure that the broker doesn’t act against the interests of its client.
However, unregulated and unlicensed wouldn’t have to follow those restrictions. They can act against your interests (such as steal your data) and get away scot-free.
On top of that, regulators like FCA offer insurance compensation in case the broker steals the funds of their clients. For example, FCA can give you up to £85,000 if an FCA-regulated broker steals your funds. You don’t get such facilities with unregulated brokers. This is a strong reason why I don’t recommend trading with an unregulated forex broker.
Provident Trade Trading Conditions
You should always check the trading conditions of a forex broker before doing business with them. Let’s see what are the trading conditions of this broker:
To be honest, the best trading platforms available in the industry are Metatrader 4 and 5. Almost all reputed forex brokers use these platforms because they offer a ton of features.
Read more: GT365
The people behind Provident Trade know this too and they have kept their trading platform MetaTrader 5. It’s one of the few positive things I found while writing this review.
While the trading platform impressed me, the minimum deposit requirement took away that impression immediately. The minimum deposit requirement for Provident Trade is $500, which is very excessive.
Many forex scams keep their initial deposit requirement high which allows them to grab a lot of funds immediately. Such brokers are aware of their pathetic services and so, they don’t give you a chance to test out their services beforehand. Instead, they force you to make a big financial commitment. In case you decide to discontinue availing of their services, they will steal the huge deposit you had made.
It’s a common strategy among shady forex brokers and that’s why I don’t recommend trading with such brokers.
Such an excessive initial deposit requirement indicates that Provident Trade could be a scam.
Leverage and Spreads
Provident Trade offers an astonishingly high leverage ratio of 1:500. Even for experienced traders, this leverage ratio is unsafe.
High leverage is usually a sign of a scam. This is why financial regulators restrict their brokers on how much leverage they can offer to their clients. For example, the UK-based regulator FCA doesn’t allow its brokers to offer a leverage ratio higher than 1:30.
High leverage ratios can wipe out all of your earnings and even put you in debt quickly. They are very risky, especially if you’re a beginner.
While trading with this broker, the lowest spread I got with the EUR/USD pair was 1.5 pips. This is substantially higher than the industry average of 0.5 pips. In fact, reputed brokers keep their spreads as low as 0.1 pips.
Provident Trade offers a very risky leverage ratio and excessive spreads. It doesn’t seem safe to trade with this broker.
Provident Trade Payment Methods and Charges
Provident Trade offers plenty of payment options, another positive for a broker that could be a clone firm.
They let you fund your account with Skrill, Neteller, Wire Transfers, credit or debit cards, QIWI, and WesternUnion. In my opinion, it’s best to use bank cards because they let you file chargebacks for 540 days from the transaction date.
There’s no minimum withdrawal requirement with this broker and claims to process withdrawal requests within one to five days. Most regulated brokers take around 48 hours to process withdrawal requests so Provident Trade lags in that regard.
Provident Trade doesn’t charge any withdrawal fees but they do mention a fee for Wire Transfer withdrawals. However, they don’t specify how much they charge, which is quite shady.
When a broker does not specify how much they charge, they can use hidden fees to drain you of your funds. This broker also charges you an inactivity fee if your account remains dormant for 12 months. It will charge you $25 for the first year and then $25 every 6 months after that.
For a shady broker, Provident Trade has quite a generous inactivity fee.
Provident Trade claims to offer plenty of bonuses to its clients.
Bonuses in the forex industry are notorious as they allow the broker to complicate the withdrawal process for the user. The funds you receive in a bonus always belong to the broker, not you.
A similar thing happens with this broker. Here, you will have to execute $100,000 for every bonus dollar you get. This is a nearly impossible demand to meet and it complicates making withdrawals considerably.
Is Provident Trade a Scam? Most Probably
The forex industry attracts a lot of scams and they are of various sorts. Some scammers tend to give an unsolicited call and claim that you’re eligible for a random bonus. Others would run ads on the internet claiming to offer attractive deposit bonuses or easy profits.
Creating a website and filling it with lies is very easy. And these scammers target inexperienced traders too. Usually, these brokers operate from offshore areas such as St. Vincent or the Commonwealth of Dominica. They operate from such areas because these places don’t have financial regulators like the US or the UK. So they don’t have to follow any strict laws and can easily steal the funds of their users without facing any legal repercussions.
You should always check a broker’s regulations and T&Cs before trading with them.
As it’s impossible to verify the regulatory claims of Provident Trade, I can’t recommend trading with this broker.
Provident Trade Review: Conclusion
Because I can’t check whether this broker is a clone firm of a regulated broker or not, it’s impossible to recommend their services. Moreover, the excessive minimum deposit requirement and the dangerous leverage ratio make it quite a suspicious broker.
There are many shady brokers in the forex industry like Provident Trade. And they keep growing. The best way to stay wary of such brokers is to spread the truth about them so their schemes would fail before they even start.
If you know someone who’s interested in forex trading, share this article with them. They should know the truth about such scammers.
As FSCA doesn't give the trading name of its licensed firms, I can't verify if Provident Trade is a licensed company or a clone firm. Moreover, it has a very high minimum deposit requirement and risky leverage ratios. I don't recommend this broker.
- MetaTrader 5 platform
- Unverifiable license
- Excessive minimum deposit
- Dangerous leverage ratio
- Risky Spreads