If you’re just starting out in the world of online trading, you’re probably optimistic about the market’s potential. If you know what you’re doing and make smart trades, online trading with CFDs, stocks, FX, indices, commodities, and cryptocurrencies may be very lucrative.
Trading, whether for price appreciation or to short sell an asset, requires meticulous preparation. You, as the trader, must do your own research before making any buy/sell choices with your chosen assets. To prepare beginner traders for online trading in South Africa, we show five easy ways to get you started.
1. Sign up with a regulated broker
The first step, and arguably the most important, is to open an account with a broker that is regulated by the Financial Sector Conduct Authority (FSCA). Leading South African forex brokers, like IFX Brokers, will have licenses from the FSCA, which is the primary regulator of the financial markets in the country.
Trading with an FSCA-regulated broker will ensure that you have secure deposit conditions, and a transparent trading environment when trading on the volatile Forex market.
2. Set up a balanced portfolio
Every investor or trader should evaluate their portfolio’s individual holdings. While tech stocks may be all the rage right now, you should be wary of their extreme volatility.
You may protect yourself from potential losses by using a variety of tactics, including maintaining a well-balanced investment portfolio.
Capital allocation is a very personal decision that eventually has significant consequences. Think carefully about how to allocate your holdings so that you may take advantage of price, volatility, and volume while protecting yourself from market downturns.
3. Assess your own risk profile
As a trader, you probably enjoy taking calculated risks. Trading financial products on a regular basis requires a certain level of risk tolerance. In contrast, investors tend to be more cautious because their investments are made with the future in mind.
The willingness to take risks, however, should not replace careful planning. You may get serious about getting ready once you’ve decided which financial instruments to use (depending on your risk tolerance).
4. Set price limits
The market can turn against you in an instant. This is a crucial realisation to make early on in your trading career.
In this regard, brokers like IFX Brokers’ robust trading platforms, MetaTrader 4 and MetaTrader 5, make it simple for you to place limit orders as opposed to market orders. For those unfamiliar, limit orders are those placed to purchase or sell at a price that cannot be lower than or higher than a (limits).
Market orders, on the other hand, indicate a preference to purchase or sell at the current market price. By using these potent trading tools to your advantage, you may naturally exert more control over price. Maintain a trading log. Get better by analysing your weaknesses and expanding on your strengths.
5. Choose the best trading platform for your needs
There is not one standard style of trading platform. Certain platforms are unquestionably superior to others.
Think about the potential problems that could arise if you choose a trading platform that does not offer the assets you wish to trade, does not provide enough data (such as charts, graphs, financial reports, and market data), or does not execute at the prices you wish to buy or sell.
Also Read: What are the best forex trading strategies?
