Which online trading platform?
4 stars based on
Garth Mackenzie Posted on: Whilst the barriers to entry are not particularly high, the world of trading in the financial markets can be quite intimidating to those who have never been exposed to this industry before.
Read all you can before you put your money on the line. Before you put your hard earned money into a trading account, start out be reading a few books on the subject of trading. Despite the condescending title of the book, it actually contains a great deal of information on the starting points of trading and will teach you some of the lingo and jargon that is used in the trading world.
The book is pages long, and can be bought online for around R This will be money very well spent and the cost of this book is only a fraction of what it may cost you if you start trading without proper knowledge. There are numerous seminars and webinars available to novice traders.
The JSE runs a variety of evening seminars for those who are interested in investing and trading in stocks. A number of brokers best cheap online stock trading platform south african offer beginner seminars and webinars for those getting started.
There are many products available to trade. From currencies, to stocks, commodities, indices and bonds, there are thousands of potential products that have a price that moves, and all of these are potentially tradable.
And then there are derivatives of each of those products too. You will need to decide which instruments you are interested in trading. For the retail market, stocks and stock indices as well as currencies and derivatives thereof are generally popular to trade, because the amount of capital required to trade those products is affordable.
Focus on one instrument when you get started and learn how its price moves and how the mechanics of that product work. Once you have an understanding of that product, then perhaps you can venture further out to try different products to trade.
In terms of the South African market, physical shares or share CFDs would be my advice in terms of which products to start off with.
You will then need to pick a small group of shares that you wish to focus on. CFDs are much cheaper to trade than physical shares, and hence this would be my first choice of product to trade.
But it is important that you understand how CFDs work before you get started. It is a 2-hour evening course and it costs R per person. Each evening, he would bring the newspaper home and we selected a few shares that we decided to follow. I then hand drew charts of those share prices and we mock traded with R of fictitious money. Those were in the days before internet trading was available to the general public. These days, many brokers have developed dummy accounts that best cheap online stock trading platform south african you my binary options free demo accounts practise trading online before you apply your real money to your trading account.
This is a great way to get started, and to get to understand how the market works, as well as what commissions and best cheap online stock trading platform south african you will need to pay on each trade.
Spend a while trading in the safety of a dummy account before you put your precious capital on the line. Also remember that dummy trading is best cheap online stock trading platform south african the same as trading for real, because the emotions of trading with real money are very different to trading with play-play money.
But nonetheless, this is a good place to get started. IG Markets offers a two week demo on their trading platform with R of play-play capital to allow you to feel your way around the market and the platform. Global Trader also offers a free demo account that allows those starting out to test the waters in a safe environment before diving in.
But the question I am often asked is how much is a decent amount of capital to start with. The reason I say this is because all brokers offer a minimum trading commission on each trade and this amount is fixed, irrespective of your account size. Hence, the smaller your account, the larger will be the proportional amount of the fixed trading cost per trade.
The base fee is generally around R per trade, and then brokerage is added on a sliding scale if the total cost comes to more than the minimum of R You also need to take into account that there will be some losses along the way.
It is inevitable that some trades will go wrong. You need best cheap online stock trading platform south african ensure that the amount of capital you have in your account is sufficient that you can weather a few bad trades.
Start out small and learn the intricacies of trading properly before committing too much capital to one trade. Ideally, the trading capital that you start with should be money that you can afford to lose without it affecting your lifestyle.
Most brokers offer an online platform to trade with. Some of these platforms are really excellent and have improved substantially over recent years.
They incorporate a lot of information as well as interactive charting functions that allow you to do some of your own analysis of share price charts.
As a start out trader, the software provided by your broker will probably be sufficient. As you develop your trading skill, you may wish to invest in additional software such as a purpose built technical analysis package to help you do more detailed analysis.
Be realistic about your expectations. Be aware that trading is not easy. There are many unscrupulous providers out there who advertise trading as an easy road to riches.
I best cheap online stock trading platform south african vouch for this. Hence the odds of being successful are not high. But if you are persistent, you can become one of those few people who gets to truly enjoy the freedom and satisfaction that comes with being a successful trader. Posts on this thread Click on best cheap online stock trading platform south african 'Post' button to make a comment, or use the Arrow next to a Post to reply to that specific post.
In the mean time, the trick is to try not lose too much money in the process, whilst learning. Thanks for the heads up re the Trading for Dummies. I'm still reading before taking the plunge. Thank you for taking the time to share this with us Garth, it's appreciated!
For every 1 book you read on trading, best cheap online stock trading platform south african 4 books on money management. Thank you for the advise right now I am reading The Crunch-how greed and inocompetence sparked the credit crisis by Alex Brummer, best cheap online stock trading platform south african amazing how people are ignorent when it comes to other people's money. Hi Garth, It's true, a journey of thousands miles begins with one step.
Garth's course convinced me that i had to. Garth, thanks for all the great course, sound advice and super web site. Thank you for the wealth of information.
This is a good start in terms of reading material.