Learn what is online trading and how to trade

What is online trading and how to trade in South Africa? According to iforex.com, ‘online trading’ refers to buying and selling financial products through an online trading platform. The trading platforms can be downloaded directly and installed to your mobile phone or directly from the internet.

ALSO READ: What is forex trading and how does it work?

Please note that online trading in South Africa is legal and anyone above the age of 18 years old can sign up with a South African broker and start trading.

Products that people can trade includes Forex, Indices, Commodities and Shares. We often hear news anchors talking about JSE and the markets. If you are a beginner in the financial industry, it’s important for you to start reading about it and understanding how JSE works.

What is JSE?

JSE Limited, formerly known as the JSE Securities Exchange and the Johannesburg Stock Exchange, is Africa’s largest premier exchange. Companies looking to grow their businesses financially, often list their shares on the JSE.

At JSE, stocks are purchased and sold, as reported by InvestorWords, it is the largest stock exchange on the entire African continent and is primarily dominated by mining companies. This is due to the fact that it was originally established in 1887 by the mining industry as a way to raise funds.

The JSE offers trading of a variety of Derivatives, including Futures and Options on Equities, Bonds, Indices, Interest Rates, Currencies and Commodities.

What is Forex?

The foreign exchange market (Forex, FX, or currency market) is a global decentralized or over-the-counter (OTC) market for the trading of currencies. This market determines the foreign exchange rate. It includes all aspects of buying, selling and exchanging currencies at current or determined prices. In terms of trading volume, it is by far the largest market in the world, followed by the Credit market.

According to fxcm, forex trading websites in South Africa, the forex market is the largest, most liquid market in the world with an average daily trading volume exceeding $5 trillion.

How to get started with online trading South Africa?

Some Forex trading or online trading South Africa websites claim that trading online is simple. They advise online trading beginners to open a free demo account so that they can understand how buying and selling currency works. After a broker is comfortable with his/her trading skills, they then move to a real account where they can deposit and trade with real money.

Online forex trading involves two currencies. You often hear on the news when they compare South African Rand (ZAR) against the US Dollar (USD). The most traded currency pair in the world is EUR/USD. In this case, the EUR is the base and the USD is the counter.

When you trade online, you predict on the value of a currency against the other. For example, when you see a price quoted on your trading platform, the price is how much one ZAR or EURO is worth in USD.

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