Maybe you have heard of online trading before? At the office, in class, with your family? This is normal because it is becoming more and more accessible to individuals. Indeed, online trading South Africa gives the possibility of making ends meet or even making it a profession.
In this article, we will correctly tell you about what is online trading in South Africa, the important things to know and the essential information to know before starting to trade online.
Online trading definition
Online trading consists of buying and selling assets through an online trading platform. Anyone wishing to invest in trading can download an online platform for free and use an internet broker.
Trading therefore boils down to anticipating future prices thanks to past prices by taking advantage of price volatility to make money between the moment of purchase and resale. It is also possible to make money by selling an asset that you do not own.
Trading is a very serious profession, on which you need a lot of concentration and control of your emotions. Without knowledge, it is impossible to actually make money because the luck factor has no place in trading. If a person wants to learn and get started, it’s very easy! The only step is to create an account on an online platform.
Online Trading: What is Forex?
The Forex is the trade of currency exchange of a country or region against another. For example exchanging euros for dollars. It is the most popular market in online trading. It is open 24 hours a day, Monday to Friday.
The most popular currency pairs in forex are:
EURUSD (Euro against the Dollar)
GBPUSD (British Pound vs. Dollar)
USDJPY (Dollar vs. Japanese Yen)
EURJPY (Euro vs. Japanese Yen)
Indeed, the forex market is open 24 hours a day because all traders all over the world are involved in this market. Europeans will be interested in their currency EUR all day, Asians will be interested in their currency JPY during their day, which corresponds to the night for Europeans. Thus, there are constantly working traders.
What is a trader?
We used the term “Trader” just above and we will explain this term to you immediately.
The word Trader designates the person who works on online trading. We can define the Trader in 2 very specific categories:
- The professional trader: He will work for banks or large companies and manage tens of millions of euros. It is very stressful but the banks accept the risks of trading. It takes a degree and excellent trading experience to work with banks. The advantage: you don’t work with your own money.
- The particular trader: It’s you and me. The individual trader will trade for him with his own money. He is independent, free of his decisions. You don’t need a diploma, but training is compulsory.
No matter what category of trader you are interested in, trading requires a lot of the qualities necessary to perform in the field. You will have to manage the risk , manage your mind, analyze the markets, position yourself correctly etc. At first it can be scary but then, once trained, you will find that you will quickly find your lairs!
Online Trading: Here Are 3 Great Strategies
A trader is free on his way of working. There are countless strategies for performing in online trading, but there are three strategies that stand out the most. Depending on your investor profile, you will choose a specific strategy that will be adapted to you. Here they are :
- Scalping: This is an extremely aggressive strategy that involves buying and selling assets and holding them for seconds or even minutes. This strategy does not take a lot of time and is very profitable, but it does require a lot of concentration and a small base of experience.
- Day trading: This is a very common strategy in online trading. This strategy involves placing a buy or sell on an asset and close it on the same day for daily gains. The trader has a “day to day” thinking. This strategy is recommended for beginners because there are easy methods to implement.
- Swing trading: This is a strategy that is also widely used in online trading. This strategy consists of placing purchases and sales on assets by holding them for several days, weeks or even months. We think medium term because the positions are calculated for several days. The beginner can also use this strategy for his online trading.
Can you combine online trading with your main activity?
Yes for sure, you can use the three strategies stated above and have a job alongside. Here are the steps to follow in order to be able to trade online correctly.
First, you will have to train yourself to learn the theory, practice, operation of trading etc. It is impossible to generate a regular long term income when you are starting out if you have not had any training.
Then, you will have to practice every day and assiduously to work on your psychology, your reflexes, your decision-making etc. You will also have to analyze the markets that are best suited for your online trading (according to your working hours).
Finally, you will combine all your knowledge about online trading to carry out online trades according to your analyzes.
Conclusion on online trading
If you are self-motivated, enjoy working on a computer all over the world, and are willing to train and work daily, we think it would be smart to read the other articles on the website, and benefit from the training offered that we are offering just below. This will allow you to get a first idea of online trading and you will see if you like it or not.
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