Tricks of the trade – How to start trading in the South African market
Achieving top-trader status is often akin to rock stardom. It’s no wonder newbies to the trading game covet that so lofty a position of being able to deftly invest and see consistent profit. But you don’t have to be a Wall Street resident to become an equities trading rock star. Just about anyone can make a good mark on the markets. You just need the proper tools, and maybe a little bit of practice.
And with MetaTrader 5, and QuickTrade, that first foray into trading online is a stronger set up toward trading success.
Are you ready to give trading CFDs a go? Let’s talk about how to get started.
Beginner’s guide to trading
First, a definition: stock trading is the buying and selling of a specific company’s shares, according to the constant daily shifts of price changes in the market, with the goal to making a profit.
But it’s easier said than done – because a business’s profitability can change on a whim, and so that dynamism of stock price movement, can be wonderful on the rise, but devastating on the fall. It’s best, then, to get a good feel for the market and its potential behaviours, before rushing into a live trading situation.
So, to start, let’s talk about two types of stock trading:
This type of trading is the fleeting kind – traders buy and sell quickly, usually closing on particular stocks within a day. A good understanding of the market is vital here, as buying and selling depends on the subtle shifts the market undergoes throughout the day. Day trading is a way to make a good quick buck, if you get the hang of it.
This type of trading is more long-term. Traders rely on the market’s timing, and the foreseeable movements that are likely to arise. These movements are usually based on activity at a company level, and an understanding of how these business decisions affect stock standing in the market, is vital. That stock’s rise or fall can then essentially be anticipated.
We’ve mentioned much on how important a solid understanding of the market is when endeavouring to invest for success. But it’s not knowledge gained overnight, and even the most masterly of traders had to start somewhere. So, before you jump into a live trading scenario, here’s how to start your trading journey.
How to open a brokerage account
Step 1 – Create a Profile
Visit QuickTrade and click the CREATE PROFILE button. Fill in the form to start the process.
Step 2 – Verify Your Email
We’ll email you instructions on how to verify your profile. Check your inbox.
Step 3 – Client Portal Access
Once you’re verified, we’ll confirm your login details.
Step 4 – Upload Your FICA Documents
Upload a copy of your ID or passport, and a proof of residence so we can ensure FICA compatibility.
Step 5 – Complete a Q&A Test
We want to know your trading experience, just so that we can define the risks associated with trading for your trading skill level, and so help you become the investor you want to be.
Step 6 – Verify Your Profile
Then it’ll be up to us to verify and approve your documentation. We’ll let you know when we have, and you can then start trading immediately.
Set a trading budget
Due to the many factors affecting market stability, understanding the market isn’t always an exact science. And because your hard-earned money is involved, there’s that ever-present risk that often does much to stall your trading progress.
To alleviate the apprehension, it’s best to know your budget when trading – defining what you’re willing to lose, if the worst happens, prevents major money disasters.
So, try not to allocate more than 10% of your portfolio to individual stocks, and never invest more than you can afford to lose.
Live trading can be a stressful endeavour – choosing the right stocks, anticipating the profitable market shifts, curbing the downfalls, and hoping for a profitable build on the money you’ve risked. For the new trader, it can seem like an intimidating experience.
There’s a way to build your experience and get to know the minutiae of what a successful trade looks like, without the pressure of a real-money situation:
The virtual trading account
A virtual trading account is essentially a demo. You can use this tool as a way to hone your trader skillset to a knife’s edge, without ever having to part with a single cent. Virtual trading mimics real-life trading almost exactly, so barring some rules around the funds you have to start, and the spreads you’ll get, you can get to know market behaviours, fluctuations and scenarios in a more relaxed manner.
Click here to start a virtual trading account with QuickTrade.
Get to know market and limit orders
Once you’ve set up a profile on MetaTrader 5, through QuickTrade, you’ll be met with options on the type of order that suits your investment plan. We’ve talked about the fleeting day trade, and the longer-term active trade. The processes governing each hinge on your intent in the trade – are you looking for a quick buck, or are you looking to nurture an investment? If it’s the former, a market order will buy stock as soon as possible and at the best price for you. If it’s the latter, a limit order is on the cards – a longer term order that let’s you set a price. The stocks will only be purchased once the stock price meets your order price.
If you’re ready to be the next stock market rock star in CFDs, we have the instrument for you – MetaTrader 5. And QuickTrade is ready to help you bring your trades to new levels of harmony.
Click here to get started now.