Are you interested in the stock market? To feel comfortable with online share trading, first, you’ll need to learn the basics to build confidence when you begin executing trades. To start, let’s review what online share trading entails. Trading typically refers to the buying and selling of shares in a secondary market within the same day. A secondary market allows traders to buy and sell shares that are issued by a primary market through a broker or stock exchange. A primary market is when companies issue new securities or shares that they allow for the public to purchase.
To begin your journey of online share trading, there are a few tips you should consider following. The first is to open a demo account. Demo accounts allow users to practice online share trading through a variety of programs without the risk of depositing their money. Another tip that novice online share traders should consider is studying the technical analyses that accompany stock trading. Understanding the technical analyses will aid in stopping loss and share prices. Finally, traders should consider researching the different stock options. As a novice trader, it is wise to begin with safer stocks to prevent a massive initial loss, but some research is necessary to determine what those “safe” stocks are. When in doubt, you can always consult with an expert. The stock market is inevitably unpredictable, and it is impossible to accurately predict stock prices fluctuations. Therefore, while working to develop adequate knowledge about the stock market, consider befriending an expert to have all your questions answered.
What is the best online stock trading site for beginners?
Not all traders are equal, meaning the best online stock trading site for beginners will depend largely on goals and platform needs. Furthermore, it’s important that you find an online broker who has federal regulations in South Africa. There are different regulatory bodies depending on the type of trading. For example, Forex trading is run by the Finance Service Conduct Authority (FSCA). Prior to trying out an online broker, we greatly encourage you to look into their financial regulations in South Africa. You can check this list of crypto brokers in 2022.
There are many beginner-friendly, and regulated, platforms that would likely serve their purpose and help you succeed, but we’ve found four that we personally recommend for beginners in South Africa.
1. IQ Option
Overall, this is the best South African online stockbroker. It’s a safe choice for both beginners and experienced traders and has many trading options such as Forex, options, stocks, ETFs, commodities, and more. There are no deposit or withdrawal fees, and there are a wide variety of instruments available to help you understand the technical analyses. The only downside of IQ Option is that their customer service is somewhat slow. Other than that, IQ Option presents as an excellent option for beginner traders.
2. eToro
Another excellent online stock broker option is eToro. eToro differs from IQ Option in that it allows for users to copy trading strategies from other traders. Like IQ Option, eToro is excellent for both beginners and experienced traders, so it’s a platform you can grow into. Furthermore, eToro provides users with $100,000 of virtual money, so you can experiment with the platform before making any monetary contributions. Overall, the platform comes with excellent community support, is easy to navigate, and is extremely beginner-friendly. The downside of eToro is that their Forex and CFD fees are somewhat expensive.
3. Plus500
Another excellent option is Plus500 which is known for its CFD day trading in South Africa. There are over 2,000 CFDs available. There are no commissions, competitive fees, and the platform is user-friendly. The downside of Plus500 is that there are limited educational tools, which means that beginners will need to do some external research to help with their understanding of the platform.
4. Capital.com
Capital.com allows for multiple trading options in stocks, Forex, commodities, and cryptocurrencies. Unlike Plus500, capital.com has fantastic educational resources for beginners, and it comes with an AI assistant to help with decision-making. Further, capital.com is completely commission-free, which is rare in the industry. The biggest downside of capital.com is that you cannot customize strategies, which means you are left to pre-configured trading strategies. There are fees associated with inactivity as well, but this only incurs if you are inactive for a full year.
5. FXCM
Forex Capital Market (FXCM) provides a broad range of CFDs in stocks, commodities, and cryptocurrencies. The company is well-established and reputable and provides a user-friendly platform. The biggest downside for FXCM is the expensive inactivity fees that incur after a year of inactivity.
6. Standard bank online share trading.
Standard bank online share trading is another beginner-friendly stock trading platform. They provide users with a step-by-step experience on how to trade for beginners, and their online brokers help users identify investment goals. The platform boasts that professionals are on call for consultation and advisement; the company also indicates that their analysts conduct a plethora of research for their customers. This may be an excellent option for someone who would like more of a mentoring relationship as they get started.
Which online share trading is best?
Out of the six online brokers that we listed above, we would choose IQ Option as the best overall platform. However, again, the best platform will largely depend on your goals and needs for trading. For example, if you want to execute trades on a stock that isn’t an available option on IQ Option, then that online trading platform would not be the best platform for you. Still, if we had to choose, we would go with IQ Option given its diversity, beginner-friendly nature, and expansive opportunities for all kinds of traders.
How can I do online share trading?
Getting involved in the stock market is much easier now with the help of the internet. Just about anyone with internet access and a little bit of capital can get involved. To get involved in online share trading, you’ll first consider the types of stocks you’d like to trade. This step will take a bit of research and an understanding of the market. As stated earlier in this article, beginners should opt for safer stock options or those that are less volatile. Again, it is impossible to predict price fluctuations with stocks, but some stocks are much more stable in their prices than others. Once you’ve determined the stock you’d like to invest in, research and test your strategies with a demo account, then go live with real trading executions. The outlined steps are seemingly simple but don’t underestimate the time commitment needed to make informed trading choices. Make sure to do your research and go into trading with a solid strategic plan.
Is online share trading profitable?
Online share trading can certainly be profitable with the right mindset and strategy. If you blindly throw money towards a stock in hopes of getting rich, then online share trading likely will not yield profits. There are four methods used by experts to make money in the stock market. They are-
(1) buy low and sell high
This one seems like common sense, but it takes skill to determine when that low point is. Take Bitcoin, for example; their high last year this time was actually a low compared to their prices in January. Understanding the fluctuations in the market will help you adequately predict the ideal time to buy.
(2) Short sell high and buy back at low price
This method is risky but can yield great earnings. The act of selling short simply means that the trader is betting that the stock that they sell will drop in price. They essentially borrow a stock, sell the stock at a high price, and hope to buy it back a short while later at a lower price. The reason this is risky is that, again, stocks are volatile and unpredictable. If the stock prices rise, then this method will result in loss.
(3) Earn dividend income from the stocks
Dividends are excess money that a company earns each quarter that they will pay out to their shareholders. The trick with earning income from dividends is choosing to purchase shares with companies that will likely increase their dividend payments year after year.
With these tips and broker suggestions, we hope that this article helped serve as a jumping-off point to get you more invested in stocks. As always, happy trading, friends!
