Are you wondering what kinds of choices you have as an Africa-based securities trader and investor? For the many individuals who do the majority of their trading from home or a mobile device, there are plenty of assets to choose from.
In addition to the best-known of the bunch, corporate stock shares, there are many others suitable for new or experienced enthusiasts.
Before settling on the one or two that are best suited to your risk tolerance, budget, and personal preferences, consider the pros and cons of each.
Shares, for instance, can go through long periods of small or zero price changes, even though they are the most popular of all the securities among wealth-builders and long-term investors.
Forex is ideal for beginners but can seem too simplistic for the very experienced. Likewise, instruments like options and futures can become overly complex unless you still to the most basic types of transactions.
Here are the essential positive and negative points about the many ways Africa-based individuals can take part in online trading.
Shares
Trading equity shares of listed corporations is one of the oldest ways to take part in the international markets. For more than 100 years, many have built portfolios of various corporate stocks with an eye toward appreciation and income. When companies grow and become more valuable, their share prices tend to rise. Plus, many businesses listed on the major exchanges pay regular dividends to all shareholders.
Africa-based individuals can take part in any of the international exchanges, including the continent's largest of all, the JSE, Johannesburg Stock Exchange. In an online environment, your location doesn't have a significant effect on when or where you can trade. However, it's critical to follow local regulations and laws that are specific to your nation, whether you're based in Kenya, South Africa, or somewhere else.
Forex for Beginners
Buying and selling foreign-exchange currencies is one of the simplest and most exciting of all the choices for newcomers. That's because forex combines simplicity with fast price action, the chance to use leverage, the potential for quick profits, and relatively modest risk. When it comes to how to get started – online trading offers beginners the ability to set up accounts quickly, start with very low initial balances, and learn how to place trades in a demo account with fake money. In less than a few hours, you can learn which currency pairs are the best ones to focus on, how to set protective stops, and how to exit a position instantaneously.
Options
Options, like shares, are among the dinosaurs of assets people trade via brokerage firms and on international exchanges. Each option contract gives the holder the right to sell or buy 100 shares of the underlying stock. One of the main advantages of options is that they come with low prices but give you the ability to control 100 shares.If prices change direction, even a little, your holdings can become worthless. However, if the price moves in your favor, an option contract can increase in value by a substantial amount in a short period of time.
CFDs
Contracts for difference, or CFDs, are similar to options in that you do not own the underlying asset. Instead, you are speculating on the direction of the next price move. If you guess right, your CFD increases in value. Guess wrong, and you end up on the losing end of the deal. Many prefer trading CFDs because of their simplicity and affordability. Traders can buy or sell contracts (CFDs) for almost any amount of money, from a small sum to a much larger value.
Cryptocurrency
The crypto market is one of the hottest in the world right now, particularly due to the popularity of bitcoin and ethereum, the top two cryptocurrencies. As the world political situation becomes more unstable and as the international economy continues to worsen, many investors turn to digital money as a safe haven asset. You can trade bitcoin, ethereum, and dozens of other alt-coins via your favorite broker's CFD offerings. This is actually a safer way to get involved in the highly volatile crypto marketplace. Why? Because using CFDs means you do not own the underlying asset. Instead, you're speculating on which direction the asset's price will move, up or down.
Copy Trading
Copy trading is a method, not an asset. But it makes sense to include it here because of its increasing popularity and the fact that you can use the technique with almost any asset class. Some brokers offer the service for new account holders. The basic idea is that you exactly follow the buying and selling activity of an expert trader in hopes of replicating their profit margin.
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