Here is how to start your journey to online trading

Here is how to start your journey to online trading

online trading forex money bitcoin

Online trading is becoming increasingly popular, with Modern Trader reporting that the number of global online traders has grown from 9.5 million four years ago, to more than 15 million today.

Dany Mawas, Regional Director at INFINOX, a leading CFD and FX broker with an international presence including in Africa, attributes this growth to technological advances, which makes trading convenient and fast. Traders can now trade from anywhere and at any time and will get quick, easy access to the markets.

Apart from the potential of achieving lucrative financial returns, additional benefits of online trading includes greater financial knowledge and developing associated skills with trading like discipline and emotional control,”. 

Dany Mawas

How to start online trading

There are those that are apprehensive about starting online trading, due to the associated financial risk. To put them at ease, Mawas notes that while fine-tuning trading skills comes with experience, the best way to start is to open a demo account with one of the many online trading partners available today.

“A demo account is a simulation account that provides users with the opportunity to place trades and to become accustomed to how markets move,” he says.

Additionally, some online trading brokerages provide bonus incentives to boost traders initial deposit and give them a better platform to start on. With INFINOX, traders are only required to deposit as little as US $50 and will, in turn, receive an additional US $25 bonus. Meaning that 33% of their at risk capital is the bonus.

However, he points out that traders should also do their due diligence when selecting the brokerage to partner with and not only base their decision on the starting bonus. “This includes investigating where the brokerage is regulated, and ensuring it has a physical presence instead of merely being an online entity,” says Mawas. 

Determine your plan of action

Mawas notes that although there are several game plans that beginner traders can adopt to gain profits on their investments, the old adage of ‘over-analysis leads to paralysis’ couldn’t be more true. “When developing a strategy it is vital to spend time researching and learning what works best. The more you perfect managing your risk, the better you become. If I could give one piece of advice, it would be to start simple and keep it simple.”

Mawas emphasises that trading is a humbling experience due to its binary outcome of either making the right or wrong decision. “As such, it is important for traders to have emotional control and the willingness to learn from their trading mistakes.” 

Being emotionally invested can be detrimental to success, he adds. “Often, when the market dips, traders will make the emotional decision to continue trading in the hopes that they recover quickly, which often doesn’t happen. It’s imperative to assess each situation for what it is and to make the most informed decision.”

Why trading is more accessible

Current affairs such as COVID-19, the U.S election, and Brexit have prompted people to stay more up-to-date with current news, says Mawas. “This is important as the outcomes of these events have an effect on the markets. Nowadays people are more clued up than they think they are when it comes to knowing what is happening and what could impact their trading. This knowledge makes trading more accessible for those that wish to start.”

He also states that the internet is full of useful information for new traders to digest and that websites such as IX Intel offers manuals and how-to guides to help traders learn the basics of a successful trading career.

Mawas points out that the rise of social trading has also increased accessibility for beginner traders. “Social trading apps such as IX Social, allows users to access all the financial markets at their fingertips with the added bonus of tapping into other traders’ knowledge. Users can auto-copy top traders and receive the same results that they do.”

Today, online trading is an easily accessible journey, and anyone can be successful if they use the right tools and spend time developing the necessary skills and acumen,” concludes Mawas.

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Examining forex as an alternative to cryptocurrency investment

Examining forex as an alternative to cryptocurrency investment

With cryptos not looking appealing with recent trends, investors are seeking alternatives. Is forex trading an answer? Let’s take a look.

forex crypto trading dashboard

Cryptocurrency

Cryptocurrency has become a trendy investment topic over the course of the last five years or so, and it’s never been hard to see why. It offers an entirely new opportunity, decentralized and set apart from ordinary investment markets. For many in Africa, it can also be somewhat more accessible than those traditional investment markets. And, of course, there have always been arguments suggesting likely profits. That bitcoin and its closest counterparts will one day skyrocket to high values. Or that cryptos will serve as “hedges” in times of economic downturn. There is definitely some logic to all of this. But all of a sudden cryptos aren’t looking quite as appealing, which could lead some investors to seek alternatives.

Crypto mining in Africa

For starters, there’s the fact that crypto mining in Africa has begun to feel somewhat problematic. Last year, we wrote about the ‘Top Five Countries Mostly Impacted By Ransomware And Cryptocurrency Mining’. Several African nations (Ethiopia, Cameroon, Tanzania, and Zambia) were included. While not nearly as many people mine cryptocurrency as actually use it or invest in it, this does pose a larger problem. Concerns over malware could reduce the flow of new cryptocurrency into Africa, stunting the market and potentially dissuading would-be investors.

There’s also the “hedge” argument to consider. For many years now, crypto advocates have tended to suggest that digital currencies would resist economic downturns and serve as financial safeguards in much the same way gold has occasionally done in the past. Now, however, faced with its first big test on this front, cryptocurrency is coming up short. As world markets plunge in reaction to the coronavirus pandemic, NewsBTC writes that bitcoin is at risk of a massive drop-off (and it has already plunged sharply). This is not to say that the hedge argument has been conclusively disproven. But right now cryptos don’t look any safer or more reliable than ordinary market investments.

Fresh alternatives for investors

This brings us to our main point, which is that we may begin to see African investors seeking fresh alternatives. Options that are not tied to traditional stock markets, but which also don’t involve cryptocurrency. And one logical option is going to be the forex trade.

If you aren’t well versed in the forex trade, it’s actually fairly simple to grasp. At least on a fundamental level. Basically, it is the worldwide market comprised of the exchange of different currencies for one another. It is by nature a decentralized investment market, and one that operates 24 hours a day during the week. FXCM adds that it is the most liquid market in the world as well. Meaning its trade volume exceeds that of any other market (and vastly so, in fact).

In a sense, that description closely matches how many investors view cryptocurrency. The characterizations that the market is decentralized, enjoys high liquidity, and functions via the exchange of different currencies could certainly apply equally to forex and cryptocurrency. This is one reason that the former could become such an attractive alternative to African investors if indeed they start to back away from cryptocurrency. Fundamentally it’s a similar way to invest. Except that it does away with some of the uncertainty that surrounds crypto markets.

Similar?

It may also be that the similarities don’t end there, either. Another thing investors tend to like about the crypto market is that transactions occur via blockchain technology. Which ensures a certain degree of security, fairness, and in many cases efficiency. This method of trading transaction initially only found in crypto markets. However, the last year or so has brought about continual stories concerning the adoption of blockchain tech by other trading entities. For instance, Reuters covered HSBC’s blockchain venture just last year. Revealing that the company had “reduced the cost of settling foreign exchange rates by a quarter” through a blockchain-based system. This could indicate that before long a significant portion of worldwide forex trading will use this technology.

None of this means that forex trading is identical to crypto investment. There are significant differences between the two. However, if crypto does start to look like a shakier prospect, we could begin to see investors in Africa and elsewhere turn to forex as a fairly logical alternative.

Featured image via Good Free Photos

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