Across the globe, the online trading landscape has rapidly evolved. This has also been the case in South Africa, where the combination of increasing internet accessibility and mobile penetration has made online trading more accessible to a broader audience. More South Africans are exploring financial markets, to enable more agency and financial stability.
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The rise of online trading platforms in South Africa
The rise of online trading platforms in South Africa is a product of technological advancements coupled with a growing middle class which is showing a consumer behavior driven by self-directed investing. With internet access being at its highest in the country, and the widespread use of mobile phones, online trading has become more accessible, with more and more South African creating a trading account, especially due to the rise of online trading platforms. These platforms offer the platform to buy and sell stocks, while also being a source of tools to support robust decision-making for investment and trading.
According to a report by Fortune Business Insights, the global online trading platform market was valued at USD 9.55 billion in 2023. However, the value is projected to grow to USD 16.71 billion by 2032, which would be a compound annual growth rate (CAGR) of 6.4%. South Africa is specifically playing an important role in this growth as the increasing demand for digital trading solutions among retail investors is expected to continue to grow.
An introduction to online trading
The foundation of online trading is to buy and sell financial instruments via the internet. Such instruments can be anything, from stocks and foreign exchange (forex) to commodities and cryptocurrencies. The difference from traditional stock exchanges is that instead of relying on brokers or traders, individuals can execute trades on their own through online platforms.
The most common assets available for trading online are first and foremost stocks. These are shared of publicly traded companies, which basically means you owns a small part of the company when investing in their stocks. Commodities are another asset, which can include hard commodities like gold and oil, or soft commodities like agricultural products. Forex is also a common asset, which consists of currency pairs, like for example USD/ZAR. Cryptocurrency is also a common asset being traded, which includes digital assets like Bitcoin and Ethereum. Lastly, exchange-traded funds (ETFs) are traded online. These are a basket of securities which can be traded on exchanges.
How to get started with online trading
The first step when wanting to start trading online is to open a trading account. It is similar to opening a bank account, but on this platform, you will be allowed to execute trades on financial markets. Trading accounts can be accessed through trading apps or brokerage platforms. When opening a trading account, it is important to select a regulated and reputable broker. By choosing platforms like Exness, you are guaranteed a secure and regulated trading platform. Once you have found the right app or platform, you should complete your registration and then fund your account. With funding your account, it refers to depositing funds to trade with.
Finding the right app can seem overwhelming, especially since trading with funds can be a bit scary in the beginning. However, there are a few things to keep an eye out for when selecting a trading app. It is firstly important to look at the user interface and choose an intuitive interface which provides an easy overview of market data, executing trades, and managing your portfolio. You should also keep an eye out for transaction fees, spreads, and hidden charges, so that you compare and find the platform offering the best fees. Two other aspects to keep in mind is access to educational resources such as tutorials, webinars, and market analysis which can help users make informed decisions, and security measures on the ap to protect your account.
Trends in online trading in South Africa
During the COVID-19 pandemic, there was a global surge in self-directed trading, which has also impacted the South African online trading market. The main appeal of such platforms is the opportunity to earn returns with a minimal investment. Another appealing aspect for South Africans is the integration of artificial intelligence and machine learning into these platforms, which is enhancing predictive analysis. The result is that traders can execute more sophisticated strategies when trading online.
It is important to remember that trading carries risks in volatile markets. This is why education is crucial for traders. If you are new to trading, taking time to understand key concepts can allow you to trade smarter and be more aware of how to mitigate potential risks in your trades.
Empowering South Africans through online trading
There is no doubt that online trading has become a gateway for South Africans to get direct access to local and global financial markets. It is the rise of online trading platforms and apps what has made it easier for people to access this online trading world, which makes retail investors better equipped to take control of their own financial future. Providing the right tools for South Africans means empowering them to engage in the global financial markets through online trading.
