For investors who are not suited to traditional share trading, there are many profitable alternatives. One of the most attractive is the CFD (Contract for Difference). The peculiarity of this instrument is that it does not give the trader the right to own a particular asset that has been selected for trading, but it does allow the trader to earn on price movements. Currently, most well-known brokers work with CFDs and many of them are even willing to offer platforms developed specifically for trading CFDs.

Trading CFDs allows for speculation on the rise or fall in the price, giving investors all the advantages and risks involved in trading securities without actually owning them, or similar to other assets.

How do I trade with CFDs?

Trading platform capabilities for trading CFDs in South Africa

"Where do I start?" - is a frequent question from inquiring minds. A CFD trading platform in South Africa is a good option for beginners. Such an online platform provides various types of trading, including CFDs, for trades between traders directly or through a broker, allowing you to trade remotely from home.

CFD platforms in South Africa provide facilities such as quotes, trading charts and trading indicators. The choice of securities to trade should also be based on fundamental and technical analysis, with the short-term investment period and the desire to profit from falling stocks being of prime importance. CFD trading is therefore another tool that helps you make a profit.

Choose your investment strategy
Choose your investment strategy

In CFD trading, there are two quotation prices - 'bid' and 'ask'. You can buy a CFD at "ask" price if the quotes go up and vice versa you can sell a CFD at "bid" price if the quotes go down. Stock market quotations are divided into direct and indirect quotations. Direct quotation is an expression of unit price of an object of trade, it is encountered in most cases. An inverse (indirect) quotation shows how much a commodity can be bought for one unit of money. 

You can trade on a CFD platform with leverage. You have the opportunity to open a position and pay only a fraction of the total cost of the trade. When the market moves in the direction you expect, leverage can increase your profits.

Another requirement for traders using CFD trading platforms in South Africa is the availability of accurate forex market indicators for CFD trading charts. By using computers, the use of indicators is made as easy as possible for modern traders. 

Technical analysis indicators play an important role in the work of the modern trader. The very purpose of the indicators is to facilitate the analysis of the huge volume of information presented in the price charts.

All a trader needs to know is how to interpret the reading of such a chart in order to extract reliable trading signals to buy or sell the financial instrument in question. Below we will consider the most popular South African CFD trading platform indicators.

Moving Average. This is perhaps the most popular indicator among all existing ones. It is designed to smooth out the price chart and reveal the major trends on it. It is calculated in such a way, that each of its points represents information about prices for a certain period of time. This time period is called a moving average period.

A simple interpretation of this indicator is to analyse its crossovers with the price chart. If price crosses the moving average upwards and downwards, this is a buy signal. On the contrary, when price crosses the moving average downwards (price crosses the moving average downwards), this is a sign of selling.

MACD. This is a very popular technical analysis indicator based on the convergence and divergence of two moving averages with different periods. MACD refers to the convergence and divergence of MACDs (moving averages). There are two types of representation for this indicator: Linear and Histogram. A linear MACD is represented by two lines (a slow line and a fast line); a histogram is represented by bars showing the distance between the two lines at any given time.

As a buy signal - fast line crosses slow one from downward, as a sell signal - same crossing from upward to downward (i.e. when fast line crosses slow one from upward to downward).

RSI Indicator. RSI (relative strength index) literally translated from English means the relative strength index. The popularity of this indicator is due to the simplicity of its interpretation. With the help of RSI traders estimate the strength of the trend, and the likelihood of its change.

One of the most striking signals produced by this indicator is divergence. A divergence is a divergence between the price chart and the indicator chart. In other words, if a maximum is formed on the price chart, but this maximum is not shown on the RSI chart, it means a high probability of a trend change.

ADX indicator. ADX (Average Directional Movement Index) is a popular indicator, which can determine the strength and prospects of the current market trend. ADX indicator is a graph on which there are three curves: +DI, -DI and ADX. The movements of these lines give certain trading signals. The ADX curve indicates whether a trend is in progress (if so, how strong it is), or whether price is stuck in a sideways movement (flat). A stable trend is indicated by rising ADX accompanied by divergence of +DI and -DI in opposite directions. The convergence of these lines indicates a gradual fading of the movement.

It is important to understand that indicators are not capable of predicting the price movement direction. They are based on the data about the prices and trading volumes. And any buy or sell signals, received with the help of indicators, should be additionally confirmed with the help of other technical analysis instruments.

The best platform for online trading
The best platform for online trading

The next best-known visual aid to the CFD trading platform is the trading charts. Charts are the basis for technical analysis when trading on the stock exchange. They are used to visually analyse price trends for a particular instrument, predicting price movements and analysing whether a position is stronger on the demand side or the supply side. Possibilities of charts and their combinations are widely used during trading both by practicing investors and beginners. There are several types of charts.

Linear (Area) Charts: These are plotted against the closing price of the selected time frame. You will only see the price movement of the chosen asset on a line chart. Zone charts display highs and lows in the market from which price has moved in the opposite direction. These highs and lows are known as zones.

Japanese Candlesticks: A display of extrema, open and close prices for a time frame. The main part of a candlestick is called the body. It shows the difference between the opening and closing price. Contrasting colours are used to show price behaviour, usually green and red. Green indicates that the price of an asset rose on the trading day, while red indicates that it fell. The thin part of the candlestick is called the 'shadow', with the upper shadow showing the maximum price and the lower shadow showing the minimum price. Japanese candlesticks are said to be more illustrative than other charts and allow you to make informed decisions, even in very short timeframes.

Bar chart: shows the price situation differently and less clearly. A bar is a vertical line with the top point indicating the maximum price and the bottom point indicating the minimum price. From the vertical line there are horizontal bars - the left bar shows the opening price and the right bar the closing price. If the left notch is higher, it means that a price has dropped, and if it is higher, it means that a price has risen. This type of asset price display optimally indicates the fluctuation amplitude of a financial asset during the timeframe set by the trader or broker. 

To use all the features of the CFD trading platform, you need further training. If you are a beginner, try your skills in reading charts on a demo account before you start live trading. 

The best CFD trading platform in South Africa has been developed with the needs and demands of traders in mind. The platform includes features and tools to enhance the trading process, analyse markets and expand strategic opportunities. Take control of your financial future now!

How to start CFD trading in South Africa? 

Many brokers in South Africa today can offer CFD trading platforms. When you decide to start trading the stock market, it is important to know how to open an account with the best CFD trading platform in South Africa. Here is a list of items to help you learn how to open a live and demo account and fund your CFD trading account.

Opening a CFD trading account in South Africa is easy and free! Your broker will guide you through the process step by step. The first thing you need to do is to decide which CFD trading platform to use. Most brokers will offer you a free account - a demo account, so you can get an idea of how the platform works. Once you are confident in your abilities, you can open a real trading account. 

Already more than a million active users are making money on the best CFD trading platform in South Africa, come and join us!

Once you have chosen your online trading platform, you need to register with it. This is a simple process. You need to provide your personal details such as first name, surname and email address. Then you have to confirm the registration process. After registration you can open a trading account.

Registrating on the investing platform
Registrating on the investing platform

To start trading on the CFD platform, it is recommended that you open a demo account. A virtual demo account will not only help you learn the technical side of trading, but will also generally teach you how to use the trading platform and invest in general.  It is important to note that you will not be able to withdraw profits from your demo account, nor will you be able to incur losses. All that remains is a virtual world.

How to open account
How to open account

Once you know how the CFD trading platform in South Africa works, you can move on to a live trading account. Once you have logged into your account on the trading platform, you can choose the asset you want to trade.

The platform will help you choose the currency pair you want to trade. However, it is your responsibility to open and close your positions yourself. You may want to set a stop loss in order to prevent catastrophic losses in the event of a winning position. Some platforms also allow traders to open an unlimited number of CFD trading assets. If you want to open an unlimited number of assets, this is a good way to maximize your income.

You can trade on a CFD platform in South Africa with leverage to make more profits.  Leverage is money that a trader can borrow from a broker specifically to open high volume trades. The amount of leverage is usually set when you open a trading account and can vary from 1:5, 1:20, 1:100 and even 1:1000.

Deposit replenishment options
Deposit replenishment options

You can replenish your trading account by means of wire transfer, bank transfer or electronic wallet. Depending on your depositing method, the money will take anywhere from 5 minutes to 24 hours to reach you.

Once you get a foothold in the CFD trading platform in South Africa, you will be able to develop your own strategies. It is advisable to draw up a strategy before you start trading, to make sure you are on the right track. However, once you start trading, it is important to stick to your plan to get results. The best way to manage your strategies and develop winning trades is to constantly monitor the market with charts and trading indicators to determine when to buy or sell, and use stop losses if necessary.

Trading CFDs in South Africa is one of the few areas of finance where you can make a profit in the short term and minimise your losses. 

It is a viable option for investors who wish to diversify their portfolios and increase their returns. Using a combination of technical analysis, fundamental research and common sense, you can be successful. The South African market offers traders a wide range of world currencies to choose from and provides good opportunities for both new and experienced traders looking to take advantage of the growing trend of trading in South Africa.

How to make money trading CFDs in South Africa?

The decision to become a trader is a serious one. Let's say you have made it. You have money, a reliable broker, a basic understanding of the stock market - and some time. If you're not prepared to spend all day trading, it's worth considering ways to make the process quicker and easier. We will tell you how to trade and make money on the CFD platform in South Africa without wasting a lot of time!

Choose your trading style. There are three trading styles in total: scalping, day trading and swing trading. They differ in how long you hold a trade and therefore in the amount of time you spend trading. 

Scalping is when you make a large number of low-yielding trades in a short period of time. The trades last for several minutes or even seconds. A scalper works at lightning speed and cannot get distracted, because the outcome of the deal depends on the speed of reaction. This intensive style of speculation is not suitable for every beginner.

Day trading, intraday trading, means opening and closing trades during the trading session. There is less risk and stress, but trading requires several hours per day, so this style of trading is more suitable for those who consider trading as their main occupation.

Swing traders can hold positions for days, weeks, or even months. You can take your time and devote to trading as much time as you have.

The key to success when trading on a CFD platform in South Africa is preparation, planning and discipline. Choose the right platform and a reliable broker. Have a trading plan, strategy and focus. Be patient, take it slowly. Diversify and be open to new knowledge.

Commodity trading
Commodity trading

Choose a strategy. A trading strategy is a set of rules and an algorithm of actions which a trader follows when making transactions. There are a lot of strategy variants and it may be difficult for a beginner to make sense of them. That is why brokers often offer not to spend time in development of your own strategy, and use a ready-to-use solution with predicted yield, set risk levels and starting amounts.

More mobility. You can save time already at the stage of opening and funding your account - do it online. And to avoid having to make all transactions through your computer, install a mobile app. This means you can log in to your account from anywhere, anytime. You will always be able to monitor and execute your trades related to CFD trading platform in South Africa.

Stop Loss and Take Profit. To avoid having to close a position manually and to keep an eye on the state of a trade, use a stop loss. Set it at a certain level, and when the price falls to that level, the broker will close the trade. Take Profit works in the same way, but on a rising price. This way you can disconnect from trading, mind your own business and not worry about possible losses.

Upgrade your knowledge. The more you know about the market, the less time you spend on making decisions. And trading is an area of knowledge that most people write books and dissertations on, so there's room to grow.  It doesn't hurt to spend time on training: webinars and courses. You can also take help from websites, magazines and financial articles to learn about the pros and cons of stocks.

Trading on the best CFD trading platform in South Africa requires an investment of not only money but also time. But the time costs can be reduced without sacrificing the profits by choosing a trading style that suits you, by using ready-made solutions and by keeping your knowledge up-to-date. We wish you a successful investment!

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