Everyone who has ever considered starting to trade or invest themselves has been confronted with this question. Which platform will suit my needs best?
Every single broker has their own key sales pitch as to why you should trade through them.
So which broker should I choose and why?
Firstly, there is no simple or easy answer to this. As the saying goes, "different strokes for different folks."
Understanding what you need comes more from understanding yourself, your trading strategy, your strengths, your weaknesses and what you want to achieve or get out of trading the markets.
Some Things To Note:
The harsh fact that we don’t want to hear is that no single trading platform is going to make you more profitable than another one, unless it doesn’t work.
Many potential traders get caught up in all the bells and whistles when inundated with information from various brokers claiming that their platform is better than the other. This causes them to lose sight of what is actually important and what to look out for.
A lot also depends on the kind of trader you are, whether you’re an intraday trader, an end-of-day trader or if you view yourself as more of a longer-term player.
The Basics That One Needs In My Opinion:
- Easy to use platform - The platform is understandable and user-friendly
- View of Profit & Loss - One must be able to see your profit and loss on all your positions and your portfolio as a whole
- Order Pad - A view of all live orders that in the market
- Charting & Market depth - A chart to view the support and resistance levels of the instruments/markets and depth to see all available bids and offers
- Cheap administration/platform fees and trading costs - It makes no sense to pay exorbitant fees
- Watchlist - With prices to view the stocks you’re looking to buy or sell
- Mobile phone or tablet app - being able to view your trades at any time and any place
- Account summary and reporting infrastructure - To make reconciliation of your performance and tax easier
- Ability to trade multiple products - Access to Equity, CFD, local, offshore, etc.
- Security of funds - Make sure you have access to your funds as soon as possible, without hassle or penalties
Remember a bad workman always blames his tools, if you can’t make money with a basic trading platform you won’t make money using an expensive one.
The Process One Should Follow:
1. Have a research portal that suits your needs and use it to form the basis of building your trade ideas, the following sources should be a good start:
- Yahoo/Google finance
- Sharenet Website
- Social trading websites and blogs
- Sharenet Analytics etc.
The more methodical the process, the less emotional decisions you make and the better your trading outcomes will be.
2. Define what sort of trading style you want to use & what markets you want to follow. Most importantly one needs to understand the advantages and disadvantages of each.
- Swing trading
- Pair trading
- Direct equity
- Indices, etc.
3. Define the strategy you want to follow and know your own limitations. It is ill-advised to attempt to become an "intraday trader" if you’re working full time and not sitting watching the markets in real time. You should rather look to become an end-of-day trader in that instance as it will suit your lifestyle better.
Very often I see people trading just for the sake of placing a trade as opposed to trading when they have a good idea or spot an inefficiency or pattern in the market they want to exploit - they place trades that would not fit in with their particular style or strategy.
Many people bleat on about "trading your plan, follow your strategy" - this is one of the easiest things to say but the hardest thing to do. I believe this comes down to being disciplined and doing proper research and back testing. Jumping around between strategies generally does not work. Once you commit you need to commit.
When you have run through these notions yourself and drawn up your plan and how you wish to execute it, sit down with a professional, someone who you can bounce ideas off, and make a well-informed decision from there. It is also good to have a trading partner around when you feel like deviating off this strategy - an objective opinion from someone not invested in the trade can be worth gold.
If you would like to discuss this with one of our trading experts at Sharenet, please fill in the form below.
Looking forward to hearing back from you.
Sales Trader : Sharenet Johannesburg
Juan developed a passion for the markets and short/medium term trading early in life and decided to pursue a career as a professional trader back in 2012. He started his career at Vunani Private Clients, as a private client trader as well as in “principal” capacity before moving to Capilis Asset Managers (later acquired by Sharenet). Juan uses a holistic view when analysing market opportunities. He considers everything including technical and fundamental analysis, as well as Sharenet Analytics and other quantitative models to identify trade ideas as well as entry and exit levels. Juan is an avid sportsman and a big history nerd. He holds the designated Registered JSE securities trader, RE5 & RPE exams and is currently studying towards his B. Com Banking degree.