How to learn trading in Africa?
In this article, I will explain how to learn trading as a beginner. Read to the end.
This could be the subject of a whole training which will take hours but I want to be as brief and concise as possible. I will give you a few steps in the best way I think you should follow in order to start trading especially if you are a total novice who has never taken a position, who has no idea of the market, who does not even know not what he’s doing. All right let's go.
Choose a market and a financial asset
Nowadays, being in Africa, you can have everything you need to get started in trading for free. You can have free trading software. A little search on google and you will find brokers who offer demo accounts to get you started. You must start by choosing a market and a financial asset.
As a market, you can choose:
- Currency market (Forex);
- Equity market (stock market and indices);
- Raw materials (commodities).
And more. Choose a market, Forex for example. In this market, you have several assets like EURUSD, GBPUSD, USDJPY, etc. These are currency pairs. If you are more attracted to commodities, there is also a wide choice of financial assets to choose from such as gold, wheat, oil, etc. So choose a financial asset.
Which one you choose is not important at the moment, go ahead and make your choice of market and financial asset. The goal here is to familiarize you with the field, get an overview of trading as a whole, see the charts, info and activities that orbit around. Then you can make a more informed choice that fits with your objectives but for the moment, you need to familiarize yourself with trading and its tools.
Observe the chosen market
You have to start to familiarize yourself with trading. This involves opening a demo account with a broker and downloading a trading platform. Open your platform and walk around. Watch the graphs, change the intervals, etc. You will find short videos on youtube on how to get started on a trading platform.
You have already chosen a market and an asset, the next step is to observe the said market especially with regard to the asset you have chosen.
Let's say you chose the stock market and the DAX index. On your trading platform, open the DAX and observe it for at least 2 weeks. See how it evolves on 15min, 1H, and daily. Make it simple with no real goal at this level.
The biggest trap to avoid here is to get into super complex things like indicators, graphical tools, chart training, and all the hassle. Here I want to familiarize you with the normal movement of the price (price action). It is important to understand how the price moves. No matter what you want to be, the key to successful trading is to understand the movement of prices in the market (supply and demand).
Just watch. Take your notes like, "I saw the price go up to that level, then it went back to that level on that day. Then the next day nothing happened and I don't know the reason. " Write down everything you see and think about the price action.
Watching your market for two weeks will bring you a lot of knowledge about how things are moving. After this time, you will find out when the financial asset is stable, at what time of day it is volatile, you will know its movement deviations and it will be possible for you to have an idea of the behavior of this asset. At this level, you are ready for the next step.
Learn technical analysis and chartist configurations
Now is the time to document more. I recommend you research youtube where you will find interesting tutorials (or follow our training).
You will learn chart patterns that will help you better understand your market. You will discover the head and shoulders pattern, the asymmetrical triangles, the bullish engulfing candles, etc. The great thing about it is that you’ll remember seeing things that look like what you find out when you’ve been innocently watching the market.
Link your Chartist studies to your observations
Make connections. Things will start to be clear in your mind. By looking at the price action before, you've seen things you don't really understand but your brain remembers. By learning the configurations now, it will be easier for you to develop a trading strategy based on the movements you have observed in the price of the asset.
At the very beginning, when you were watching the price action, you had no idea what was going on there. Now you start to see more clearly, to understand the reason for the movements observed. You know how the asset behaves, you have noticed repetitive patterns during the observation period. What you have to do is develop a strategy or implement a strategy that you have learned.
Choose 2 trading strategies
The goal here is not to make money, you can imagine. It’s about getting familiar with the buy / sell side of the asset. Place orders in the market and test your strategies. We don't care about the money. Test your strategies on your demo account. You will see how transactions are made and how they are executed in the market.
No need to think too much about the risk factor, the sizing of your positions. Just just put together all the previous steps which are to analyze the market, recognize patterns, develop your patience while waiting for the formation of these patterns to place an order.
At this level you will be comfortable with trading and already know a lot. You are ready to take it to the next level.
I can only congratulate you; you are officially a novice and well-informed trader who is ready to embark on the serious and advanced part of your trader journey. Advancing alone, without support or guide will be very difficult because there is a lot to know that you can only acquire with practice and good supervision.
For the rest of your training, you will develop a trading strategy adapted to your objectives, taking into account risk management strategies, positioning and advanced analysis. I recommend that you find a trainer who will make your learning easier. However, Google is your friend and youtube has a lot of free resources.
Finally, trading in Africa is like trading everywhere else. There is no difference for whoever wants to start.
Make up your mind and get started. Salix Nigra offers personalized trading coaching and training. Do not hesitate to contact us to reserve your trainer / coach.