File Photo: IOL

CAPE TOWN –  Daniel Kibel, Chief Executive of online trading company CM Trading believes that it is beneficial for newcomers to know the benefits and pitfalls of the business of trading. 

“There are a few things that traders need to remember – no one is more important than the other – they need to be combined in order to help with a successful and positive trading experience,” said Kibel. 

“Don’t over risk yourself – so don’t trade with what you don’t have. Trading has always been portrayed as exciting, fast-paced, buy or sell before the bell, but it also needs to be done responsibly.  If you get caught up in the trading ‘race’ and invest more than you have available, you can lose more.  Having said that, however, with the right guidance and a proper understanding of the markets, trading can prove to be very profitable.”

Kibel’s next tip to encourage responsible trading: “Be informed and stay informed.  

He advises that users should watch the markets, watch what is happening in the country – whether it is using the financials in the daily newspaper or using the online and immediate company or commodity results, it is so important to be aware of what is happening around them.

“Invest in what you understand – if you understand the retail market, invest in that, if you understand the IT market, invest in that.  The reason I say this is because you will be interested in that market and will understand all the nuances, the small changes in the popular vote or even know about the up and coming undiscovered gems that you could get in with on the ground floor.

"Don’t invest in something you don’t know unless you are prepared to learn everything about that sector.  Trading in a market that you understand will make your trade all the more successful.”

“The other thing that would be traders (even experienced traders) need to understand is to have realistic expectations – know that you can make a better future for yourself but it is never guaranteed.  If you have realistic expectations you should never be disappointed and your trades will be more responsible with the ultimate goal being to make a profit on your initial investment," said Kibel. 

Kibel also recommends that traders use a regulated company and not just get family or friends to recommend their trade pick of the day. 

 “Use a company that is governed by rules and regulations, that answers to a regulatory body – without that support and back up, an inexperienced trader could get into the real hot water!” 

“While trading can be high risk, with the right understanding and the right organisation having your back and practising responsible trading, it can also be a lot of fun with high rewards,” said Kibel.