Jay Mawji, Managing Director, INFINOX, explains why technological advancements have allowed Africans the opportunity to trade without breaking the bank and highlights key takeaways of what clients should be looking for in an online trading partner.
Gone are the days of dealing with the stock trader on the floor during the Wall Street boom era. Today, trading is accessible to anyone with disposable income, young or old.
Putting this into context, it has recently been reported that millennials make up as much as 60% of the 15 million online traders across the globe, a natural progression given that this is the first generation who grew up with digital technology at their fingertips.
Much has changed in the trading industry with the advent of technology. Technology has opened the market up to everyone, and allowed them to reap the rewards that come with responsible and regulated trading, comprising what Mawji refers to as the 3 A’s: accessibility, accountability and affordability.
Technological advancements have allowed everyone the opportunity to trade from any location imaginable, provided that there is adequate Internet connection. As such, the digitisation of the industry was an important step forward to ensure that more people have access to trading tools – not just stock brokers on the trading floor.
Furthermore, in a digital world, clients can hold stock brokers accountable in terms of pricing, execution and services; creating an environment where clients are confident to participate.
Lastly, the digitisation of the industry has made trading more affordable, so instead of spending thousands of dollars to hire a stock broker, today all that is needed is a US$100 investment and access to the Internet.
By far some of the most significant technological innovations in online trading include tools associated with pricing, charting and order logs. However, one which we have seen becoming ever-more prevalent given the app generation that we live in is the concept of mobile trading, which allows one to purchase and trade shares anywhere and anytime from the convenience of their cellphone, laptop or tablet.
This digital progression requires that regulators adjust policies to ensure that firms and their market solutions work to benefit the client and ensure consumer protection.
While this can at times slow down regulatory advancements, it allows trading partners the opportunity to understand clients so that we can provide them with the best solution possible.
When looking to partner with an online trading provider, traders should look for a company that not only embodies a client-centric ethos, but is also regulated, and offers reasonable pricing and uses the most advanced trading technologies available. Additionally, traders should consider the providers’ server reliability and execution speed.
In order to be a successful trader, you should educate yourself on trading best practises and pay attention to the trends and the associated risks. While numerous resources such as tutorials, applications, guides and videos are readily available on the Internet, it is important to note that fast information doesn’t always lead to instant success and true trading power and knowledge come from experience.
It’s therefore important to partner with a broker that has its finger on the pulse of the digital evolution, and still maintains the human touch that will help build a relationship based on trust.
In order to find the right trading partner, it is crucial to research the company and the regulations that they abide by. The best place to start is with the Securities Commission of The Bahamas (SCB) who keep an up-to-date register of all firms and their business activities.
Traders should weigh up the investment risks and rewards, and take into account whether they can afford the high risk of losing their money.
If it is too good to be true, it usually is. Be wary of schemes where it is too easy to open an account, too easy to deposit, too easy to trade and too easy to make money. This is a clear sign of limited regulations and processes.
It is also important to question that if your investment is too low, how is the brokerage making money? If this is the case there is often more at play than you may initially realise.
While the advent of technology has undoubtedly been instrumental in the progression of the trading sector, at the heart of the industry lies the client and technology evolves depending on how clients use it. Even in a digital world, human value is still key to success.
INFINOX is also available in African countries including Botswana, Tanzania, Ghana, Namibia and Mozambique.
