Stock trading is one of the most accessible ways to build wealth over time—and thanks to online platforms, more South Africans are starting to invest in the stock market than ever before.
But if you’re just getting started, the process can seem complicated.
This beginner’s guide explains the basics of stock trading, how to get started, and what every new trader in South Africa should know before buying their first share.
What Is Stock Trading?
Stock trading involves buying and selling shares of publicly listed companies on stock exchanges.
When you buy a stock, you’re purchasing a piece of ownership in that company.
The value of that stock fluctuates based on factors like company performance, industry trends, and economic conditions.
There are two main types of stock traders:
- Long-term investors (buy-and-hold strategy)
- Active traders (frequent buying and selling to profit from short-term price changes)
As a beginner, you can choose the approach that suits your goals and risk appetite.
How Does Stock Trading Work?
When you place a trade on a stock, you’re buying it at a specific price with the intention of either:
- Selling it at a higher price to make a profit, or
- Holding it long-term to benefit from dividends and growth
Stocks are traded on exchanges such as the Johannesburg Stock Exchange (JSE) or international markets like the NYSE or NASDAQ. Most online brokers give you access to both local and global markets.
Benefits of Stock Trading
- Ownership in companies you believe in
- Potential for long-term growth
- Dividends (some companies pay shareholders regularly)
- Access to global opportunities
Risks of Stock Trading
Like any investment, trading stocks involves risk:
- Share prices can drop based on company news or market sentiment.
- Economic downturns can impact entire sectors.
- Overtrading can lead to unnecessary losses.
That’s why risk management and education are essential before trading real money.
How to Start Stock Trading in South Africa
Here’s a step-by-step guide for beginners looking to start trading stocks:
1. Learn the Basics
Start by understanding key terms:
- Shares/Equities: Units of ownership in a company
- Dividends: Payouts from profits to shareholders
- Bull market: Rising prices
- Bear market: Falling prices
- Portfolio: Collection of your investments
Use free educational resources, like those on Solis Markets Hub, to strengthen your foundation.
2. Choose a Regulated Stock Broker
To trade stocks online, you need a trading account with a registered broker. Look for:
- FSCA regulation (for South African brokers)
- Access to both local (JSE) and international markets
- Low trading fees and commissions
- A user-friendly platform and good customer support
Some well-known platforms used in South Africa include EasyEquities, IG Markets, and FNB Share Investor.
3. Fund Your Account
Once your account is verified, you can deposit funds via:
- EFT (electronic funds transfer)
- Credit/debit cards
- Instant EFT or wallet payments (depending on the broker)
Start with a small amount until you’re comfortable navigating the platform.
4. Research Stocks Before Buying
Don’t just buy popular names—do your homework. Consider:
- The company’s earnings and revenue
- Industry trends
- Market news
- The company’s performance history
Use tools like company financials, stock screeners, and analyst reports to guide your decision.
5. Place Your First Trade
After selecting a stock:
- Enter the number of shares you want to buy
- Choose market or limit order
- Review transaction costs and confirm your trade
Once executed, the shares will appear in your portfolio.
6. Monitor and Manage Your Portfolio
Successful trading isn’t just about buying stocks—it’s about tracking your performance and adjusting your strategy over time.
- Set goals for each investment
- Diversify across industries or regions
- Use stop-loss orders to limit downside risk
- Avoid emotional trading decisions
Tips for Beginners
- Start with low-cost stocks or ETFs to spread risk
- Avoid day trading unless you’ve gained experience and developed a solid strategy
- Invest in what you know—choose companies and industries you understand
- Keep learning through trusted resources like Solis Markets Hub
Final Thoughts
Stock trading is one of the most effective ways to grow your wealth over the long term—but it’s not something to rush into.
For beginners in South Africa, the best approach is to start small, stay informed, and trade with purpose.
By choosing a regulated broker, doing your research, and developing a simple strategy, you can build a solid foundation in the world of stock trading.
To explore more educational content, platform comparisons, and beginner guides, visit Solis Markets Hub—your trusted source for online trading insights in South Africa.
