Generally, indices are a natural next step for people who deal shares. This is because when you trade indices you get exposure to several stocks through a single position. Additionally, you can also invest in index ETFs, but trading is more liquid and based on the real underlying price.
Note that with more liquidity, lies the risk that traders will not be able to buy or sell an asset on time without negatively affecting the price of the asset.
Some of the factors that affect an index’s price include big events like interest rate decisions, a country’s economic performance and many others. This is why it’s prudent to use fundamental analysis to support your decision to take a particular position.
Forex trading tends to be the preferred market by experienced traders, as it is more complex in comparison to indices trading. You must ensure that you know how to trade forex, have a good grasp of the method you’re going to use and a solid trading strategy before you get exposure.
As a beginner, it’s important to supplement your knowledge before you start trading with real money. You can use IG Academy – a self-learning hub, complete with comprehensive trading resources – to help you learn at your own pace.
Beginners are encouraged to open a demo account thereafter. This is a simulated market environment that aims to recreate the experience of ‘real’ trading as closely as possible.
You’ll get a feel for how different products and financial markets work without the risk of losing any real money, so that you can explore and experiment using different trading strategies with confidence.
When you open a demo account with us, you’ll be given immediate access to a version of our online platform, along with a pre-set balance of $10,000 and R1,000,000 in virtual funds to practise with. Once you’ve gained enough confidence and you’re familiar with trading on the platform, you can decide to upgrade to a live account.
