Trading Stocks in South Africa on the JSE: Complete Guide

Trading Stocks in South Africa on the JSE

5 basics of how trading stocks in South Africa works

1. Choose a share trading platform

When choosing a platform, make sure it offers access to the JSE. South Africa does not have too many of such platforms, it is therefore important to make sure your platform of choice trades has the JSE. The most popular platforms at the moment are Easy Equities, FNB and Standard Bank Share Trader .

2. Open a share investing account

Once you have selected a platform, you will need to open an investment account. Most platforms have various packages, so make sure to choose an account that suits your investing needs.

3. Deposit funds

Before you can begin investing and buying shares on the JSE, you will need to fund your account with a deposit. If you are using FNB or Standard Bank you can transfer from one of your Checking or Savings accounts.

4. Start trading stocks

Most platforms provide research tools that allow you to filter available companies by sector. Once you have found the companies whose shares you would like to purchase, submit your order. The JSE does not trade on weekends and holidays, it only trades between 9am to 4 pm on business days.

5. Monitor your investments

Frequently login to your chosen investment platform to monitor your portfolio.

Trading Stocks in South Africa FAQ

When did stock trading begin?

The Dutch East India Corporation (VOC) was the first company to issue stocks to the general public in the 1600s, making it the first publicly traded company. Since then, stock trading has grown in popularity, with anyone now able to make orders using a broker through the internet for a little cost. It was difficult to trade stocks in the early twentieth century; it was a privilege reserved for the wealthy. It has gotten a lot easier since the internet came along.

There will be no more lengthy phone conversations to a broker to place a single trade. All of this may now be accomplished with the press of a mouse. The Johannesburg Stock Exchange (JSE), which is governed by the Financial Sector Conduct Authority, is in charge of trading in South Africa (FSCA).

What is a stock trader?

A stock trader or equity trader or share trader is a person or company involved in trading equity securities. There are two types of stock traders, speculators and investors.

What is stock trading?

Trading stocks is the buying and selling of stocks on a stock exchange. The idea is to buy while it is low in value and sell when it is high. However, some prefer to buy and hold with the hope of earning profits(dividends). Trading Stocks involves looking for opportunities in the stock market and capitalizing on them.

What is a Speculator trader?

A speculative trader is someone who buys stock and retains it for a short amount of time. Speculative traders typically keep stocks for no more than six months. This necessitates a solid plan and a more active approach to stock trading. To beat the market, these traders rely on their sophisticated trading talents. Because their trades are short-term, they are continually seeking for the next stock to buy, the need to monitor the market virtually every day has become a lifestyle.

Traders who take on too much risk tend to lose more money by opening too many trades or positions in the stock market and closing them quickly, often within hours. If you want to become a speculative trader, you should invest money that you are willing to lose. For speculative investors, the danger is simply too big; only a few traders persist for a long time trading; otherwise, many lose their money in a short period of time.

Speculative traders do not stay in the market for long periods of time before taking profits; instead, they take profits in small increments based on the number of trades they have made. Emotions are the most common cause of failure in this form of investing, so you must handle them carefully when going down this path.

What is a stock market investor?

These are traders who are looking to hold stocks for a longer period that is more than one year. Unlike speculative, investors hold stocks for a long-term and don’t let short-term market movements determine their buy or sell.

Our known stock market investors in South Africa are Pravin Gordon, Patrice Motsepe, Cristo Weiss and others. They have invested in many companies and held their shares over time. As an investor, trader dividends are the best way to recover your investment while the stock price is growing.

The good thing about investing is that in as much as stocks take a downturn they usually come back to their original price. Unless if the company is closing down you can lose all or some of your investment depending on the type of stocks you are holding.

How can you start trading stocks in South Africa?

If you are a first-time stock investor you need to keep things simple. To make it easy for you, find a broker or an investment broker to do this for you and give you advice when necessary.

There are many companies that can help you start building a stock portfolio whether you want to diversify or buy similar stocks it is all up to you. Companies like Allen Gray and Grant Thornton can help you get started. If you are familiar with the stock market or confident enough to start on your own then you can utilize this information below.

How do I start to trade in stocks in South Africa?

Open an account with a JSE registered brokerage

To get started, you need to open an account with a trading Brokerage. This doesn’t require much. You will need to provide the necessary details to open an account of which brokerages use a question and answer method to help you complete the signup process.

There are FICA documents that you will need to send such as a copy of your ID, proof of residence or passport copy. Should you not provide your FICA documents the Brokerage won’t allow you to withdraw money from your account. It’s best to provide this information as early as you open your trading account.

Broker RateWeb Rating Promotion/ Key Selling Point Minimum Deposit Learn More
XM Best Forex Brokerage
  • Free R347 to start trading. No need to make a deposit.
  • 100% Deposit Bonus of Upto R7000
  • 20% Deposit Bonus of up to R65 000
R 0.00
iq options
 R 160.00
  • 20% welcome bonus valid until 30 April 2020. Minimum deposit of R19 000 to unlock the bonus.
R 2 000.00
  • Earn R347 tradeable credit when you join FXTM
  • The more you trade, the more you get paid. You’ll get R95 back in cash every time you trade, and have the chance to earn up to R190 000
R 9 500.00

Set a budget

You need to set a budget for your stock trading account. Make sure you use appropriate apportionment measures that will give you favorable results. If you are going to buy stock try splitting your budget into different categories.

Simply put, have a budget for telecommunications stocks such as Vodacom, banking stocks such as Absa group and so on. Furthermore, don’t risk most of your money on one stock like buying RAND Merchant stock with 50% of your budget.

Download a demo account

If you are not very confident trading stocks on your own, you can start by opening a demo account. This account is for free and you can use it to test your predictions before you start trading with your actual money.

Educate yourself with market and limit orders

Market orders buy and sell stock as soon as it is at its available best price. While limit order buys and sells stocks at a specific price that you have set. The ability to utilize these functions before you start trading will make you manage your account even when you are not available.

Have a stock trading strategy and keep it

If you are trading stocks you need to have a strategy. You can’t just start by placing trades and hope for the best. Your strategy is the one that will make you money.

You need to understand your strategy and keep using it if it works. A good trader never changes the winning strategy. If your strategy turns otherwise then you need to formulate a new one.

The best thing when trading is to keep your emotions in check. If you get impulsive trading you will lose and make wrong decisions. Trading stocks is a skill and requires some level of attention especially to detail.

Your strategy should be built on taking accurate measures and not letting anything that you don’t understand slip-up. Follow great investors such as George Soros and Warren Buffet. You will likely pick up some of the greatest strategies in trading stocks.

Trading Stocks has become a trade and you need to be careful of how you go about starting. Make sure that the Brokerage that you are using is registered with FSCA. If your Brokerage is giving you troubles you can report them to the FSCA and the FSCA will deal with the matter accordingly. You can sign up for an account with IQ option or plus500 to get started.



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