Day trading platform in Somalia
There are currently a huge number of different trading strategies for the international financial markets. They can all be grouped according to various criteria, but the main one is the duration of trading. Based on this criterion, there are three types of trading - short-term, medium-term and long-term. There are no particular requirements for selecting a particular timeframe. But your choice may determine the success of your trading.
Today we take a closer look at day trading in Somalia and discuss its benefits and what criteria to use when choosing a platform for day trading.
The essence and characteristics of day trading
Day trading is short-term trading in securities. A day trader buys securities and sells them over a very short period of time, usually during the day. In doing so, he tries to profit from small fluctuations in prices. These are positions which are opened or bought and then closed or sold after only a few hours, minutes or even seconds.
Many novice traders prefer to gain experience with short-term trades by conducting intraday trading. There are several reasons for that. Intraday trading is possible with relatively small starting capital. This trading method is also quite dynamic as all trades are executed within one trading day. Short periods of time allow you to test different trading patterns.
Two of the most popular short-term trading strategies are:
- Scalping or pipsing - positions are opened and closed within time slots of one to thirty minutes.
- Intraday trading - this approach is used for trades from a quarter of an hour to four hours.
In order to successfully make money from short-term strategies, traders clearly define where to enter a trade and where to exit it.
The main advantage is that a large number of positions are opened, so the percentage of losing trades will always be lower than the percentage of profitable ones, and the trader is left with a profit.
But there are also disadvantages:
- Short-term trading involves a lot of psychological and emotional stress, so it is important to have strict self-discipline.
- Keep in mind the commission that is charged for each transaction.
- Working on a computer is time-consuming and you need to be able to keep up with the price charts at all times.
Modern online trading platforms are equipped with handy trading tools that facilitate the work of the day trader. Let's look at these tools in more detail below.
Choosing a platform for day trading
What is an online trading platform?
An online trading platform is a computer software provided by a brokerage company which enables us to trade online and access all transactions and financial instruments in real time.
As day trading is different from other types of trading, a day trading platform should also have a certain set of features. It is important not to miss the moment when the price goes up or down, so the platform should provide the possibility to set automatic stop orders. Also an important feature is the presence of technical analysis indicators - the main tools of a day trader to make trading decisions. Of course, the platform should be easy to use - when choosing software for trading, pay attention to the ease of registration, available options for deposit and withdrawal, the clarity of the interface of the program. An important issue is the availability and size of commissions for the services provided - check the rates before you use them.
The brokerage market in Somalia offers a wide range of online trading platforms. Choose a platform with the above features in mind. Below, let's take a closer look at the main criteria when choosing a platform for day trading in Somalia.
Possibility to open a demo account
After logging in to the platform you will automatically be prompted to open a live or demo account. We strongly recommend that you start with a demo account. A demo account is a demo version of a real account, with which you can practice making transactions on the trading platform. On the account you will immediately see a certain amount of fictitious money (the amount may vary from site to site), which you can use for test operations without fear of losing, because you will not have to return the money and the purpose of their use is just to learn. You can renew the amount of fictitious money as many times as you want. You can use the demo account for as long as you like.
Demo Accounts allow you to try trading without any real risk. You should only start trading with real money once you have practiced with the demo account.
Convenient depositing options
All trading programmes require a minimum deposit when activating a live account. The amount of this first funding varies depending on the platform. Regardless of the trading application, the process of depositing or withdrawing funds is virtually the same. You should click on the "deposit" option, and the system will automatically redirect you to the payment section, where you will see a list of possible systems you can use to make a deposit. You may choose to deposit via a bank card or one of the internet payment systems offered by the system. You will be credited instantly, and you will be able to use the money immediately to trade.
Withdrawing money from your trading account is just as easy, using the same options as when you deposited it.
Availability of trading tools
When choosing a trading platform for day trading, the trader should pay attention to the availability of mandatory tools for this type of trading - stop orders. What are stop orders?
A stop order is a type of pending automatic order to close a position in the event the price of an asset reaches a certain level. We distinguish between two main types of stop orders: stop loss and take profit.
Stop Loss is an exchange order placed by the trader in order to limit losses in case the price moves in the direction opposite to that of the open transaction. If the market price reaches the value specified in the order, the transaction is closed.
Take Profit is a type of pending order to broker to close a transaction when price reaches a certain level - profit. If the price reaches the Take Profit level, the trade will close automatically and fix the profit made.
Day trading is characterised by short, sometimes even second trades, so having the ability to set stop orders on the platform is very important when choosing a trading platform.
In addition, modern platforms provide access to leverage at the touch of a button - on the panel you will see the 'multiplier' option, which prompts you to select a multiplier (leverage ratio) and immediately activate your leverage. It is worth remembering that by increasing the amount of a transaction with leverage you also increase the risk of the transaction, so the use of leverage is recommended only to experienced traders.
Availability of technical analysis indicators
Day traders usually try to anticipate future price developments on the basis of current reports and/or, above all, on the analysis of technical charts.
Technical analysis indicators are various mathematical functions of different parameters (price, trading volume, etc.), which show the trader the most probable further development of the price movement.
Indicators can be divided into many groups. The most famous ones are trend indicators for technical analysis and oscillators. From the name of the trend indicators we can already understand that their main task is to indicate the current trend (upward, downward or sideways). Oscillators have a different task - they usually show areas where price has already become unreasonably high and is likely to turn down, or, conversely, the areas where price has already become too low and is likely to turn up.
When choosing a platform for day trading, examine the technical analysis indicators that are available on the platform. A quality platform offers all known variants of popular technical indicators and also allows the use of several indicators on a single quote chart, in any combination. Test the indicators available on the platform by using a demo account.
What is needed for successful day trading?
As well as choosing the right trading platform, it is important to remember that trading is not a game of chance, but an entire science. Trading at random will not bring you profit. It is important to understand the laws of investment, the principles of the stock market, the ability to read and analyse quotation charts, to understand technical analysis and be able to apply indicators for analysis, the habit of following economic news and making your own forecasts.
All of this involves constant learning and polishing one's knowledge and skills. Modern trading platforms offer entire training sections with free video tutorials on trading. Be sure to take advantage of this opportunity and review the lessons. Also, use external, trusted sources of information to educate yourself.
Follow the news. There is a special news section on the platforms, which will help you keep track of all the important economic events without interrupting your trading - just enable notifications in the settings, and you will get a notification about a new event right on your trading room screen.
It is important to develop your own trading strategy and follow it clearly. In order to develop your own trading strategy, use a demo account. Try different methods and approaches, look at the results you get, analyse your actions and draw the right conclusions.
It should be noted that psychologically day trading is very stressful in the long run, as you often have to make serious investment decisions quickly, and you also have to deal with bad decisions. It takes a lot of experience, knowledge, strong nerves and persistence. So becoming a good intraday trader is not easy, but definitely possible. Do not expect positive results the very next day - it is important to be cautious but persistent.
Open a demo account today and try out the day trading and the day trading platform in practice - with a demo account it's easy and free! Maybe day trading will become your main method of trading.