The availability of internet technology is helping the average person in any country to access all sorts of activities that were previously out of reach. For example, investing used to be reserved for large investors with multimillion-dollar funds, working on behalf of various institutions, banks, funds and similar organisations. Modern online investment platforms allow you to carry out various financial transactions without having to be directly present on the trading floor. Some platforms start with a few dollars as the first deposit, making trading accessible even to those without much money. All you need is an internet connection and a willingness to learn. If you register with an online trading platform, you will have access to all financial instruments 24/7, wherever you are. The online investment market does not trade physical commodities like the offline market, but financial instruments: currencies, stocks, commodity futures contracts (oil, gold), cryptocurrencies.

A relatively new but interesting financial instrument is ETF.

Let's take a look at what an ETF is, how to invest in an ETF and how to choose an ETF trading platform in Somalia.

Investing ETF funds

ETF stands for Exchange Traded Fund. In many ways, an ETF is the same as a stock fund, except that ETF shares are traded and traded on an exchange. If an ETF wants to increase its capital, it does so by issuing new shares (often to a single large investor), just as we know it from listed companies. ETFs have grown in popularity considerably over the past 30 years.

An ETF is traded in real time directly on an exchange.

The fund follows the movement of, for example, indices or currencies and therefore can increase or decrease in value.

ETFs may be suitable for you if you:

  • want to reduce the risk of your investments;
  • want good risk diversification with low commissions;
  • want to familiarise yourself with, for example, niche markets.

ETFs, like mutual funds, are good because they offer different risk spreads compared to stocks and also have low commissions.

Exchange traded funds allow you to invest in niche sectors and markets that conventional funds do not normally offer.

Investing ETF funds
Investing ETF funds

Investing in ETFs in Somalia. Choosing an ETF platform

To trade ETFs in Somalia, you will have to find a licensed intermediary broker who will give you access to online trading software. When selecting a broker, pay attention to:

  • the availability of a brokerage licence;
  • the quality of the online trading platform - easy and fast registration, availability of the necessary tools for trading, informativeness as well as simple and available options for deposit and withdrawal;
  • minimum deposit and withdrawal limits that are acceptable to you personally. Also take into account the size of the commissions for the services provided;
  • the availability of video tutorials and the possibility of online consultation.

Let's take a closer look at how to start trading on the online platform. 

Ease of registration

Registration on modern online platforms is always quick and easy, does not take much time and does not require much technical knowledge. To register, visit the official website of your chosen brokerage company, find the "registration" option on the website page and activate it. The system will redirect you to the registration page, where you have to fill in a few lines of the registration form with your correct email address, username and (sometimes) mobile phone number. You will also need to confirm your email address in order to start using the platform - once you have completed the registration form, the registration confirmation link will be automatically sent to the email address you provided. By activating the link you will activate your account.

Registration process
Registration process

Demo Accounts

Most of the high-quality online trading platforms offer a demo account to get you started. What is a demo account and what is it for? A demo account is a practice test account, which is fully identical to a real one, the only difference being that by using a demo account you are using fictitious money. The system will automatically credit the demo account with a certain amount of fictitious funds, which will allow you to get familiar with the platform and try out different methods of investing and trading. What's more, most platforms will allow you to upgrade your pool of fictitious funds if you need to.

Don't pass up the opportunity to use a demo account, and always start with one. 

Having a demo account is a sign of a reliable platform. You will learn and gain experience in trading, but you will not lose real money.

Select an account
Select an account

Convenient and easy deposit and withdrawal options

Once you have mastered the platform's functionality and feel confident enough to start live trading, you should activate a real account. To do this, make a deposit of at least the minimum amount, which is set by the platform. Different platforms set different minimum deposit amounts. You should choose a platform according to your personal financial possibilities and value for money. Modern platforms offer easy and affordable depositing methods, so there is no need to ask for details of the account or visit a bank branch. You will find all the tools to deposit directly on the platform by clicking on the "deposit" option. This can be a bank card or an online payment system - choose whichever is more convenient for you.

To buy an ETF, select the "funds" section on the platform's dashboard and enter the ticker of the selected ETF. You will see a section of the investment platform for working with the specified fund. This will open a trading room for you to work with the selected ETF. Here you will also have access to brief information - overview of the selected fund, statistics, current prices.

Account replenishment
Account replenishment

Availability of user-friendly tools for successful ETF trading

Thanks to recent innovations, the trading platform is now a powerful tool for investing. In addition to having access to all trading operations online, the platform also offers many additional features to facilitate your trading and reduce risk.

Stop orders, which are automatically set by the trader, are especially popular with experienced traders, as they can automatically close trades when these limits are reached. A stop loss order sets the lower limit of the asset price, and a take profit order sets the upper limit.

The platform also offers the option of using leverage on your trades. This is easy to activate, just click the "multiplier" option on the panel and select the multiplier you want. 

Do not use leverage unless you have sufficient trading experience!

Using the Take Profit Order
Using the Take Profit Order

Availability of Technical Analysis Indicators

Traders use technical analysis methods to make market forecasts. The technical method is based on specially developed technical analysis indicators. With the help of them traders define current market trends and develop their own trading strategies.

Indicators can be used separately, or you can use them as a complex, applying several ones and comparing their results. Modern trading platforms are comfortable to use, as built-in functions give an opportunity to choose one or several indicators at a time. Indicator indicators, when activated, are automatically superimposed over the chart of asset price fluctuations, which gives a vivid picture of the market.

The platforms offer the possibility to use almost all indicators known in trading. Convenient and simple settings allow you to easily add or delete indicators, as well as change their colour and way of display.

Indicators for technical analysis
Indicators for technical analysis

ETF Stock Market

There is a wide variety of ETFs, and one fund's sector can be very different from another. Some ETFs include different sectors (e.g., industrials, pharmaceuticals and IT technology) but are grouped by region, for example, the iShares MSCI Japan ETF tracks Japanese market performance, the MSCI Mexico ETF tracks the performance of Mexican companies. 

Choose a platform that offers a wide range of ETFs. In addition to ease of registration, ease of use, and limits that suit you, the platform should give you access to trading in the fund you choose and provide accurate and complete information about the other funds. 

A quality platform will inform you about the current prices of the assets, provide you with statistics for different time periods of your choice, provide a brief analysis of the fund and news about the selected fund. 

The more useful information you see on the platform, the better. This saves you from having to spend time collecting such data from external sources. Therefore, having a good ETF offering and being informative are signs of a good trading platform.

Types of ETFs
Types of ETFs

ETF investment in Somalia. Results

Actually, despite the accessibility and simplicity of operations from a technical point of view, investing and online trading are complex processes that require learning the principles of the stock market, complete immersion in the intricacies of stock trading and constant improvement of one's knowledge and skills.

The investment market is sensitive to any changes in the political and economic world, as well as in science, ecology, industry and so on. Therefore, a successful trader has to keep abreast of all important events which influence the financial market of his choice.

If the platform gives you access to the news section - which is very handy, be sure to sign up for updates.

Current news on the platform
Current news on the platform

To start investing in ETFs in Somalia, you will need to:

  • find a reliable intermediary in the form of a licensed broker;
  • register on an internet trading platform;
  • to learn how the platform works, using a free demo account;
  • activate a real account to be able to trade, replenishing it with a convenient method for you.

With the variety of platforms that you will find on the brokerage market, choose the one that suits your needs in terms of fees and which contains the tools and features that are important to you.

ETF trading is chosen by both experienced traders and beginners because this financial instrument helps save on commissions (buying an ETF is always cheaper than assembling a portfolio of stocks individually) and also diversify risks (because a decrease in price of one fund component is often compensated by an increase in price of the other).

Try yourself as a trader by registering in the demo version of the platform right now - it's a free opportunity to learn a new line of business and test your skills. Maybe internet trading will become your main business.

The financial services provided by this website carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose