Fred Razak, Chief Trading Strategist from CMTrading, has been trading on the financial markets for over two decades. And as the award-winning brokerage celebrates its 10th anniversary, Fred offers his perspective on questions anyone interested in online trading should ask their broker before investing their hard-earned money. 

1. What is the minimum amount of money I need to deposit to start trading?

"There is no fundamental right or wrong answer here. Whatever you choose, you must be realistic and give yourself some leeway when you are still learning. Many people start with small amounts – say 100 dollars, for example – which is CMTrading's minimum.

"However, if you want to take trading seriously and turn it into an income, you need to invest in it twofold – both monetarily in your account and equally in educating yourself. If you're a beginner, start investing time in your education before diving in head-first and risk losing money you can't afford to lose."

2. What variety of local and international trading markets do you offer?

"There are several markets you can trade on. Locally, you can trade on the JSE (Johannesburg Stock Exchange) and the South African Rand vs other currencies if you get into the forex trading space. Internationally, you can trade US stocks, which are very hot right now, and you can trade on international indices like the Dow Jones.

"The Dow Jones includes some of the largest companies in the world, like Apple, Microsoft, Netflix, Google and Apple, which you can trade in real-time. And you want to be where the big players are. You can also trade in cryptocurrencies, like Bitcoin trading, which can be volatile and unpredictable."

3. Can I trade on other assets?

"Yes, you can also trade the commodities markets, which offer various assets – like oil, gold, agricultural produce and other options. In volatile times, it can often be lucrative to trade on commodities like oil, which is currently fluctuating rapidly.

Gold is often considered a haven for investors during tough economic times. And agricultural stocks can also be exciting to watch, depending on what is happening with global supply – something to look out for during the Russia/Ukraine conflict."

4. Can I lose more money than what I deposited into my account?

"CMTrading’s system will stop you out once you get into 20% margin, which means for example if you deposited $100 and opened a position and the open trade carries anything more than $79 loss, the trade will be closed automatically. This is used to both protect yourself and the broker.

You would then need more money in the account to carry the trade forward. I always suggest that it's better to stay within the parameters of your available capital and trade responsibly."

5. Do you have any protective measures to prevent losses from happening?

"In most cases, you can place a stop-loss order with your broker to minimise your losses and protect yourself. For example, a stop-loss order can be placed to buy or sell a specific stock once the stock reaches a certain price.

"For example, setting a stop-loss order for 10% under the price at which you bought the stock will limit your loss to 10%."

6. Which banks do you trade through?

"Most reputable brokers only trade through respected major financial liquidity providers."

7. What trading platform do you use?

"CMTrading predominantly uses three trading platforms that are popular in the markets. First, the MT4 (MetaTrader 4) desktop trading app is arguably the most professional in its class. The graphs, charts and tools are very user-friendly and easy to navigate. Your second option is the mobile version, which is also very popular.

"Alternatively, you can use a web-based trading platform instead of an app. So, you trade via your browser rather than downloading software to your computer."

8. How do I deposit or withdraw money from my account?

"A licensed broker will always allow you to maintain control of your money. You should be able to transfer money through any registered financial service providers, which should all be linked to the broker's platform."

9. What indicators, chart types and timeframes do you have on your trading platforms?

"Real-time charts and indicators are your greatest tools. An MTF (Multiple Time-Frame Indicator) platform is a widely used and highly effective source of information and insight into the markets, using daily, weekly and monthly timeframes. You can also access up-to-the-minute charts, four-hour charts and an array of other options."

10. Do you offer any trading education?

"Before you invest a cent, you should educate yourself. Any good broker should offer you training – and it shouldn't come at an exorbitant fee. At CMTrading, for example, we give several courses from basic to a professional level and host webinars and seminars, which are often free of charge.

"Be wary of any company that wants to charge you a large fee for a trading course, as your broker should be providing a certain level of training, even when you make a small investment in their platform."

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For more information on CMTrading, visit their official website at www.cmtrading.com or call +27101571989, and one of their friendly staff will assist you.

CMTrading is the brand name of Global Capital Markets Trading Ltd (A Seychelles company, company no. 104785)