Trading can seem intimidating, especially if you’re just starting out. Charts, candlesticks, market jargon—it’s a lot. But at its core, trading is about buying and selling with a strategy. Whether you’re looking at stocks, crypto, forex, or commodities, understanding the fundamentals can help you make more informed and confident decisions.
Let’s break it down.
What is Trading?
Trading involves buying and selling financial instruments—like currencies, cryptocurrencies, or company shares—usually with the goal of making a profit. Traders analyze market trends, news, and price movements to decide when to enter or exit a trade.
There are different time frames and styles of trading:
- Day trading – quick trades that open and close within a single day.
- Swing trading – holding positions for a few days or weeks.
- Position trading – long-term investing with fewer trades.
Your style depends on your goals, your risk tolerance, and how much time you want to dedicate.
The Markets You Can Trade
At ETA, we focus on four main areas:
- Stocks: Shares in a company’s ownership.
- Crypto: Digital assets like Bitcoin and Ethereum.
- Forex: Currency pairs like USD/NGN or EUR/ZAR.
- Commodities: Physical goods like gold, oil, or agricultural products.
Each market has its own rhythm and risk, but they all follow the same basic principles of supply and demand.
Key Concepts to Know
Here are some foundational terms that every trader should understand:
- Bid/Ask Price: What buyers are willing to pay (bid) vs. what sellers want to receive (ask).
- Spread: The difference between bid and ask. Narrow spreads usually mean high liquidity.
- Volume: The number of units traded. High volume means a more active market.
- Leverage: Borrowed capital used to increase potential returns. It also increases risk.
- Stop-Loss Order: A tool that automatically closes your trade to limit losses.
You don’t need to memorize these overnight—just begin noticing them as you explore the platform.
Technical vs. Fundamental Analysis
There are two main ways traders evaluate opportunities:
- Technical Analysis: Focuses on price charts, patterns, and indicators like RSI or moving averages.
- Fundamental Analysis: Looks at the bigger picture—news, economic trends, and the financial health of companies or currencies.
Most successful traders use a mix of both.
Managing Risk is Everything
Before thinking about profits, understand this: no trade is guaranteed.
That’s why smart traders always manage their risk. Here’s how:
- Only invest what you can afford to lose.
- Use stop-losses and take-profit levels.
- Diversify across different assets.
- Don’t chase losses. Stick to your plan.
Good trading is more about consistency than luck.
Start Small, Learn Continuously
At ETA, we believe trading education should be accessible. That’s why we offer clear, locally relevant resources for African traders looking to grow. Start with small trades. Track your progress. Learn from your wins and losses.
The markets will always move—but your approach is what defines your success.
