Shares Trading: How to Start and Succeed

Imagine the following: It’s morning coffee, reading headlines, when you see that a company you’re familiar with, let’s say a well-known brand like Netflix or Naspers, has released a good set of earnings. Its share price begins to climb. You place a buy order within seconds on your cellphone. At the end of the week, your position is in profit, and you’ve just ended your first successful trade.

Trading in shares is the sale and purchase of share ownership in quoted firms. Such units of share, also known as shares or equities, are purchased and sold on organized exchanges or via the internet. No longer the preserve of stockbrokers on trading floors or institutional investors, trading in shares can now be accessed by nearly anybody with an internet link, a dealing account, and a basic understanding of how markets function.

Why do millions engage in this form of trading? Because it offers real opportunities for wealth creation. From disciplined long-term investors to short-term traders capitalizing on market volatility, the stock market rewards those who can interpret signals, manage risk, and act with strategy. Whether you’re looking to build a retirement portfolio or earn active income from daily trades, share trading offers a flexible, engaging path into the world of capital markets.

Thanks to fintech technology and online brokers, it’s never easier to take the plunge. Easy-to-use interfaces, low minimum account balances, free educational resources, and practice accounts have made investing in the share market more accessible than ever, even for complete beginners.

Here, you’ll find out what shares trading is, why it’s so enticing, how the markets work, and what it takes to succeed. Whether you’re making a start in buying shares for the very first time or sharpening your strategy as a seasoned trader, you’ll receive straight-talking guidance, tried-and-tested methods, and sensible risk management advice to guide you along the way.

What is Shares Trading?

Trading in shares is the buying and selling of the shares of a company, or equities, on the financial markets. As opposed to long-term investment, holding shares for years, trading is typically done with a shorter holding term in order to profit from price movements.

You may sell and purchase shares directly through the share markets or using derivative instruments like Contracts for Difference (CFDs) and Exchange-Traded Funds (ETFs). While traditional investing might be holding equity shares to enjoy dividends and price appreciation over the long term, trading focuses on profiting from short-term volatility.

Types of shares

Traders primarily trade in:

• Common shares – voting rights and potential dividends
• Preferred shares – dividend guaranteed and priority on liquidation
• Penny stocks – low-price, high-volatility equities with speculative promise

Understanding the share types and performances in the market goes a long way in establishing an educated trading plan.

Why Shares Trading Is So Popular With So Many Traders

Why is share trading so well-liked? For starters, shares offer a concrete connection to real businesses. Buying shares in Apple or Tesla doesn’t just feel tangible, because it’s investing in brands you know.

Here’s why investors adore stocks:

• Growth potential: Stocks like Amazon have provided massive returns to early investors.
• Dividends: Shares provide periodic dividends.
• Liquidity: Blue chips are easily bought and sold.
• Transparency: Public companies must provide financials.
• Diversification: Owning many shares in the market translates to exposure to many industries.

Investing in shares, unlike crypto or forex, is less volatile in the view of most traders due to regulated exchanges as well as documented market history.

For new market traders, e.g., those venturing into companies selling shares in South Africa, the domestic country equity market offers exposure to both local growth stories and multinational global giants listed on the Johannesburg Stock Exchange (JSE).

The Market Drivers That Move Share Prices

You need to understand what moves the markets to be a successful share trader. Share prices do not move randomly, they respond to a high-level interaction of economic, corporate, and geopolitical drivers. These drivers shape the expectation of a company’s future value in the minds of investors and determine the demand for its equity shares. The following are the drivers that every trader needs to look out for.

1. Financial Results and Earnings Reports

A company’s profit and loss accounts for the quarter and year are one of its most potent share price drivers. They provide some indication of revenue, margins, cash flows, and outlook for the future — key parameters that investors use to assess performance.

For example, on May 1, 2025, Apple reported its fiscal second-quarter earnings, revealing stronger-than-expected iPhone sales. The company announced that iPhone revenue had climbed 2% year-over-year to $46.84 billion, contributing to total revenue of $95.4 billion, a 5% increase from the previous year. Net income stood at $24.78 billion, or $1.65 per share, surpassing analysts’ expectations.

Despite these positive results, Apple’s stock experienced a decline in after-hours trading. The drop was attributed to CEO Tim Cook’s warning about potential $900 million quarterly cost impacts due to ongoing tariffs.

2. Macroeconomic Indicators

Other than corporate basics, broad economic figures can also profoundly impact trading sentiment in shares. Data such as GDP growth, inflation, consumer spending, and unemployment rates dictate investor expectation and sentiment.

For instance, a softer-than-expected US inflation reading can aid growth-sensitive equities by indicating that interest rates will remain lower for longer, a positive environment for risk assets. In contrast, higher inflation can prompt monetary policy that is tighter, which has a tendency to compress equity investment returns.

3. Industry and Sector News

What happens in one sector can affect a batch of comparable stocks, sometimes regardless of company-specific fundamentals. Upcoming regulations, innovation, supply chain disruption, or consolidation can all stir up sector movement.

Take, for example, the clean energy sector. A news report about a government subsidy of clean energy is enough to fuel some equity investment opportunities in solar, wind, and battery technology. Similarly, a ban on internal combustion engines in large cities could devastate traditional car manufacturers but launch electric car makers’ stocks into the stratosphere.

4. International Events and Geopolitical Risk

The global share market is extremely sensitive to what happens in the world. Pandemics, wars, political instability, and international conflicts introduce volatility which usually translates to increased volatility in listed shares.

When Russia invaded Ukraine in 2022, the global markets tanked. Energy stocks rose on supply fears, airline and tourism equity shares declined on geopolitics. At the start of the COVID-19 crisis as well, panic and fear had triggered one of the fastest stock market plunges in history, and then a technology-driven rebound with work-from-home and online services being the new order.

5. Central Banks’ Monetary Policy Decisions

Central bank policies, e.g., monetary policies of the Federal Reserve, European Central Bank, and South African Reserve Bank, greatly influence share trading activity. Policy announcements, interest rate decisions, and bond buyback programs are considered important by traders worldwide.

When central banks lower interest rates, borrowing becomes cheaper for businesses and consumers, a situation that is bound to encourage investment in the share market. Conversely, rate hikes are bearish for shares because they make the cost of finance more expensive and decrease the spending power of consumers.

Even verbal hints by the heads of central banks, forward guidance, will move the markets. A hawkish comment by a Fed Chair will cause high-growth tech stocks to fall, but dovish utterances will buoy the spirits of investors and foster risk asset rallies.

In all, successful share trading is about more than picking the right shares. Share traders must watch out for the big forces that push share prices higher or lower. By tracking company earnings, watching macroeconomic news, following sector trends, monitoring world events, and interpreting monetary policy, you form a solid understanding of the markets, and a clear edge in your trades.

Your First Share Trade: A Step-by-Step Guide

Entering the shares trading arena can seem intimidating at first, but it isn’t as difficult as you think, if you have the right broker and the right tools. Below is a step-by-step guide to take you from eager spectator to seasoned trader.

Step 1: Open a Trading Account

To start trading in shares of corporations, you should have an account with a reputable broker like JustMarkets. Look for platforms that offer:

• Broad range of shares for trading
• Real-time market quotes
• Low or no commission fees
• Real-time dealing
• Access to international equities and instruments like CFDs

Registration is typically quick, taking only a few personal details and ID verification to comply with KYC regulations.

Step 2: Fund Your Account

After approval of your account, it’s now time to deposit your first amount. Select brokers that provide local and foreign payment options, process instantly, and have no hidden charges. Invest small, if it’s your first time investing in the share market.

Step 3: Decide What Shares to Trade

This is where research kicks in. Begin with companies you are familiar with, perhaps well-known brands, consistent dividend payers, or businesses in a growing industry. Sites such as JustMarkets offer resources to investigate share types, market movers, and top instruments.

If you’re trading in South Africa, you might examine companies providing South African shares via the JSE or gain exposure to international behemoths via international listings.

Step 4: Perform Probing Research

Before getting into a trade, scan:

• Financial reports (revenue, net income, borrowings)
• Current news (new products, litigation, earnings)
• Market sentiment and broker consensus
• Technical analysis (moving averages, RSI, support/resistance)

Utilize screeners to sort shares by sector, volume, or price. For short-term shares trading, take a closer look at volatility as well as liquidity.

Step 5: Enter Your Trade

Decide on the size you want to buy in shares or CFDs. Choose a limit or market order and add optional parameters like stop-loss or take-profit levels. Review and confirm your trade.

Step 6: Monitor and Adjust

Once a position is entered, keep an eye on:

• Price movement and news for your chosen equities
• Versus benchmarks
• Entry and exit opportunities

Use trading platforms to create alerts, log your decisions, and keep up with live streams. Replaying trades, even the losing ones, makes you better over time.

Trading Strategies You Can Actually Use

Regardless of your level of experience, profitability in shares trading boils down to having a clear, reproducible strategy. Here are tried-and-tested strategies ranging from beginner to advanced, but usable with the right mindset and tools.

1. Trend Following

This is a classic approach that involves determining and trading in the direction of an established trend. Traders utilize technical indicators like:

• Moving averages (50/200-day)
• Trendlines
• MACD (Moving Average Convergence Divergence)

If a stock is continually making higher highs and higher lows, it can be a sign of an uptrend. Trend-following is best performed in markets where equities are being driven by strong momentum, i.e., earnings season or during economic boom times.

2. Earnings Plays

These are derived from a company’s earnings reports. Day traders short or buy stock equity before or after reports based on expected results or volatility. Prepare with the economic calendar and earnings preview reports.

Example: A trader can go long on a firm that has a chance of beating expectations or short one which is facing resistance.

3. Day Trading

Day traders sell and buy stocks within a day, with positions overnight. The approach is driven by breaking news, technical patterns (flags, breakouts), and momentum meters.

Best for volatile markets, day trading requires:

• Thorough risk control
• Large-cap stocks to short
• Disciplined and quick decision-making

4. Swing Trading

Swing traders attempt to profit from price “swings” that last from days to weeks. They employ a combination of technical indicators and macro themes.

You can buy after a pullback in a strong uptrend or sell short after a reversal signal. It is best for traders who are unable to monitor markets during the day but would still want to be actively involved in trading shares.

5. Buy-the-Dip

You buy shares after their temporary decline, as long as the underlying business is still strong. Traders wait for signs of selling exhaustion and enter when prices get to a strong zone.

For example, a sharp drop in technology stocks due to sector rotation can provide an opportunity to buy established names at a lower price, a strategy highly favored by investors who combine equity investment and trading.

6. Sector Rotation

This involves rotating money out of one sector and into another sector based on macro trends or cycles in the economy. For instance, traders can rotate into defensive sectors like healthcare during downturns and rotate into tech or financials when the economy accelerates.

Avoid Rookie Mistakes

Novice traders lose money not due to the market, but due to avoidable errors. Here’s how to sidestep them:

• Protect capital first: Use stop-losses to contain losses. Never risk more than 1–2% of your capital on a trade.
• Balance risk and reward: Seek trades in which the possible profit is greater than the risk. A good risk-reward ratio is crucial.
• Manage your emotions: Greed and fear are your worst enemies. Be disciplined and never chase losses.
• Diversify your portfolio: Never invest all your capital in one industry or stock. Even if you have good shares in hand, diversify your investment.
• Refine your skills before live trading: Use demo accounts for testing strategies. Learn how the platform works and master your style of trading.

Your Next Step in Shares Trading

The share trading world is waiting for all of you who are willing to learn, attempt, and improve your techniques. With knowledge of the market’s behavior, selecting the right types of shares, and applying good strategies, you can turn a profitable habit, be it trading full-time or considering equities investing as a sideline.