CM TRADING FOREX BLOG

Trade popular tech stocks including Amazon in South Africa

12-07-2019 | ( words)
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About Amazon

The company was founded in 1994 by Jeff Bezos and banking on the innovation and disruption of existing technologies, Amazon has managed to revolutionize several segments including e-commerce, technology, and cloud computing. Amazon now serves millions of customers across the world with electronics, food, video, and music streaming, eBooks and their proprietary devices like e-readers, tablets and voice-activated smart assistants.

You may have heard about Amazon Web Services, Twitch Tv and IMDb some of the many subsidiaries under the Amazon umbrella. All these started from a company that essentially started out as a marketplace to exchange books but later expanded to the robust ecosystem of apps and services Amazon offers today.

If you are sorting by revenue, Amazon is actually the largest internet company in the world, placing it in the same tier as Google, Apple and Facebook. The numbers speak for themselves and they are staggering. Amazon’s revenues for 2018 hit the $74.9384 mark with almost 650,500 employees on its payroll.

 

Trading Amazon stocks

It’s without question that Amazon, in South Africa, is the most prevalent asset in a trader’s portfolio and South African investors are considering the stock as one of the most valuable investments in 2019.

In truth, for the last few years, Amazon has proved to be one of the most consistent performers across all U.S indices. At the time of writing, the stock is currently trading at the $2020 range, a significant jump from last month’s $1690.

If you want a piece of the juggernaut’s stock however, you will need to sign up with a broker who can facilitate your trades. Forex brokerages offer more opportunities than a traditional stock exchange broker and prospective investors will find that trading Amazon in South Africa is much easier and accessible with a forex account.

For example, the incredibly favorable opportunity to profit during market downturns just one of the several advantages of trading forex.

Amazon SA traders enjoy:

  • Lower deposit requirements making entry to the market widely accessible
  • Competitive pricing that provides clients with lower transactions
  • Leverage that increases a trader’s buying power and therefore his profits
  • Comprehensive learning materials, 24/7 support, and one-on-one coaching

 

Amazon Trading

Analysis and Strategy

Being a publicly traded company on the NASDAQ index, Amazon’s financials are announced on a quarterly basis and traders monitor these reports to inform their strategy and decide on their next trade. If the revenue records meet or exceed the projected estimates set by the analysts, then traders will be poised to buy the stock in anticipation of a significant upsurge.

On the other hand, if the financials are lagging compared to market expectations and previous performance, we can expect the price of the stock succumb and decline. In this case, traders have the opportunity to sell the stock and profit from the price shift.

While monitoring the economic releases and records of the company is not a big deal, it’s not always the whole story. If you want to be confident in your trades and optimize your strategy for better results, you need to look at the bigger picture as well. The stock market is vulnerable to several external factors including the current geopolitical climate, overall industry performance and investors’ sentiment. This is the fundamental approach to stock trading.

While it’s not critical to follow all the international news and events, keeping up with an economic calendar that lists all the important announcements will definitely make you a better trader.

Another viable approach a trader can employ is the technical methodology of trading stocks which focuses on the chart and the historical performance of the price itself. Technical traders utilize various indicators available in the trading platform that help them identify key support and resistance levels, breakouts and trend formations.

At the same time, however, traders need to look at how they can protect their investment and manage their risk. Trading stocks may not be the most volatile financial asset but there is always a possibility of an unexpected market downturn or event that causes enough turmoil to move the prices against your position. Fortunately, the platform provides the tools to control your exposure to risk as well as automated features that close any losing trades before too much harm is done.

 

Wrapping up

Taking everything into account, Amazon’s stock is poised for long-term growth and Amazon has both the scale and the financials to sustain consistent performance for the next decade. While Amazon stocks offer attractive opportunities to traders in South Africa and across the world, it’s highly important to monitor the overall market environment as well as the competition before making a trading decision.

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Trading Foreign Exchange (Forex) and Contracts for Differences (CFD’s) is highly speculative, carries a high level of risk and may not be suitable for all investors. You may sustain a loss of some or all of your invested capital, therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin.

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