Hisham Mansour, co-founder and managing director of CFI Financial Group, talks young traders, beginner steps, attractive commodities and the pandemic
What is the new demographic of trading?
One of the most interesting aspects of the financial markets in recent years has been the shift in the demographics of traders and investors. Years ago, baby boomers and Generation X (i.e. people born in the 60s and 70s) were the ones behind the big money, who held shares in some of the biggest and longest-running corporations in the world. As the 2000s rolled in, millennials took control amid a technological revolution that saw a transition from offline, open outcry trading to online, low latency and largely automated trading.
Today, the demographics of traders has morphed further towards younger millennials and even early Generation Z, who discovered the potential and ease in trading through mobile applications and investing in newly introduced products such as cryptocurrencies. The current environment caters well to occasionally less attentive and on-the-go individuals who are buying or selling what they are familiar with, just as much as they are investing in growth or value – an approach that has stood the test of time.
What are some of the factors that are bringing younger traders on board?
There’s no denying that trading is becoming more and more mainstream. This triggered new waves of younger traders, amplified by advancements in technology, which made access to the global financial markets faster, easier and more intuitive than ever. Aside from simplified and enhanced gateways to the markets, the younger generation – amid highly competitive employment ladders – began looking for new ways to generate extra income. While there are a variety of ways to generate side money, online trading garnered heavy interest among this younger demographic as the allure, excitement and dynamism of such products synergised well with that age bracket.
Advancements in technology – including reduced trading costs and ultra-low spreads, the availability of educational and analytical tools such as daily reports and free weekly webinars at the click of a button, and mobile trading on the go – work well with a younger generation looking for new ways to generate extra income. The allure, excitement and dynamism of the financial markets played a role in attracting this generation, who find trading to be less complicated than originally represented across communities, especially with accounts that can be opened with no minimum deposit, enabling ultimate flexibility and risk management. They became more enlightened, in parallel to a continuously expanding industry.
How is CFI adapting to this newfound passion by the younger generations?
We have made it simple across every single stage of the trading journey, from a simplified account opening process to the ability to place trades through a variety of methods including the dominant mobile app with as few steps as possible. Furthermore, CFI’s world-class services mean access to thousands of stocks, currencies, commodities, indices and ETFs across international markets from a single interface and with no minimum deposit, a powerful trading infrastructure boosted by zero commissions, ultra-competitive spreads and fast execution, especially during volatile markets.
Aside from the highly competitive trading conditions, the company offers daily analytical reports, free weekly webinars on a variety of topics and for different experience levels, and a dedicated account manager for each client. Additionally, CFI supports its clients with on-screen instructions for all services, a customer journey filled with a multitude of informative emails and videos on nearly every topic that a trader might need, including how to deposit funds, how to place a trade, how to download the platform and many more. With that being said, the company’s flexibility, adaptability and ever-evolving mentality mean catering to everyone with no exceptions. This is no different for the younger generations, which are playing an increasingly important role in today’s trading environment.
How are the new traders reshaping the wider trading environment?
The younger generations, mainly millennials and Generation Z, delved into the world of trading at the onset of major social breakthroughs, including the rise of social media and heavier attachment to brands that are part of our daily lives. This led to an increased sense of belonging and a shared sentiment, driving the new demographic of traders towards investing in products they are familiar with and, during our era, were mostly in the form of major global stocks, hot commodities and technologically-oriented instruments such as cryptocurrencies. In other words, the more talked about and easy to access, the more likely younger investors would be to lean towards something.
What's next for CFI and what added value will it bring to the younger generations in terms of trading?
As demand across the trading industry continues to rise, CFI’s attention and focus remain unchanged from our customer-centric and highly individualistic approach in making sure our clients navigate the financial markets with ease. At the same time, we continue to focus our efforts on enabling market access to the masses by offering thousands of stocks, forex pairs, commodities, indices and ETFs; an easy account opening process with no minimum deposits; a powerful suite of platforms including mobile trading, daily reports, a wealth of educational content and free weekly webinars; and a dedicated account manager who will assist you throughout your entire journey.
This customer-focused approach, coupled with our pursuit of offering the best and in line with our vision of becoming the go-to brand for all things trading and investing, helped position CFI as a leading global trading provider, catering to clients in more than 100 countries across five continents. The combination also meant rapid but stable and sustainable growth of the CFI Financial Group’s entire operations, with plans to expand into new territories, acquire additional licenses and, ultimately, build a global network focused on trading excellence.
What sectors have been particularly attractive to your users in 2021?
There has been no shortage of volatility over the past two years, given the coronavirus pandemic and other global events that kept markets on edge. With that being said, volatility is a market characteristic that tends to attract most traders who are looking to make larger and faster gains. Such elevated velocity across the financial markets was most notable in stocks, indices such as the Dow Jones, Nasdaq and S&P500, commodities such as gold, oil and silver and cryptocurrencies. Those markets provided plenty of daily opportunities that proved attractive for both short-term traders seeking quick trades and long-term traders looking to potentially shorten the duration towards their goals.
How has the pandemic impacted the overall trading environment?
One of the main changes that affected the world during the pandemic was the shift to working from home. Although our entire lives were spent mostly at home during 2020, work took over and was used by some to kill time away from the constant confinement. At the same time, the presence at home of different generations meant new interests that were focused on generating money, whether as an extra side income for those who had the time, or a completely new stream of revenue for those who lost their jobs within sectors that were more sensitive to the global shutdown. With technology facilitating everything from opening an account to learning all about financial markets, traders were given all the necessary tools to start trading, including the resources needed to learn all about the markets, such as technical analysis and chart patterns.
What advice do you have to offer new traders anxious to dip their toe in the trading pool?
The market may seem exciting to traders, especially new ones who have yet to start and are still trading on a demo account. The prospect of making money and experiencing the ups and downs of any market especially that traders can participate in rising as well as falling prices may seem thrilling and tempting yet reality can be very different. Greed, fear and other emotions may come into play, luring even the most professional traders towards unnecessary risks and losses.
Our advice for new traders is to start learning about the financial markets through the variety of educational material that CFI offers, including free weekly webinars, short videos, technical analysis content and articles on a range of topics for beginner and advanced traders. At the same time, traders should be applying what they have learned on a demo account, allowing them to experience a real trading environment without the added risk of using real money.
Once traders are comfortable with trading on a demo account, they can begin trading with the amount they desire given the no minimum deposit flexibility available when opening a CFI account. Nonetheless, it is advisable for traders to begin with a smaller amount regardless of their financial well-being. It is also advisable that they start with amounts they can afford to lose completely in a worst-case scenario without it affecting their financials. This is important as apart from the usual risks, more money could create psychological pressure and affect the overall trading plan as well as expose them to risks they are unable to afford in case they face losses. As they become more experienced, traders can increase their investment while keeping in mind the different risks associated with trading, having already fully experienced them with smaller amounts.
When money is involved, our emotions are triggered and active. This is no different for trading when our goal is to use our money to generate returns. The best approach traders can have when looking to become consistent and profitable in trading is to stick to a plan. A plan means having an option for every market scenario while also following strict guidelines on when to enter and exit trades as well as when to avoid the markets altogether.
Common emotions that come into play include greed, fear and overconfidence. After a few profitable trades, even the most skilled traders will experience overconfidence and greed, which could drive them to trade any opportunity they find, even the mediocre setups. A trading plan ensures traders stay away from excessive trading and know how to deal with such scenarios while grounding their expectations and remaining humble in the face of the market, knowing that a sudden and unexpected event couldn’t be saved by even the most concrete trading plans.
Finally, sticking to a trading plan, keeping track of your trading activities, and maintaining proper risk parameters are key factors in helping traders find success in the financial markets.