Investor Guide

A practical guide for investors starting out, or anyone wanting to put more order into how they decide. It covers what to know before your first trade, how to read the cost of trading, and how to follow your portfolio afterwards.

How trading works — six steps

This is the cycle a disciplined trader follows, from setting the goal to reviewing the results. Each step is covered in detail in the sections below.

• Define your investment goalStart by defining your goal: are you after short-term income or a long-term investment? Then set the return you are targeting and the maximum loss you will accept. Financial institutions fix both numbers before entering any trade.
• Analyse the marketStudy the market using technical analysis (charts) and fundamental analysis (news and economics). Investment banks rely on specialist research teams to make considered decisions.
• Write a trading planDecide before you enter: your entry point, your stop loss, your profit target, and your position size as a share of your capital. A plan written in advance is what prevents an impulsive decision when the price moves.
• Manage your capitalCapital management is among the most important factors in trading — arguably more important than choosing the trades themselves. It means spreading risk and never committing a large share of your capital to a single position.
• Execute preciselyExecute to the plan, without hesitation or haste. Many traders lose to hesitation, fear or greed rather than to weak analysis.
• Review and improveAfter executing comes review, no less important than the rest: go back over your results, analyse your mistakes and refine your plan.

1. Before you start

• Define your goal and horizon. Long-term investing in listed shares is a different activity from short-term currency trading — in instruments, risk and the time it demands.
• Decide what you can afford to lose. Do not invest money committed to near-term obligations or essential expenses.
• Understand the link between return and risk. Every higher expected return carries a higher chance of loss; no instrument combines high return with no risk.

2. Which account suits you?

Full details for each account are on the account pages, and the rates on the Fees and commissions page.

3. Opening an account

You will need your personal ID, proof of residence and proof of employment, with the signed account opening form. You can complete this at our head office in Ramallah, our Nablus branch, or through the Palestine Investment Bank branch network ↗. Choose the account type for the market you intend to trade.

4. Understand the cost before the trade

• Commission: a percentage of trade value, with a minimum in some markets.
• The minimum: on small trades the minimum commission weighs more heavily than the percentage itself.
• Break-even: the price at which a sale covers your purchase cost and both commissions. The trading calculator works it out before you execute.

Order types you will use

• Market order: executes immediately at the best available price — you get speed of execution, not a guaranteed price.
• Limit order: you set the price at which you are willing to buy or sell; it executes only if the market reaches it.
• Stop loss: closes the position automatically at a price you set in advance, to cap the loss.
• Take profit: closes the position once your profit target is reached.

On the forex platform there is also a minimum order distance between the current price and a pending order or stop loss; it is published per symbol on the Instruments page.

A worked example: the cost of a Palestine Exchange trade

Buying 1,000 shares at 10.00:

• Trade value: 10,000
• Commission at 0.72%: 72.00 (Capital Market Authority 5.00 · Palestine Exchange 20.00 · securities company 47.00)
• VAT at 16% on the commission: 11.52 — bringing the total cost of the purchase to 83.52
• Breakeven if you later sell: 10.1684 — the share needs to rise about 1.68% to cover both commissions and the VAT on them.

Try your own numbers in the trading calculator or in the calculator on the fees page. The figures above include VAT on the commission.

Risk management and position size

• Decide the loss you accept before you enter, then derive the position size from it — not the other way round.
• Never let one position decide the portfolio: cap the share of capital any single position may take.
• Leverage magnifies losses as much as gains. The leverage tiering policy is published on the Instruments page.
• Mind the overnight cost: positions held to the next day incur swap charges.

5. Build a portfolio; don't bet on one holding

• Spread across more than one company and more than one sector.
• Set each position's share of the portfolio in advance and stick to it.
• Review periodically, not daily — frequent adjustment raises cost and weakens discipline.

Quick glossary

A fuller list is on the glossary page.

6. Follow the market, and know your sources

Rely on official sources: company disclosures and financial statements published through the Palestine Exchange, and our own periodic reports. Avoid deciding on rumours or unverified messaging groups.

Official sources worth following

• Palestine Exchange ↗ — listed company disclosures, financials and closing prices.
• Palestine Capital Market Authority ↗ — legislation, instructions and the register of licensed firms.
• Economic calendar and market holidays — what may move the market, and when it closes.

Common mistakes worth avoiding

• Committing a large sum to a first trade before understanding how the market works.
• Doubling down on a losing position hoping to recover.
• Using high leverage without enough experience.
• Neglecting a stop loss on short-term positions.

This guide is for general information only and is not investment advice. Trading carries risk that may lead to the total or partial loss of your capital.

Note: This guide is general information, not investment advice or a recommendation. Trading carries risk that may lead to the partial or total loss of capital and is not suitable for every investor — please read the risk statement.

You may also need

• Markets
• Trading platforms
• Fees & commissions
• Trading Calculator
• Forex calculator — margin & leverage