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Getting Started With Trading |Ideas And Planning|

Getting Started With Trading
Adele Parham

In India, recent times have seen a sudden surge in the number of first-time users of demat, meaning that the trading is picking up very well. It is in line with the global trends. Dematerialization or Demat meaning converting of physical shares and securities of an investor to electronic format. This further infers that online trading is gaining popularity because there is an ease of trading from anywhere in the world. Physical presence and Geographic boundaries don’t matter much now. 

Online trading gives a chance to the investor to use a permutation and combination of varied securities and complex trading strategies which would have not been possible otherwise. In online trading these complex strategies can be built in a fraction of time for profit-making. So once it has been decided that a person wants to take a plunge in trading, it is very important to know how to trade online.

How to do online trading?- Steps to follow.

Online trading is done over the Internet with minimal human interaction. This makes the entire process more cost-effective than offline trading. With so many advanced features, online trading in India has gained popularity and is considered safe too. Online trading is very simple and no prior experience is required though there are a few steps to follow, as listed below:

1. Find a stockbroker:

The first and the foremost thing to do once it has been decided that an individual wants to do online trading in India. To do it, he/she should be to find a stockbroker. The selection of a stockbroker is mainly done on the basis of the services offered. These services are brokerage and other fees charged and his/her credibility in the market. It is very important that a stock broker is able to give good service, charge reasonably and maintain a healthy relationship with the investor (his client). 

2. Open demat and trading account:

Next step is to open a demat and trading account. For trading purposes, it is important to have both demat and trading accounts. It is not necessary that both of them are used every time. Opening demat and trading account can be done online by :

  1. Providing personal details like Name, PAN,DOB, address, bank details and email ID.
  2. Upload relevant proof of address, identity and Income.
  3. Self verify the documents for KYC
  4. Sign the agreement with the broker
  5. Submit the application
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After completion of the above steps , a confirmation along with login details and unique ID is given to each account holder.

3. Link bank account to trading account:

The actual buying and selling of shares and securities take place in a trading account, therefore it is important to have the required money in it. Linking the bank account and the trading account allows money in the bank account to be used for trading purposes. It is very similar to “fund the wallet” in the case of online shopping. 

4. Start trading:

One has to monitor stock prices and their movement on the stock exchange to start training. Knowing market basics is an important part of how to trade online.  A trader can keep a track of live prices of a particular stock and make decisions. For trading in India following steps can be followed:

  1. Decide the stock/security to trade
  2. Select buy or sell option
  3. Enter the trade quantity and the amount in relevant currency.
  4. Choose the order type- Market or Limit. Market order gets executed at the next available price when the market opens and for Limit orders a price limit is set by the investor for execution.
  5. Confirm 

Trading is done for the generation of profits, though it may look simple but needs good planning and knowledge of the market. Trading in India is gaining a lot of popularity but it is also important to know how to trade online. 

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