Trading in the stock market used to be challenging and risky even a few decades back. Only a handful of people, who understood the marketing dynamics and were ready to take risks to grow their wealth, would engage in stock market investing. Nowadays, it is simple to invest in online trading. You only need a laptop or desktop, an internet connection, a mobile phone with a valid sim card, and an appetite for risks.
Transactions of financial products online are called online trading. There are various platforms for doing online trading of all the financial instruments such as stocks, commodities, bonds, ETFs, futures, etc.
To start online trading, you must open a Demat Account and a Trading Account with any reliable financial institution. Thereafter, you need to credit the Demat account with funds to allow transactions. A Trading account allows you to buy and sell shares, check prices, and statistics.
Read the article given below to understand the basics of online trading in the share market:
Before investing in the share market, it is essential to have proper financial knowledge of the market. If you are aware of the market scenario and the basics, it becomes easy to analyze any stock and compare its trend with other stocks.
A good broker is an absolute necessity as they help you open your Demat and Trading accounts. A Trading Account enables the buying and selling of shares, while a Demat account helps store the bought shares in electronic form. Always look for the Demat and Trading account opening charges and the annual maintenance charges of the brokerage site. Also, the brokerage fee is a commission-based fee in the form of percentage-based brokerage or a flat fee per trade.
Before buying any stock, it is advisable to follow the market trend for at least a month. Watch carefully, how the market is growing, and how the stock is behaving amid market fluctuations. Being aware of the impact of the market on different stocks would help you save a great deal of money and time.
For opening a Demat account, you need to fill up a form and submit it to your broker. Brokers charge an annual maintenance fee and brokerage fee for opening the accounts.
As soon as you fill in the form, you will get a login ID and password for logging into your Demat account. Thereafter, credit your Demat account with some money as per your requirement from any pre-existing bank account to carry on the transactions.
Once you complete all the formalities, you can start Online trading. My advice to you would be to make sure that you invest in different schemes and do not indulge in only one stock. This helps you prevent future financial crises. Also, be aware of the pitfalls of the market. It would help if you are vigilant in choosing the shares and their current trend.
Here is a list of the documents needed to open a 3-in-1 account:
Besides the numerous benefits the share market offers, investment in the market needs a meticulously-planned approach. Before you start online trading, always understand the market and the basics of investing in share markets. After all, the journey can be long but the destination has to be profitable and comfortable.