SHARE TRADING: GET YOUR BASICS RIGHT

In this 21st era, trading on the share market has become very simple with just a touch one can buy shares worth lakhs. Investors can buy & sell shares anytime and anywhere. The process of share buying has become completely hassle free and easy. All one needs is the internet with good speed.


Fortunately, the tiring process of buying stocks in paper format has ended and now with the technological evolution the whole process of share trading can be done online by just opening a Demat account and downloading an app of the broker through which one is going to buy the share.


Stock trading can give exponential returns if done in the right way. Investing in the stock market is like riding in a roller coaster which involves riding the various ups and downs of the market. Since the introduction of online trading in India, investing has become convenient. Stock market trading is a great path for creation of long-term wealth. Although, it might take awhile for you to understand the nitty gritty of stock market.




So to all the people who are just a beginner in stock market few question which may arise in mind will be:

  • What is online trading and how to do it?

  • Is trading online risky? How to open an account for trading online

  • How do I invest in the stock market when I know nothing about it?

What is online trading?

Trading online is a process of buying and selling products on the web. This trading is like any other trading, except, the process takes place virtually. Online trading may include trading of stocks, futures, bonds and other financial securities. Online trading can be done through a brokerage firms.


How to do online trading?

To start trading in the share market or stock market in India, you need a Demat and trading account. Demat and trading accounts in India are provided by the two depositories, NSDL and CDSL, through brokerage firms, also known as stock brokers or share brokers.


The trading account is where you will place bids for buy or sell orders and Demat account is for holding your shares in dematerialized form. The trading of shares in Indian stock market takes place on two stock exchanges - the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

How do I invest in the stock market when I know nothing?

The definition of “day trading” is the buying and selling of a security in a single trading day. For example, if you purchase 50 shares of reliance industries in the morning you’ll have sold your position by the end of the trading day, and then start from scratch the following morning.


Day trading is normally done by using trading strategies to capitalise on small price movements in high-liquid stocks or currencies. The purpose of Day Trading 2020 How to Start for Beginners is to give you an overview of day trading basics and what it takes for you to make it as a day trader.


Day trading 101 – get to grips with trading stocks or forex live using a demo account first, they will give you invaluable trading tips. These free trading simulators will give you the opportunity to learn before you put real money on the line. They also offer hands-on training in how to pick stocks. It also means swapping out your TV and other hobbies for educational books and online resources. Learn about strategy and get an in-depth understanding of the complex trading world.


As a trader, you are exposed to a host of news flows. You need to be very discerning. Don’t believe and act on every tip that you receive via SMS or WhatsApp. Avoid buying stocks just because a star investor or trader is buying the stock. Don’t buy the talk of assured returns on stocks. Firstly, assured returns are not possible in the stock markets, and secondly, SEBI does not permit any broker to assure returns to investors.

Process to beat and ace the market:


Four types of trading:

1) Bull market and Bear market.

2) Long positions & short positions.

3) Electronic trading & floor trading.

4) Auction market & dealer market.


Steps to open a share trading account:


1) Find a broker.

2) Compare brokerage rates.

3) Complete KYC.


Step by Step approach to Invest in Share Market in India:


1) Screening and filtering the right stocks using Financials.

2) Select only the companies that you understand.

3) Look for companies with sustainable Moat (competitive advantage).

4) Find Low Debt Levels.

5) Use financial ratios RoE and RoCE to identify the right stocks.

6) Honest, Transparent, and Competent Management.

7) Right Price to Buy the Stock.


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