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How do I trade on the stock market?

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How do I trade on the stock market?

Trading in the stock market is a wonderful way of making money but in order to benefit from such a trading one needs to know how to handle everything properly. As far as the trading in the Indian stock market is concerned there are two prominent stock exchanges of it the Bombay Stock Exchange and the National Stock Exchange. Trading in these stock exchanges would be enabled through open electronic limit order book system. With this system, the orders can be easily matched and available to trade.

For trading in the stock market you have to follow these steps

1. Keep your identity proofs ready

The first basic thing for starting trading in the Indian stock market is that you should have valid ID proofs like Adhaar Card and Pan Card. These will be needed to certify your authentication

2. Contact a broker

One needs to get in touch with a broker that is registered with SEBI i.e. the Securities and Exchange Board of India. Such broker can be an individual, company, online agency etc. Nowadays there are many intermediaries who are licensed brokers to deal in the stock market and one can choose a reliable source amongst them. It is suggested that one should choose a discount broker as the fees involved will be very minimal.

3. Get your demat and trading account

Without a Demat account you can’t trade in stocks. It is through the demat account you will be holding the stocks in your name. In demat account the stocks are in electronic form or demat state, thus you won’t be holding any stocks in the physical form. All the buying and selling process of stocks is handled through trading account. If you want to do trading in commodity then a commodity account needs to be opened as well. The fee for opening such account is very minimal and each and every facility is accessible online.

4. Choose a depository participant

There are two depository participants in India and they are National Securities Depository Limited and Central Depository Services Limited. Once you will choose a broker he will take care of all these aspects and will register the details with the depository.

5. For big investments UIN will be needed

UIN stands for Unique Identification Number and in case of trading of more than 1 lakh rupees at a single time this will be needed. If your daily limit is less than this then there is no need for it.

6. Start the trading

To finally begin with the trading process you just have to inform your broker that what stock you want to buy and sell and at which price. Everything will be handled electronically and real time settlement will be ensured.

By following these steps you can trade in the stock market and there are some things that you need to keep in mind like don’t follow each and every investor blindly because your financial priorities may not be the same as others. First of all do research about it and never invest in a hurry without understanding the basic aspects of a particular investment. It’s important to keep your expectations real and then slowly you can diversify your stock and reap great profits.