Your start up guide to online trading
Earlier only restricted to the Wall Street, today stock market trading has become a commonplace practise. Ease of access and affordable online brokerage sites have made stock market trading possible for everybody. Online trading platforms have made a trader’s life so much simpler, where they can buy and sell at their fingertips in a fraction of seconds.
If you want to know how to do online trading as a beginner, here are a few tips to get you started:
1. Open a Trading Account
In order to trade online, you need to have a trading account, also known as a Demat Account with an online brooking firm. Make sure the broker you choose is a legitimate one and is registered with SEBI and a member of all the stock markets.
2. Stock market basics
One basic functionality of the stock market is that it works on a demand and supply basis. If you invest in a particular stock, its demand will increase with more and more people investing in the same stock. Once the demand increases, the investors will then compete to buy that particular stock by partaking in a bidding.
3. Online Simulators
If you want to practise online trading, online simulators provide a good platform to practice trading. Since it is a simulator, any loss that you make will not affect you and you can continue to sharpen your skills.
4. Estimate your investing capacity
Before you start trading online, it is better if you jot down a plan for your investments. This will help you strategically organise your investments. It is also vital that you figure out exactly how much you are willing to invest. This way you can keep track and not lose control over your funds.
5. Researching and choosing a stock
In the stock market, there are two ways in which you can research your stocks. One is using fundamental analysis tools and the other is technical analysis. Fundamental analysis entails looking into financial reports of the business in question, public news and reports, income statements etc. Technical Analysts believe that price fluctuations are the single most reliable source to show the competence or performance of your stock.You can use either of these methods to research your stock and choose one.
6. Trial and testing
As a beginner in the stock market, the best way is to observe. The stock market is all about risky strategies. Instead of making any uncertain strategies first hand, observe the trends of the market and then decide on which strategy is best suited for your trading profile. Using tried and tested methods in your initial investments will give you a more profitable pay off as compared to indulging in risky situations.
Constant knowledge attainment will never hurt any investor. The more experience and information you acquire, the more your skills will develop. Make sure that you don’t get carried away by the market and be cautious with your funds.