How To Start Online Trading In India? A beginners guide to Share Market.
Now a day, buying a stock is as simple as recharging your mobile or transferring money. All you need is computer with internet connection, a bank account and some money in that account, obviously.
If you have seen movie Guru (in which Abhishek Bachchan was in leading role based on life of Dhirubhai Ambani), the scenario of stock market might scare you. But it was something like 50–60 years back. Now, no physical appearance, no much paper works are required. You can buy a stock sitting in your room in front of your laptop and that too within 2 minutes. How? That’s what I am going to teach you now. How to buy a stock in stock market? Just be with me for the next 5–10 minutes.
Buying shares online is the easy task, but I believe first you need to find that right stock that you should buy. There are few basic work which you should go through to find the best stock for you-
Also Read: What is the Minimum Money I need to Start Stock Trading in India
Read and Research:
There are tons of websites on the internet where you can get tutorials for stock market basics and about how to buy a stock in Stock Market? For beginners, I will recommend to follow websites of Money control, Economic times and Investopedia — , Trade Brains.
There are few books which are must read for the beginners in stock market. They are:
- The Intelligent Investor
- One Up on the wall street
- Beating the street
- Common Stocks and uncommon profits
In addition, please check out this link to know about other must read books for stock investors: 10 Must Read books for Stock Market Investors
You can read further about Indian stock market from the following useful links:
- Investment Basics,
- Sensex, Nifty & Index,
- How to create your Stock Portfolio?,
- Learn how to follow Stock Market and trends- Trade Brains,
- Six Different Types of Stock in Indian Market according to Peter Lynch
Now after learning the basics, the main tasks begins. You need to learn how to follow the stock market, their trends, their fluctuations etc.
Get good financial knowledge:
A good financial knowledge is the key for the success in the stock market. You need to understand the fundamentals before entering the stock world. The basics of Earnings per share(EPS), P/E Ratio, Book Value, P/BV, Dividend, Return on Equity(ROE), Return on capital employed(ROCE), debt/equity ratio etx should be known to you before you analyze a stock. You can read further about from these links: Investment Basics, Six Different Types of Stock in Indian Market according to Peter Lynch
Make your dummy portfolio:
A portfolio is nothing but your collection of stocks from different or same sectors. A portfolio shows how many shares you are owning from which sector. Generally, a good portfolio maximizes the profit and minimizes the rist. You can learn how to create your portfolio from this link: How to create your Stock Portfolio?
Note: You can also use Trade Brains Portal to create your dummy portfolio!
Follow the stock you’re interest in for few days:
The last step before buying a stock from stock market is to learn how to follow stocks in the stock market. You should know how to track stocks so that you can buy/sell them at the best time. I advice the beginners to at least follow the stocks for 1 month before buying them. You can learn how to follow a stock from this link: Learn how to follow Stock Market and trends- Trade Brains.
Now that you know all the basics for the stock market, you can move further for How to buy a stock in Stock Market?
How to buy a stock in Stock Market?
The basics requirements for buying a stock in stock market are:
- Stock broker: Generally, people can’t go to a stock exchange and buy/sell stocks. Only members of the stock exchange can buy and sell and they are called the brokers. Every broker should be registered on the Securities and exchange board of India(SEBI). There are a number of brokers/ sub-brokers which you can choose for trading. Some famous online brokers are Sharekhan, Kotak Securities, ICICI Direct, 5paise and Zerodha.
- Saving Account: Obviously you need a saving account for trading in the stock market.
- Demat & Trading Account: It’s very simple to open a demat account. Now a day, the banks even offer you to open 3-in-1 account, i.e. all three Saving+ Demat+ Trading account, by filling few forms just once.
Note: If you open a 3-in-1 account you won’t need to find a stock broker as trading and demat account is already included in it. However, the brokerage charges for the traditional brokers offering 3-in-1 in a lot higher compared to newer discount brokers like Zerodha.
Also read: How to Open a Demat and Trading Account at Zerodha?
- Laptop and Internet connection: Obviously, the soul of modern era which is a must for all the online facilities.
NOTE:
The documents required to open a 3-in-1 account are PAN card, Aadhar Card (for address proof) and an ID proof (generally Aadhar/Pan card can also be used as ID card). Once you opened your demat account, you will receive your username and password, and then you can start trading using your account.
I hope this post is useful for the readers. Further, if you want to read the complete post, you can find it here:
- How to buy a stock in Stock Market? Step-by-step Explanation.
- How to trade in ICICI Direct? Buy/Sell Stocks — Trade Brains
- How to Open Demat Account at Angel Broking?
- 8 Best Discount Brokers in India — Stock brokers List 2021
- Zerodha Review –Discount Broker in India | Brokerage, Trading Platform & More
- Fingrad — Best Share Market Online Courses & Webinars
- Stock Market Courses for Beginners to Advanced
- Options Trading Course for Beginners from Scratch
- Free Android app ‘Brokerage Calculator’ to find the total brokerage and actual profits/loss while trading in stocks ‘on your phone’.
