Online Trading for Beginners

What is online trading?

Online trading is a convenient way to buy and sell financial instruments online. These transactions can be facilitated through online brokers who offer a wide range of financial instruments such as equities, commodities, bonds, exchange-traded funds, futures, etc.

Check : Online Trading: All You Need To Know About

What are the advantages of online trading?

Convenience to trade from anywhere at any time: If you have access to a smartphone and internet connection you can trade/invest from anywhere at any time (during the market hours) from your mobile trading app.

Track your investments on a real-time basis and assist in making investment decisions: You can track your investments and trades on a single platform. Most platforms also offer a plethora of data points from which you can conduct your own research and trade in stocks and other financial instruments. This can help you make smart investment and trading decisions. You can see real-time gains or losses whenever you log in from your phone or computer.

No need to contact your broker before placing a trade: You don't even need to speak to your broker before making any transactions. To make informed investment and trading decisions, you must learn online trading and get an understanding of data points, patterns, trends, and price movements.

How can you start online trading for beginners?

1) Select a broker: The first step in online trading for beginners is to determine whether or not a broker is legitimate is to see if it is a SEBI registered broker. Every broker is required to display their SEBI registered ID on their official websites. Once you have established the legitimacy of the broker you need to choose from the two types of online brokers:

1) Discount Broker or

2) Full-service Brokers.

While a discount broker will provide you with all of the necessary trading tools for a low fee, a full-service brokerage firm will provide you with investment advice for a higher fee. Thus depending on your requirements, you will be able to decide whether you want to go with a discount broker or a full-service broker. To be honest, there are multiple resources available on the internet through which you can learn online trading and about the stock markets to become a D-I-Y trader. A discount brokerage is a way to go for you if you have the knowledge to trade on your own. If you want to invest but don't have the time or understanding of the markets, a full-service brokerage account may be a better option.

2) Open Demat Account and Trading Account: To start online trading for beginners the next step and very important step to get started is to open demat account and trading account. A demat account is like a bank account where it holds your stocks, MF, etc in dematerialised form just the way the bank holds your cash. Whereas, a trading account is an interface from which you can carry out the actual transactions. These days opening a demat account and trading account has become extremely seamless, fast, and paperless. Once you furnish some basic documents you can start trading same day itself.

3) Start Trading: Before you start investing or trading, it's a good idea to learn online trading, acquire some knowledge of the stock markets, and practice virtual trading. Start trading through your trading account once you've gotten the hang of it. Use a variety of tools and equipment available with your broker's platform to make D-I-Y (do-it-yourself) investing and trading a breeze.

In conclusion, to get started in the stock market you will need to select an online broker, open a demat and trading account and start trading. Ensure that you make utmost use of tools and equipment on your brokerages the platform and learning material available on the web.