In order to begin trading, you will require demat and trading account, both available with leading stockbrokers as Angel Broking. A demat account will act as the common repository that allows you to store the shares you have purchased, whereas a trading account will facilitate the actual buying and selling activities.
Here are the basic steps to start trading successfully in the Indian share market:
As an Indian investor, the two share markets that you can trade in are:
The two depositories with which all depository participants are registered are:
Trading is one of the methods of how to invest money in the share market. It can be defined as an active form of buying and selling of securities with an intention to make profit.
In intraday trading or day trading, you must square off all positions before the market closes. For intraday trading, you may avail the use of margins, which is the funding provided by the broker to increase your exposure in the stock market. It allows you to purchase/sell an additional number of stocks, which would otherwise require you to invest a greater amount of funds.
Delivery trading involves buying the stocks and holding them for more than one day, thus taking their delivery. It does not involve the use of margins, and hence you must possess the funds for your share market investments. It is a more secure method of investing in the Indian share market.
How much financial risk you can tolerate should determine how much you should invest. Your investments should not endanger your savings. It is also important to diversify your portfolio and utilise features such as stop loss to minimise losses.
Using both types of analysis will allow you to make sound decisions.
Before entering into a contract with a broker, ensure that it is registered with SEBI and that its credentials support its claims. Make sure that you receive a ‘Statement of Accounts’ for funds and securities settled every quarter, and documented proofs of all deposits that you make.