You can start doing stock trading in India provided you understand the mechanisms and trade psychology involved. Stock trading is heavily dependent on price movements.
Getting hold of price movements in a disciplined fashion is vital to money-making in stock trading. You have to teach yourself how to be immune to greed. Greed is good, only if it is synonymous with ambition and not something irrational. You can conjoin ambition with a rational trading plan to start stock trading India.
Your lessons have to be so deeply ingrained in you that you ought to be able to act on the tenets within minutes – if not seconds. Price movements frequently allow only that much window for you to grab the winning moment.
The Trading Account to Start Stock Trading India
Trading and demat accounts aid your access to the stock market for stock trading and investing.
To start stock trading India you need a trading account and a linked bank account. However, brokers will offer you the option of a Demat Account, enabling your long-term investment in the stock market.
If you lack a Demat and trading account, you can open a trading account with best broker.
Start stock trading India – relevant trading segments
In India, you may do trading in Equity, Equity F&O or Equity Derivatives, Commodity F & O, and Currency F & O.
Equity trading in India
Equity trading in India is concerned with the buying and selling of stocks without the aim of holding shares in excess of one trading day. You have to square off the trade prior to the day’s trading session close, or 3:30 pm.
Typically, your broker will advise you to square off all your open intraday trades by 3:20 pm to sidestep the possibility of any trade getting left out.
You may trade on shares of known BSE & NSE-listed companies.
You ought to pick stocks that are highly liquid, implying there are nonstop trades taking place for that specific share. There will always be a buyer and seller available for trading when you start stock trading India.
You cannot start stock trading India on exchange-banned stocks. These are the T group shares that are known for showing abrupt price movements.
Equity derivatives trading in India
Equity derivatives are available for you to start stock trading India. These are made up of futures and options (F&O) on underlying stocks.
F&O instruments are available on highly liquid stocks. The stock exchange chooses the from amongst the best 500 stocks with high traded value and market capitalization.
Currency derivatives trading
To start currency trading in India, you may trade currency derivatives on BSE, NSE, and MSE. The currency market observes a 9-5 trading day.
You may trade in currency F&O, and all trades are cash-settled in INR.
In India, you may trade in just four currency pairs.
- INR/USD;
- INR/GBP;
- INR/EUR;
- INR/JPY.
Other currency pairs are not permitted for trading on stock exchanges.
Commodity trading in India
You may do commodity trading in F&O on commodity products such as energy products, metals, and agro-based commodities.
Commodity F&O may be traded on exchanges like NCDEX, ICEX, MCX, NMCE, and ACE. Out of these, MCX is the largest platform.
Know your trading platform & start stock trading India
You will get your used ID and password at the shortest notice. This follows the demat and trading account opening process. Subsequently, you will need to visit the trading website of your stockbroker.
Enter the ID and password to examine the trading screen. For starters, the screen will be blank, not showing any shares. A handful of them may have live Sensex and Nifty prices.
Money transfer Funds and options
You may not trade unless you have money in your trading account. This happens despite the fact that your broker has linked your savings bank account. You will have to transfer money from your bank account to your trading account.
Sensex and Nifty tickers
BSE and NSE tickers may aid you in gauging the broad market movements, even as you trade individual stocks and other indexes.
The ticker prices show the general market sentiment, being a good indicator to gauge market direction. This is vital, given that with falling markets, most stock prices also plummet.
Creating a watchlist to start stock trading India
Watchlist offers you a swift glance at your preferred stock prices all in one place. You may add all the shares to the watchlist that you plan on tracking.
Order Book to Start Stock Trading India
The order book will have details of all the orders you have placed during trading hours. The book will also show you the orders’ status, if they have been executed or otherwise.
Position book
The position book shows all your outstanding trade positions. You can also take note of the mark to market (MTM) open trades position.
MTM is the unrealized profit or loss status of your trade regarding the ongoing stock market price.
Holdings book
The holdings book will show you just the delivery shares that you have bought for the long term.
Stock trading Virtual practice
Prior to starting stock trading India, you may find it very useful to work on following websites for trading practice:
- Moneybhai;
- Dalal Street;
- ChartMantra.
There are many reasons you really ought to start stock trading India :
- Higher margins upto 60 times available to traders rather than to investors;
- High return potential on a lesser capital and shortest holding period;
- Lower brokerage fees in comparison to delivery trades;
- Short to medium horizon for strategies to pay off.
Conclusion
You can always trade by placing a stop-loss trigger to cut back the potential loss. You ought not to invest in excess of 10% or smaller sums for each trade to delimit total capital loss.
Trade just in two or three liquid stocks of the company you are familiar with. Seek out market trends and follow the same while starting stock trading India. It is good to have a clear strategy right from the beginning. Don’t feel emotional.
