How to start trading | Trading | Types of Trading in India | Components of trading | Stock Brokers | Market Timing | Intraday Trading | Swing Trading | Long term investing | Investerguider.com
How to start trading in India
INTRODUCTION
First, we have to know
What is trading ..?
Trading is buying and selling of shares, commodities or currency for earning the profit in the market is known as trading.
You have to buy low and sell high. The remaining money is your profit.
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| How to start trading | Trading | Types of Trading in India | Components of trading | Stock Brokers | Market Timing | Intraday Trading | Swing Trading | Long term investing | Investerguider.com |
Main Components of Trading
Commodity - Gold, Silver, Crude Oil
Currency (Forex) - USD/INR, EUR/USD (These are some pairs of Currency)
Crypto (Bitcoin, etc)
*Derivatives (Features & Options) - In this we buy & sell future and options of any stocks or any index. This is the most risky trading. We will learn this in detail in another article. Please refer that.
How to start trading in India..?
To start trading in India, you must have 18+ and some most important documents are required for smooth process.
First, you must have a PAN Card
To start the trading journey, you must have a PAN Card
Second, you must have a Bank Account
To start trading, you must have a savings bank account for transferring the money.
Open the Demate Account or Trading Account
- Demat Account - For storing the shares electronically.
-Trading Account - For placing the order to buy/sell in the market.
These accounts are generally provided by the stockbroker.
Some examples of stock brokers
Groww
Zerodha
Upstox
Angel one
*Now transfer the funds
When your demat account is open, transfer the funds to start the process of buying and selling stock or other instruments.
The timings of the market in India
In the Indian stock market (NSE/BSE), they run from Monday to Friday.
- 9:15 AM to 3:30 PM Normal Trading
- 9:00 AM to 9:15 AM pre-open session
Types of Trading in India
1. Intraday Trading
. Same-day buy-and-sell
In intraday trading, you can earn fast, but it's very risky, and I suggest it not for beginners. You should never try this before trying positional trading or swing trading for 3-6 months. Directly trying Intra day trading, may wipe out all your capitals.
2. Swing Trading
2-10 days or more you can hold the shares. This is the best for Students, Working person, or anyone. It gives you flexibility of time. It also contains low risk as most of the trades are WIT (WEEKLY INCOME TRADE) , MIT(MONTHLY INCOME TRADE).
3. Positional Trading
- When you were going to hold your share for weeks or months.
- Fundamental Analysis is very important in positional trading.
*Results of the Company, growth of the company, and the potential of the company.
4. Long term investing
-In long-term investing, investors usually hold the stocks 3-5 years or more.
- Long-term investing is for creating wealth.
This is for those who does not have time to give in the market. Holding any good stocks for long tems , have the high chances of having profit on the capitals.
What is going to help to get success in trading.
These two things are very important part of trading : knowledge & Discipline
Basics to advance knowledge about
Nifty 50
Sensex
Bank Nifty
These are the indices of the Indian Stock Market. We will cover information about these index in a separate article. Please refer that to understand them in detail.
Topics you should must cover to understand Trading
- Learn about the Candlestick charts
- Different Candles
- Support
- Resistance
- Volume
- Demand & Supply
- Risk Management
- Must have knowledge about Economic News that affects the market
- Learn Technical Analysis
- Learn about basic Indicators
- Moving average
- RSI (Relative Strength Index )
- MACD
- Bollinger Bands
- - Learn Fundamental Analysis
If you want to do long-term trading or positional trading then see the financials of the company.
- Must know about which broker you were going to use and know about their charges.
Discipline in Trading
Most important skill to become a successful trader is a disciplined mind. Weightage of discipline is 70-80% in a trading journey. Discipline does not built in one day. You have to do multiple practice. Once you are disciplined in trading, then you are ready to go.
You have to make a trading journal for better discipline.
You should never break rule of your risk management.
Must know about charges that you have to pay during trading.
1. Brokerage fees
2. STT (Security Transaction Tax)
3. Exchange transaction charges (NSE/BSE Charges.)
4. GST
5. SEBI charges
Different Terms in Stock Market
Whenever you start to learn stock market, you may get to know lots of new terms. You may feel difficult in Understanding all the terms. But after some time, you will feel familiar with all of them and that will become easy for you. Entry, exit & stop loss level
Terms like -
- Trends,
- Bid, Ask
- Spread, Volume and Liquidity
- Leverage,
- Upper Circuit, Lower Circuit.
- Reward to risk ratio , Etc.
We will cover all the terms in detail in seperate article. You can refer that in this website.
Thank you so much for giving your valuable time to read this article. I hope you enjoyed reading this article. If you have any doubt or queries you can comment here or contact us directly. We will love to hear from your side and help you.