What is share market trading It is a very common doubt among people to understand what exactly is share market trading. If you are a new person wondering how to learn share trading and you want to earn through equity trading then you are in the right place. Various companies get themselves enlisted in the stock market to sell their shares in order to get some funds from the investors. In India, share trading is done on two platforms - NSE (National stock exchange) and BSE (Bombay stock exchange). BSE is located in the financial capital of India which is Mumbai. The trading is executed by various brokers who act as a platform.
Requirements for Share trading To start trading in the stock market there is a need of DEMAT ACCOUNT. One can open a DEMAT account through various brokers such as HDFC Securities, ICICI direct, Zerodha, Angel Brokers, Karvy, Ventura etc. For opening a DEMAT account, there is a need of PAN card and certain fees are charged by the brokers. Different brokers charge different account opening fees. Before opening a DEMAT account through any Stockbroker, one needs to check the brokerage charges as it can affect their earning substantially. Some brokers provide advisory service for the stocks also.
By keeping these factors in mind a good stock broker should be selected for opening the DEMAT account. Once a DEMAT account is opened, one needs to fund it in order to buy and sell shares. Depositing money can be done by using net banking of the bank account which was used while opening the account.
Types of share tradingThere are many types of trading such as -
Despite so many types of trading, Intraday and Cash trading are the most popular among the people who are new to the market. In intraday trading, also known as the day trading, a broker gives a Margin to the investors in order to allow the investors to buy more than the capital spent. In this type of trading, the risk incurred by the investor is more and the capacity to earn money is also more. It is also called high-risk trading. It is advised to invest less money in Day trading for the beginners. A good practice is to spend a small amount usually only 20% of total investing capacity. In intraday trading, the investor has to buy and sell on the same day.
The other most popular kind of trading is cash trading. It is very simple kind of trading in which any margin is not taken from the broker so there is no obligation to sell on the same day. This type of trading is used by big investors who are dealing in the market in a large amount of cash usually in Crores. A proper fundamental analysis is often done before buying and selling the shares.
It is advised for the beginners to start with a small capital and investing in Cash segment. Later on, with the gain in knowledge and experience Intraday, futures and options trading can be started.
Methodology The basic methodology in share trading is buying when the share price is less and selling it when the share cost is high. There are various ways to monitor the share price. The share price can be monitored through DEMAT account and website such as Moneycontrol.com. Stock market operates from Monday to Friday and usually, time is 9:15 AM to 3:15 PM. Share market doesn't operate on the national holidays. The time of the commodities market is different and it closes late in the night. For Trading in the Commodities market, the DEMAT account must be enabled for the broker side. In high-risk trading such as intraday trading, entry and exit time is more important as it decides profits and losses so it needs to be monitored more precisely.
There are various options in Trading Account such as Autobuy and auto sell which allows the user to buy and sell shares without monitoring the market continuously. The user can also put the option of Stoploss in order to minimize the losses. It is advisable to use stop-loss to minimize losses. It is very helpful in times of sudden market fluctuation. By keeping these tips in mind and with regular practice one can ace the art of share trading.