Earlier, brokerages used to manage stock trading on behalf of investors. They would check the prices of stocks, confirm the contract, and finally approve the trade. Online trading is buying and selling financial instruments using an application or a website. Online trading saves you time and effort and enables you to conduct your trading activities while on the go.
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Here are four steps to follow, in chronological order, to successfully start stock trading in 2023:
Research and find a stockbroker
Choosing a stockbroker is necessary since they can help you open online stock trading and Demat accounts. You can electronically keep the shares in your Demat account and make transactions to buy and sell shares while stock trading.Although, remember to ask about opening and managing trading and Demat account fees when choosing a stockbroker. It varies depending on the broker and how long the trader is paying.
It would help if you also inquired about the broker’s responsibilities to determine whether you are paying the appropriate brokerage fees.
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Open a Demat Account
To trade online market trading, you must first open a Demat and trading account after selecting a broker. A Demat account is a depository system that enables you to store, monitor, and manage your shares and other investments electronically. An online trading account, on the other hand, facilitates online share and security trading. To open an online Demat account and complete the know your customer (KYC) process, you would need the following documents:
- Pan Card
- Proof of Identity
- Proof of Address
- Proof of Bank Account
- Proof of Income
- 2 photograph copies
Once your KYC is finished, you will receive an email and SMS containing your Demat account number information.
Add funds to your account
You can access your Demat and trading accounts once you get your login credentials. The next step is to add money to your trading and Demat accounts. When you opened the account, your stockbroker linked your bank account to Demat. The funds are transferred from this bank account. You can always link other bank accounts to your online trading account to make things easier.
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Research the stocks
You should comprehensively research. It involves reviewing information such as earnings reports, financial filings, SEBI reports, and independent research reports from qualified analysts. Pick one or several stocks to start and invest a certain sum of money that you are willing to lose. You can reinvest profits in the stock or other businesses if you are confident in your strategy and have researched well.
Nowadays, beginners may easily trade shares thanks to technological advancements. However, since it includes money, you must understand all the dangers and benefits before investing.
Source: Cosmo Politian