Trading in Stock Markets remains a highly rewarding business idea if done with proper planning and discipline.It is quite popular among traders as it is a means of making handsome money in the quickest of the times.
The situation becomes confusing when you are totally new to trading and the stock markets but you want to start trading.As a new entrant,most of us don’t know how to get started with trading.
It is also possible that you enquired to any relationship manager at broking house and you were handed few business magazines and newspapers and asked you to keep reading them for 5-6 months.
Of course it is important but it didn’t answer your query.It happened to me also in my earlier days. So i decided to write this tutorial to help you in getting started if you are also new to trading.
1. Trading Account :- For you to get exposure to stock markets and traded stocks,first of all you’ll need a Trading Account.Look for the broking houses in your vicinity which provide services in securities.You can also search internet now a days to make it easy.Compare their account opening fee,annual fee and most importantly brokerage rates.
Get your account opened with the house which suits you best.Although it is human tendency to look for the lowest rates but i would advise you to look for the quality of services offered also.After all,quality has a price.
Now-a-days all the trading accounts offered are online.These are also known as Demat accounts because the stocks held by you in the account are in Dematerialised form and not in physical form as in earlier times.
You can also have offline accounts too if you are not interested in placing orders by yourself.In offline accounts,you instruct someone else to place orders for you.He can be a broker or a relationship manager.When using offline services,you end up paying higher brokerages as it includes fee of your relationship manager too.
It is best if you use online accounts and do the trading by yourself.Brokerages are also significantly lower than offline trading.
2. Computer with Internet Connection :- When using an online trading account,you’ll need a computer or laptop with a decent internet connection for doing the transactions.
Smartphone are also good option although you can not do everything with them.It is advisable that you use an internet connection having decent speed.Slow connection can adversely affect your trading especially when placing market orders.
In your Demat account,you’ll see all the options of buying and selling the stocks as per your trading plan.
3.Charting Software :- Charting software is an important part of your trading business.Most of the brokers provide charting software also when you open account with them.
They can be free or with a very nominal fee and are downloadable from a link in your trading account.With the help of charting software,you will be doing your Technical Analysis by looking the technical charts of the stock in which you want to trade.
Chart analysis helps you to decide your entry and exit price in any particular stock when the market is open.
4.Technical Analysis :- Charting software shall be of no use if you are not familiar with Technical Analysis.It is the technique of forecasting the future price actions of any stock or security on the basis of charts drawn by past price movements of that stock or security.
You should be aware of the basics of the technical analysis at least so as to minimize your risk and maximize your rewards.Finding the support,resistance and trend of the stock movement are important aspects of the technical analysis.Learn to identify the chart patterns to make your trading strategy work in your favour.
These are the basics you need to do before you should start your Trading Business.Any enquiries are welcome and i shall be happy to assist if needed.All the best.