How to trade(ट्रडे) using a trading (ट्रेडिंग) account. (ट्रेडिंग केसे करे पूरी जानकारी l

 How to trade using a trading account

A trading account enables financial exchanges to identify trading entities and authenticate transactions. Since all trade on financial exchanges takes place online, it is mandatory for every investor to create a trading account. It is needed to trade in shares and other financial instruments like mutual funds, commodities, derivatives etc. Every investor has to create a trading account to be able to trade in financial instruments.

Key Points:

A trading account is needed to trade in shares and other financial instruments like mutual funds, commodities, derivatives etc.

You need a demat account, along with a trading account, to store investments. A demat account can be opened along with the trading account.

Research brokerage firms until you find the one that offers services you need at a cost that benefits you the most. Also, make sure that the quality of services offered is good.

How do you open a trading account?

  why do i need insurance.

While a trading account is needed to buy or sell financial instruments, the investments you hold as an investor are stored in a digital depository called a demate account. A demat (dematerialised) account is just like a locker used to store valuables, only that it is an e-locker that holds your investments. Thus, you need a demat account, along with a trading account, to store investments. A demat account can be opened along with the trading account.

You can open a trading account with any broker (independent or bank subsidiary) registered with the financial exchange in which you want to trade. Before choosing a broker, you need to consider the following:

The services you need. For example, some brokerages offer investment advice/analysis in addition to the trading facility.

Benefits of angel broking trading demet.

Brokerage commissions/charges - Charges vary with different brokers. Also, brokers may charge based on number of trades or on amount of shares traded. Some brokerages require you to hold a minimum balance in your trading account.

Research brokerage firms until you find one that offers services you need at a cost that benefits you the most. Also, make sure that quality of services offered is good.

After you have decided on a brokerage house/firm, you're all set to open a trading account.

Application procedure

Apply online at the brokerage website with which you want to open a trading account or make a call.

Some brokerages allow you to submit an online application while others may send an agent to your address.

You need to fill up an account opening form along with a Know Your Customer (KYC) form.

Attach identity proof (PAN card, Aadhaar) and address proof (Passport, driver licence, voter ID etc) and submit the application.

You need to link your bank account to the trading account for convenient transfer of funds. This can be done by providing bank account details in the application form with the attachment of a cancelled cheque.

Your trading account along with a demat account (if you don't already have one) is created. The trading account login details will be sent to you in a few days.

You can trade now by logging into the e-trading platform offered by the brokerage or by making a call to your broker.

Making a trade

Transfer money to your trading account from your bank account.

You can place different types of orders using your trading account such as intra-day orders (where stocks are bought and sold in a single market session), delivery orders (stocks you can hold as long as you like) etc.

To place an order, select the type of order you want to place (intra-day or delivery), quote the price at which you want to buy or sell shares, the number of shares and submit on the e-platform or through a phone call to the brokerage.

Once someone in the market accepts the terms of the offer put forth by you, a trade is made. Money and shares are exchanged.

Brokerages also offer you margin, where part of the money for the trade is lent by the broker for short term trades (mostly for intra-day trades).

You can also trade in instruments other than equity such as commodities or derivatives.

Wrapping up

You need a trading account and a demat account to start trading in any kind of financial instrument. Financial instruments include equity, derivatives, commodities, mutual funds etc.

You can open a trading account with any broker registered with a stock exchange where you wish to trade. You need to submit the account opening form along with Know Your Customer (KYC) details, identify and address proof.

Link a bank account to your trading account to transfer funds for the trade.

Place an order by selecting the type of order and quote the price and number of shares/units/lots you want to trade.

A trade is made when someone accepts your offer.

Open a trading account today with Upstox for hassle free and seamless online trading experience with real time info and in depth analysis of market trends.

Importance of a trading account, and why you need it

Before online trading took over the world, stockbrokers were responsible for executing buy and sell orders on their client’s behalf. Today, trading services allow investors to directly place buy and sell orders on their own through an online trading platform. This has led to a phenomenal rise in the number of traders all over the world. In India alone, over 2.73 crore accounts are held by the depositories that include CDSL and NSDL! At the same time, there’s a Call and Trade facility wherein you can place a phone call and ask the broker to place a trade on your behalf. In online trading, the client's instructions automatically get directed to the exchange through the individual’s stockbroker.

Key Points

In order to buy and sell stocks, it is mandatory to have a trading and demat account.

A trading account is similar to a bank account administered by a stock broker, that allows a user to buy or sell securities. The trading account is linked to the bank account that provides the necessary liquid cash to buy/sell securities.

Analyze the trade opportunities available and draft out a trade plan accordingly.

In order to buy and sell stocks, it is mandatory to have a trading and a demat account.

What is a trading account?

A trading account is similar to a bank account administered by a stockbroker, that allows a user to buy or sell securities. The trading account is linked to the bank account that provides the necessary liquid cash to buy/sell securities.

A trading account is primarily used for transactions in the financial markets. An investor may hold as many accounts as he wishes, so it is not uncommon to have multiple accounts in case of several trading strategies.

Individuals and businesses can open trading accounts to carry out trade involving buying and selling of financial instruments such as stocks, options, commodities, derivatives and futures.

Business entities incur a higher market exchange data fee and can also incur higher commission rates. Commission rates may vary depending on the brokerage firm having either a flat fee per trade or a per-share fee.

How to Invest Using A Trading Account

We’ve previously covered the procedural aspects of investing using a trading account Here, we take you throw the strategic decisions you’ll need to take.

Risk management in trading:

It is one of the most important phases of trading. Traders have to stay in the game to thrive. Following risk management strategies is extremely important. However, if you are new to trading then you must take help of some veteran traders in order to implement risk management strategies. One of the most effective yet simple risk management strategy is when you put a certain amount of money in your trading account and do not withdraw all of the money in one trade.

Control the urge to trade:

When traders start winning then they keep trading more out of greed which is a very unhealthy practice as it could lead to huge losses. It is better to believe in quality rather than quantity, as some traders start taking trades which are low-quality trades and make scarce returns.

Never Take Unaffordable Risks:

Be defensive. Trading is not only about taking risks but also managing them well. Do not put out more than 5% of your stake on a single trade, no matter how sure you are.

Mental Clarity:

Trading is an extremely demanding activity and requires you to have a clear state of mind. A sharp presence of mind is essential to not be outrun by the economic activities in the market. Keep your trading plan in check.

Make sure to have a look at the economic calendar to be aware of events that may move the market, so you aren't taken by surprise during the day. These small steps can save you thousands of rupees over the course of a year.

Be patient:

You need to stick with your trade before you can receive your windfall returns.

Why Do You Need a Trading Account?

There are numerous reasons behind a trading account being essential:

It allows an investor to set his own trading limits, along with speedy execution of trades for profit maximisation.

There are some special services that allow placing orders even after market hours.

A trading account is used to measure an investor’s profitability position too.

It helps in reflecting the ratio between costs of goods sold and gross profits.

Wrapping Up

In order to buy and sell stocks, it is mandatory to have a trading and to open a demat account.

An investor may hold as many accounts as he wishes so it is not uncommon to have multiple accounts in case of several trading strategies.

Having someone to keep you on track will help keep lapses in trading to a minimum.

Have a well-maintained record of every transaction and use it to improve your trading practises.