June 15, 2021

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How to start trading and investing in Indian stock market?

How to start trading and investing in Indian stock market

Ever wondered what is the meaning of shares and share markets is all about? Let’s learn share market basics in this blog guide. Each and every one of us has defined aims or motive in life and have time limits by which we all have to get such aims. For instance, people may plan to study abroad, buy a vehicle, or build a house, etc. To achieve these aims, people require to have the right and appropriate financial planning. By this mean student, investment has to become your habit. Financial assets or share markets offer high returns and so start investing at a young age and do it continually for a longer period of time. Students can invest in the stock market India for the short term or long term based on their desire as well as needs. Depending on the risk appetite, age and dependency, students can be a trader or investor in the share market too. Because the share markets are always linked with a few risks, so people have to read carefully. The various investment choices in the Indian share market nowadays are shares, equity, mutual funds, SIP, IPO, bonds, debentures, derivatives, commodity, currency, etc.

How to start trading and investing in Indian stock market


However, students find to invest their surplus income to further grow their wealth. The stock market is the best place to do just that. Strategic trading on the stock market can help and assist you supplement your income – disciplined trading over time can help you replace your income, as well. Trading on the stock market provides people the freedom to work from wherever they need, whenever they need. Trading on the stock market assist students increase their retirement funds, financing business expansion, and achieve other financial aims. Nowadays, with the help of electronic trading accounts, anyone can start trading online. Here is a few basic important information people should know early they can begin with trading successfully in the Indian share market or Stock market India or Stock market USA: Follow these several steps to start students investing in stocks now. –

1-Find the appropriate broker –

In India, people trade stocks on the following two sectors or forms:

  1. a) BSE – It refers to the Bombay Stock Exchange established in 1875 and is the oldest stock exchange in Asia.
  2. b) NSE-  It states as the National Stock Exchange and has the largest stock exchange in India.

Hence, to gain access to such exchanges, retail traders required to register with brokerage firms or DPs means Depository Participants first. As its really essential to find the accurate DP as retail investors will purchase, store, and sell stocks via them. They will cater to the interface through which people will interact with the stock market directly. It is highly preferable to open an electronic 2-in-1 Demat or trading account with a DP as such accounts let you trade in stocks from the convenience of your home or comfort zone. An electronic account is also very helpful as it lets you review all your positions at a single glance.

Despite few DPs cater real-time market data to registered end-users. In the stock market, deep-dive-information is money, and the current or latest research can mean the difference between a profitable or a loss-making share trade. Therefore, select your broker or DP thoughtfully before you join and begin trading. Once you have zeroed in on a DP of your choice, keep the following docs handy.

2-Required and needful Documents-


To trade share market or stocks, you will require a Demat account to store your positions electronically and a trading account to execute the trades. Most DPs provide a 2-in-1 Demat and trading account. Here are several important documents that are needed to open the Demat account:

  1. a) firstly should need the permanent address proof 
  2. b) Identity proof of the person who wants to open an account
  3. c) e-KYC – Few DPs will let you associated your AADHAR card to your trading account electronically, therefore removing the requirement for manually scanning your aadhar card
  4. d) Additional important information such as the annual salary amount may also be required.

Stock market India caters to a smooth application procedure to open an online Demat and stock/trading account. The Demat application procedure can also completed online as well. There is no requirement to manage heaps of any kind of paperwork or stand in long queues like earlier times. Stock market India also offers its registered end-users cutting-edge data and analysis that supports them stay ahead of the stock market. The stock market USA interface is very adaptive, and changes as per the financial goals and risk appetites of the end-users. The world of the trading stock market is huge and highly complicated, and Investing in us from an India trading account can be your trusted guide through it. So what students have to do to invest in the share/stock market? Primarily, start with a Demat and trading account online with the right broker and connect your bank account with that. Opening a Demat account is a very easy and quick process. Whence, once you have done with your Demat and trading account, simultaneously people can start investing in the Stock market India It’s quite important for you to be familiar with the stock exchanges and their aspects as well as functions. The stock exchange is a platform where purchasing and selling of shares take place. However, the stock exchanges are ruled by SEBI (Securities and Exchange Board of India).  So as per your aims, choose the particular financial asset for your investment in the Indian stock market. Generally, the Indian share market is the one-stop solution destination for all your needs and desires. If you are more concerned about regular income and preservation of capital, you can opt for debt instruments likes relation & bonds. Also if a person wants capital appreciation and willing to take any risk, then equity is the one for them. Similarly, before a person or student invest in a share, do a deep-complete study of the company, its financials, future prospects of growth, etc. Below is what you have to do to achieve your aims- 

  • Define your goals
  • Learn about all financial assets
  • Select the respective asset as per need 
  • Start investing daily
  • Fulfill your goals

We hope you have got a basic idea of the share or stock market and so now it’s time to understand the various financial aspects.

3-Difference between trading and investing –


In this case, once the entire documents are submitted, the DP will cross-check or review the submitted information or details and then deliver you with the account login details. With the account details, people can log into the Demat account and start trading as well. There are two various strategies that they can select from:

  1. a) Trading:

In a trading strategy, people will aim to turn short-term price fluctuations into money profits. This strategy is almost followed by intraday traders (daily traders) who clear all their positions by the end of the day (EOD). The goal here is to take big, sound, voluminous positions and look to sell upon the smallest or price fluctuations. However, in the process of trading, when you purchase stocks using your trading account, funds are transferred out of your bank account, and the share is transferred into your Demat account as well. And the same when you sell out your share, similarly it’s transferred out of your Demat account into the share market. The money outcomes from the transaction will be created available in your bank account soon.

  1. b) Investing:

Contrary to stock trading, investing means holding your fund’s positions for a longer duration of time. The motto here is to discover undervalued firms, purchase their stock, and keep your position in them via the temporary share market ups and downs.

4- Proper research about a company –

This is important as before purchasing a company’s stock, it is significant to conduct thorough research on the company’s background, history, and goodwill. A trader should consider the following factors:

  1. a) The company’s revenue model
  2. b) The company’s management stability
  3. c) The company’s competitors, etc.

5- Develop a diverse portfolio –

While Investing in us from India, it is essential to maintain or keep a diverse portfolio. As a trader people must mix up various platforms in your portfolio so that your portfolio is not uniquely vulnerable to the ups and downs in one corner. Share market traders should also look to invest in large-cap firms for stability but small returns, and small-cap firms for large but more unreliable returns.

Nevertheless, the stock market is a lucrative means of investing and can generate a high amount of returns, catered you follow the aforementioned principles carefully. So keeping these few important tips in mind, whenever you begin a foray into investing in the Indian stock market.