Let’s look into the basics of stock market.
You need a Demat Account
Currently, the shares are held in an electronic structure in demat (dematerialized) accounts.
The two depositories in India which can hold the depositor’s certificates in electronic form are National Securities Depository Ltd and the Central Depository Services Ltd. They have over hundred agents called Depository participants. A Depository participant has to be approached to create an a online trading account
so that the electronic forms of your share certificates are held just like a bank account.
PAN Number is required
A Pan Number, i.e a Permanent Account Number is mandatory which has to be obtained from the Income Tax department. This is required to trade in shares.
If you wish to invest in shares where a single investment is above Rs 1 Lakh , then the Unique Identification Number (UIN) is required by SEBI.
Locate a trustworthy broker
A registered broker with SEBI is required to trade in stocks.
There are plenty ofa online share trading brokers existing in India through which you can trade in the share market.
Brokers will assist you to buy and sell shares.
Methods of Trading:
When we are prepared to buy or sell shares at the market rate, then it is known as market order. This gets executed straight away at the of a current market price
This is different from a market order. We need to state the buying or selling price. Once the stock price comes to that price, your order will get executed.
Stop-loss share trading
In order to limit losses, stop loss and trigger price are applied. You can indicate the amount that you are ready to lose. This is vital for intra-day trading.