How to start trading in stock market for beginners online
When an online platform provides facilities to buy or sell financial products such as stocks, mutual funds, bonds, or derivatives, it is called online trading. It doesn’t get any easier than this. In every way, online trading is like logging into Amazon or Flipkart and buying goods.
You just need the internet, a mobile or laptop, and some money to trade. That’s it. You can trade from anywhere and at any time. That, my friends, is the essence of online trading.
To understand what online trading is, you undoubtedly need to learn how online trading is conducted, the benefits and drawbacks of online trading, and its types. Keep reading to clear all your doubts.
Topics:
- Benefits of Online Trading
- Drawbacks of Online Trading
- How to Trade Online?
- Types of Online Trading
- Best Companies Offering Online Trading in India
- Top Benefits of AliceBlue
- Quick Summary
- FAQ (Frequently Asked Questions)
Benefits of Online Trading
- Online trading is the easiest way to buy and sell stocks.
- Traders can track the market and their trades in real-time.
- Many types of instruments are available on a single trading platform. For example, trading in stocks and buying gold bonds or mutual funds can be done on the same platform.
- You can trade from anywhere and at any time online.
Drawbacks of Online Trading
- During highly volatile days, online trading platforms are prone to technical glitches.
- Beginners might take some time to familiarize themselves with advanced trading platforms.
How to start trading in stock market for beginners online
How to Trade Online? Step 1: Contact a SEBI-registered broker to open a demat and trading account. You can open an account by submitting documents such as PAN, Aadhaar card, a cancelled cheque, six months’ bank statement, and a passport-sized photo. Step 2: After the account is opened, you need to transfer funds from your bank account to the trading account. Step 3: Now you can start online trading. Click here to open your account in just 15 minutes!
Types of Online Trading We have categorized online trading into 3 types:
- Quick Trade: Scalping and Intraday Trading
- Positional Trade
- Investing: Share Investing and Mutual Fund Investing
Quick Trade
- Scalping: In scalping, trades are held for just a few seconds to minutes, mainly used in highly volatile stocks to capture as much price movement as possible. Often known as micro-trading, scalping traders execute hundreds of trades in a day.
Scalping is a very high-risk category and requires good experience and expertise in the stock markets. You can do scalping with a small amount through leverage.
- Intraday Trading: As the name suggests, intraday trading involves buying and selling stocks within the same day, also known as day trading. In intraday trading, the holding period can range from minutes to hours. Typically, intraday trading is based on technical analysis and news or events.
Intraday trading is also a very high-risk category and requires some expertise in the stock market. You can do intraday trading with a small amount through leverage.
Learn everything about Intraday Trading here.
Positional Trade If you hold a stock for more than a day, it is called positional trading. It is based on the idea that the stock’s value will increase over several days to months. Traders follow a trend and wait for it to reach its peak.
Positional trading can further be classified into swing trading, which is also strategy-based but typically involves holding for several weeks.
Positional trading falls into the medium-risk category and requires more capital as you need to pay the full amount for the shares you buy.
Investing When you buy stocks to hold for several months or years, it is called investing. Stocks or mutual funds can be invested in.
While investing in stocks is considered medium-risk, mutual funds are regarded as low-risk instruments.
Best Companies Offering Online Trading in India Brokers are of two types, discount brokers and full-service brokers.
A discount broker provides trading and investment services at the minimum possible cost, whereas a full-service broker offers comprehensive services such as investment tips, hand-holding, trading reports, etc., but at a higher cost.
Well, AliceBlue is an exception! We provide full-service broker services but at discount broker prices. This means we charge the lowest brokerage fees while still offering full-fledged services like a full-service broker.
Top Benefits of AliceBlue
- Unique Services: To make your trading experience easier, we offer a single account for equity and commodity exchanges and provide two unique products:
- Trade School: This is a stock market education platform that helps you learn everything about the stock markets, from beginner to advanced level, through webinars, live sessions, courses, etc., by top traders and investors in India.
- Trade Store: This is a marketplace offering amazing apps that make your trading and investing experience easier. The Trade Store has 15-20+ products that can be accessed independently or at special prices if you are an AliceBlue client.
Here’s how the Trade Store can help you in your trading and investment journey:
- Invest in mutual funds with zero commission through direct mutual fund investments.
- Invest in IPOs with a click through UPI.
- Choose from ready-made strategies on a different trading platform.
- Buy and sell signal software with 70-90% accuracy.
- Use stock screeners and market sentiment analyzers for better decision-making.
- Predefined technical and fundamental analysis strategies.
- Advice, and much more.
Brokerage We offer two brokerage plans:
- Trade Pro Plan: Offers higher margin with slightly higher brokerage.
Freedom 15 Plan: Provides good margin with the lowest brokerage in the industry.
| Segment | Brokerage |
|---|
| EQ Intraday (NSE, BSE) | ₹ 15 per order or 0.05%, whichever is lower |
| EQ Delivery (NSE, BSE) | ₹ 0 |
| FUT (NSE, BSE) | ₹ 15 per order or 0.05%, whichever is lower |
| OPTION (NSE, BSE) | ₹ 15 per order |
| FUT (MCX) | ₹ 15 per order or 0.05%, whichever is lower |
| OPTION (MCX) | ₹ 15 per order |
| CURRENCY FUT (NSE, BSE) | ₹ 15 per order or 0.05%, whichever is lower |
| CURRENCY OPT (NSE, BSE) | ₹ 15 per order |
Here’s what is mentioned here about how margin works:
Suppose you have ₹10,000 in your trading account. If you’re using bracket orders for intraday trading, you can buy stocks worth ₹50,000.
Calculation: ₹10,000 x 5 times leverage = ₹50,000
For more information on daily margin requirements, refer to this page.
Trading Platform
We provide the most trusted and secure trading platforms with amazing features:
Web-based application: ANT Web
Mobile application: ANT Mobi
Using all these trading platforms is very easy and they provide more than 1 year of historical chart data, 80+ technical indicators, multiple watchlists, and many advanced features.(Link)
In total, you get the benefits of a full-service broker at the cost of a discount broker!
Open your account now!
Do you know that there are various other forms of online trading and other important concepts related to it that you should know about? Click on the articles below to read them in detail.
Quick summary:
Online trading is akin to online gaming – it involves risking money for potential joyrides. All you need to do is open a trading and demat account, transfer money from your bank account, and start trading. Scalping and intraday trading involve high risks but can be done with a small amount due to leverage. Position trading is riskier and requires more capital because you need to pay the full amount for the shares you buy. When you buy shares to hold for many months or years, it’s called investing. Investing in mutual funds is quite convenient and can be done with small amounts on a monthly basis.”
Margin:-
| Segment | CNC/NRML | MIS | CO | BO |
| NSE CASH NIFTY 50 STOCKS | MAX 5X /(APPLICABLE+VAR+ELM) | MAX 5X /(APPLICABLE+VAR+ELM) | NA | MAX 5X /(APPLICABLE+VAR+ELM) |
| NSE/BSE CASH A GROUP STOCKS | MAX 5X /(APPLICABLE+VAR+ELM) | MAX 5X /(APPLICABLE+VAR+ELM) | NA | MAX 5X /(APPLICABLE+VAR+ELM) |
| NSE/BSE CASH OTHER GROUP | 1X TIMES | NA | NA | NA |
| NSE FUT NIFTY-50 STOCKS | AS PER SPAN+EXPOSURE MARGIN | AS PER SPAN+EXPOSURE MARGIN | AS PER SPAN+EXPOSURE MARGIN | AS PER SPAN+EXPOSURE MARGIN |
| NSE FUT OTHER STOCKS | AS PER SPAN+EXPOSURE MARGIN | AS PER SPAN+EXPOSURE MARGIN | AS PER SPAN+EXPOSURE MARGIN | AS PER SPAN+EXPOSURE MARGIN |
| NSE INDEX OPTIONS BUY | AS PER PREMIUM | AS PER PREMIUM | NA | NA |
| NSE INDEX OPTIONS SELL | AS PER SPAN+EXPOSURE MARGIN | AS PER SPAN+EXPOSURE MARGIN | NA | NA |
| MCX | AS PER SPAN+EXPOSURE MARGIN | AS PER SPAN+EXPOSURE MARGIN | AS PER SPAN+EXPOSURE MARGIN | AS PER SPAN+EXPOSURE MARGIN |
| CURRENCY | AS PER SPAN+EXPOSURE MARGIN | AS PER SPAN+EXPOSURE MARGIN | NA | NA |
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