Trading in the stock market has become popular in the last few years. More traders came into the market during the pandemic years than the previous many years combined as they were staying at home and online trading was a productive option. They found that can be a great place to make money.
If you are among those that are not part of that crowd but want to join the bandwagon, it is not too late. In fact, trading in the has become only easier since then. Today, you can complete all formalities online within a few minutes.
But, before starting to invest, it is essential to understand the , perform appropriate research and analyse your risk appetite. Here is your beginner’s guide to the stock market in a few steps:
Step 1: Look for a stockbroker
Brokers are intermediaries that create a pathway for traders to access the stock markets. Not just that, they will also help you complete your Know Your Customer (KYC) process and open a and a demat account.
While choosing a broker, there are a few things you need to mind:
Cost: It should be one of the biggest factors for zeroing in on a broker. Try to compare which broker has the lowest account opening charge and annual maintenance charge. You should also look at how much brokerage they charge on trading as it will add to the cost of trading.
Technology: You should also look at how efficient their mobile apps or web platform is. You should also search for how many downtime incidents the broker has faced. Avoid those that are infamous for their downtime.
Leverage: For many traders, how much leverage a broker provides can also be a deal breaker as it also decides the position size of a trader.
Step 2: Opening trading and demat account
Most brokers now allow traders to open demat and trading accounts online. Before you sign up, you should keep certain documents ready – Proof of Identity, Proof of Address, PAN Card, Bank Account details, etc. Also, keep your mobile phone near you.
Visit the website of the broker you are opening an account with. Figure out the link to signing up or opening an account. On 5Paisa, you can find a link to open an account on the home page. All you need to do is to enter your mobile number to start the process.
Fill out the form by entering basic details such as Name, Address, PAN, etc. Follow on-screen instructions and complete the process. If you already don’t have a demat account, you can also open one as the process continues. Make sure your laptop or computer – which you are using to open an account – has a webcam as most brokers ask for video verification now.
The broker will take anywhere between six hours to 48 hours to open the account.
Step 3: Logging in
Once the account is opened, you can log into your trading account by entering either your mobile number, user name or email id along with the password. Depending on the broker, you may have to enter a one-time password (OTP) sent to your mobile or email id.
After you log in, you need to add money to your trading account to trade. You can use your linked bank account to transfer money to the trading account and vice versa.
Step 4: Trading
All brokers provide live quotes for stocks listed on exchanges. You can search for the stock or security you want to buy or sell and open an order window. You can also search for futures and option (F&O) contracts to trade. Some brokers also provide a separate trading terminal that you can install on your system to trade in F&O.
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