HOW TO START TRADING ?

Trading Account

An Equity / Derivatives / Currency / Commodity Trading Accounts are what you open with a Stock Broker or Trading Member of a recognized Stock Exchange, transfer funds from Bank accounts, and then buy/sell stocks, commodity, currency pairs, debentures, Futures & Options. This can be done, either online (personnel computer or mobile trading software platform) or offline by contacting dealers appointed by stock brokers, or by visiting theirs premises. Online trading of securities like shares, debentures, currency pairs, options and other securities are monitored by security (stock, currency etc.) exchanges.

Demat Account

The account where you keep stocks in electronic format is called Dematerialised Account. Dematerialized Account popularly known as Demat Account like Savings Account allows you to keep money in electronic format. Hence Demat Account is a safe storage for your stocks and this is the only use of a Demat Account.

To trade only Futures & Options, which are contracts and having an expiry date and hence there is no necessity of a Demat Account for trading such derivatives, but trading account is required.

Stock Brokers provide Login ID and Password to enter trading platform (software) for trading online placing buy/sell orders.

Exchange Opening And Closing Time
Online securities Market opening, closing, order placement, day traded securities auto closing time if applicable etc. are different in different countries and markets or exchanges. To know about such timing one should contact customer service center of securities brokerage firms where he or she has opened trading - demat account or related news updates searching as it can be varied time to time due to day light saving, Exchange decisions etc.



Trading order placements

The request by a client to buy or sell financial instruments is called order placement. Price and quantity at least must be entered in buy or sell orders of a financial instrument, to indicate at what price and how much needs to be bought or sold.

Types of orders

Market order

By submitting "market order", without limit price in order window, the client accepts any possible price. The buy or sell price is uncertain here.

In a market order placement there is no guarantee for best ask price or best bid price execution. Market orders are executed immediately or as the trading center practices. But Market Order type helps to get buying or selling executed as early as possible when buyer or seller does not bother about differences in price like spread - difference between ask bid prices - or due to any immediate movements or fluctuations in the market. If the scrip to buy or sell has good volume with low spread in market and active in live trading session, traders may go for Market Order.

Limit order

By placing a "buy limit" order, one can limit the buying price of an order and thus the capital invested, using upper limit price. No buying will be carried out above the limit price. With a "sell limit" order, one can provide least approvable sell price using lower limit price. No selling will be carried out lower than the limit price.

Execution of the order is not certain in a limit order placement. And chance of part by part execution is also, based on availability of opposite side traders with limit buy (at or below) or sell (at or above) price.

Stop Loss

Assume you bought a stock ABC at a price of $100. Your target for intraday is 103. After two hours of buying ABC, it reached @ $101.50. But now you have a meeting to be attended and need to be offline from trading platform. And your plan is to close position of ABC if it goes below $ 98.5.

In such a situation Stop Loss order can help you. There are two types of Stop Loss orders. Stop Loss Market order and Stop Loss Limit order.

Stop-loss Order (Market)

Stop-loss Market Order allows a trader to cover their position if the market rises or to sell shares if the market declines against his expectation. The buy stop price is above the current market price. A sell stop order is placed below the current market price. Once the trigger price (should be entered while order placement) of a stop loss order is hit the order (buy or sell) becomes a market order. The best bid price or the best offer price is not guaranteed as it turns to a market order. The order execution depends on the stop loss order price.

Stop-loss Order (Limit)

Stop-loss limit order becomes a limit order (that already has been discussed) after hitting of the trigger price of the order. The execution of the order is not certain.

Immediate or Cancel (IOC) Order

These orders are immediately traded just after order placement by traders or cancelled by the exchange. The execution of the order is not certain in IOC orders.


Price changes in Stock Market depend up on many factors.
Related Artcles:

INVESTMENT RISKS 

TRADING PSYCHOLOGY



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