Question- Give the steps in online trading.

Ans.

Steps in Online Trading

You can Trade Online by following these steps-

Step (I) Open a Demat Account : You need to open a Demat account. This is the account that holds all your investments - equities, commodities and other investments. Demat account is provided by brokerage houses, so you need to find a good broker and open the account. Make sure the brokerage houses is registered with SEBI. You should also check the brokerage charges and other charges the firm charge for their services. You will get the trading platforms a trading account with it for trading.

(II) Know the Basics of Market : You need to learn the basics of the market. You must understand and able to predict market movements. For the same, you can take up online classes, or some trading courses, and also read yourself from online portals.

(III) Put Your Learning in Action : You need to put your learning in action. By this, we mean you need to practice what you learned. Before entering the market with real money at stake, it is better to practice with some demo accounts and virtual money. There are different stock simulator which can help you practice trading. Since you are not investing any real money, there is no fear of losing any.

(IV) Plan Your Trading Strategies : You need to plan your trading strategies. You need to decide the investment goal, investment budget and the result you want. Accordingly, you need to set the investment strategy. You open a Demat account with a DP- which is registered with a Depository (either CDSL or NSDL) and also registered with SEBI. You have a bank account linked to your Demat and trading account. So, when you place a trading order on your trading platform, the order is processed by your brokerage house. Then the Depository debits or credits the shares traded to your Demat account. The bank account gets debited or credited according to the transaction. SEBI is the regulator. It takes around 2 days from the day of the transaction, for the settlement of an online trading order.

Online trading is quite simple and thus completed within less time. There is no hassle in placing orders and getting your orders executed with the right kind of trading platform.

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