3 Steps to Trading in Stocks

 1. Open Demat Account

You can open one with a bank or a brokerage house.

Cost:

Account opening charges of Rs. 500-700 and an annual maintenance fee of Rs. 300-500

Documents needed:

  • Your PAN
  • Aadhar card
  • Photograph
  • Identity proof
  • Address proof

The bank may also require you to open a savings bank account for debiting charges.

2. Open a Trading Account

Banks offer 3-in-1 accounts that combine banking, demat and trading. You can also open it with a brokerage house.

Cost:

No charges except the one-time cost of legal documents. Brokers earn from the 0.5% (variable) brokerage you pay on transaction.

3. Start Trading

You can choose to place orders online or offline . It’s best to start offline so that you get the hang of it before you move to online trading. Understand basic terms like market order (buy at the prevailing price) and limit order (specify a price at which to buy). Also, understand how you can lower risk with the help of stop loss.

Equities tend to be volatile and small investors should not lose hope by initial losses.

Happy Trading.

 

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