How To Start Trading Online
Stock trading is your window to long term wealth creation and online trading gives
you more power in your hands. But how do you start online trading?. There are 3
basic things you need to know about trading on equity on the online platform. Let
us understand in detail how to open an online trading account and how to do actual
How to open an online trading account
It is just like
opening your trading account with an equity broker. You have to fill up
the form and sign at appropriate places and submit all the required documents. There
are 3 kinds of documents that are required. Firstly, PAN card issued by the Income
Tax Department is a compulsory document. In case you do not have a PAN card, you
can apply for a PAN card and affix a copy of Form 49 acknowledgement. Secondly,
you require a proof of identity with your photograph as part of the document. It
could be your passport, driving licence, Aadhar card etc. Thirdly, you are required
to furnish proof of address. It can be your passport or your latest landline telephone
bill, electricity bill, water bill etc. Once these documents are submitted, the
broker will verify the documents and open your trading account within 2-3 days.
Normally, a demat account is opened along with the trading account. SEBI has recently
permitted clients to do online Aadhar based authentication to open a trading account.
This is a fairly simple E-KYC process and just requires a few minutes of your time.
Normally, brokers will also require you to either appear in person over the video
conference or visit the nearest authorized point for in-person-verification (IPV).
Once that is done, you are good to operate your trading account.
How to start actual online trading?
Once your trading account is opened, you are allotted a user name and a password.
Normally, these are sent to your address by registered post. Nowadays, brokers are
also allowing you to set password through registered email supported by mobile authentication
using One Time Password (OTP). You are required to go through the following steps
to actually start online trading on your account.
- Once your user name and password is received, you are first required to activate
your trading account by logging in. The system will prompt you to change the password
and also add an additional level of authentication.
- Once that is done, you are ready to trade. But before you start trading, you need
to fund your account. There are different ways to fund the account. If your broker
is offering you a 3-iin-1 account then you can directly transfer from the connected
bank. If it is a 2-in-1 trading account then you can either transfer the funds via
NEFT or you can use the payment gateway to transfer funds..
- Once the funds are transferred and the account is funded, you are ready to trade.
You can place orders on the trading platform by defining the quantity and the price.
Once the order is placed, you can check the status of the order in the order book
in your online trading account. Once the order is executed (either fully or partially),
the executed portion of the order is reflected in the Trade Book.
After you starting trading online, it is very essential to get comfortable with
the online trading platform. There are 3 important steps that you need to take.
Firstly, you can go through the complete online trading presentation
or documentation that is provided by the broker so that you come to know about all
the facilities offered. Secondly, don’t jump into large trades. Get your comfort
with smaller trades and gradually build up. Lastly, check that the movement of bank
debits, trade execution and demat credits happens seamlessly. That is the core of
your online trading account.