The main goal of investors and traders is to reach a point of financial success to meet their requirements, both at a professional and personal level. To do this, several investors look to the Indian stock markets to earn profits. However, comprehending the basics of trading is important before you gain knowledge of the finer aspects of stock trading. Trading in stocks may require fundamental knowledge, technical analysis and acumen to make profits. Before you start using methods of stock trading, like Intraday Trading, you may wish to have clarity in some concepts related to trading in general. The first thing to do if you wish to start trading is to open a Demat account. You can do this with a brokerage such as Motilal Oswal or a bank that has facilities for this. Brokerages and banks that offer you facilities of a Demat account are called DPs or depository participants. Demat accounts hold your stocks once you have bought them. A Demat account holds your shares and stocks in electronic format. You may also consider a linked trading account which essentially gives you a platform to trade (purchase/sell stocks).
After you have learned about the basic accounts that are linked with trading and investing in the stock market, you will probably get a grip of what traders actually do to trade. The main thing to know is that there are two main ways that stocks can create wealth for investors. The first way is by long-term wealth appreciation, and the second, by day trading. Long-term wealth appreciation means that traders/investors buy stocks and hold them for a period, maybe several years, profiting via the growth of the company whose stocks they hold. Day trading, or intraday trading, on the other hand, is done with the aim of short-term appreciation. Here, shares may be purchased and sold within the same 24-hour time frame. Intraday trading is a method of trading, and the holding of shares through this means of trading is done in an intraday trading account, which is technically a trading account for this purpose. When you open a Demat account with a reputed broker such as Motilal Oswal, you get the benefit of opening a free Demat account online. This can get automatically connected to a trading account, and you are all set to try out intraday trading. Furthermore, when you open your free Demat account, you can select the depository of your choice. There are two main ones, the National Securities Depository Limited (NSDL), and the Central Depository Services Limited (CDSL). DPs are registered with either, or both, of these two main depositories to hold shares in Demat accounts.
To fruitfully participate in intraday trading, you must have a Demat account linked to a trading account that facilitates day trading activity. On the stock exchanges, only members (brokers) are permitted to trade. Therefore, you must open a day trading account with a reliable brokerage like Motilal Oswal. Before you jump into the fray of the trading world, you may want to know that Motilal Oswal gives you attractive offers when you open a Demat account and an intraday trading account with them. These include nil maintenance costs for life and discount coupons. The first step to trade with stocks on a day trading basis is to understand market trends if you are to see any gains from your intraday trading. Knowing that you must buy and sell stocks on the same day in order to make a profit is one way to begin intraday trading. Other than that, some basics must be a rule of thumb and you can be on your way to trade.
Opening a Demat account and a trading account is easy to do online. If you sign up with a broker like Motilal Oswal, you can use the versatile portal for day trading or invest through the MO app. Either way, you should comprehend some basics mentioned below:
Essential takeaways of day trading need to be known so that investors are able to make profits on a single day. This may seem like something of a challenge, but through strategies and patterns of stock prices, traders and investors can determine exactly which stocks to buy and sell within 24 hours. Here are 5 things to be aware of:
Typically, the kind of trading you get involved with is largely determined by your trading and investment goals. You may be a long-term investor, and delivery trading would suit you. Contrastingly, if you wish to see short-term gains, you may want profits quickly and intraday trading could benefit you. Day trading has many advantages, and these include a nil overnight risk, a high degree of liquidity and low fees/commission for brokerage, among others. If you wish, you may open an intraday trading account by following the steps below to kickstart your short-term profit-making:
Although, technically, intraday trading does not make use of the holding of shares, it's necessary to open a Demat account if you are trading. This may prove advantageous in case you switch to delivery trading in the future. It may also help in case your day trading is unsuccessful and you have to hold on to stocks. Besides this, the Securities and Exchange Board of India (SEBI) has made it mandatory to open a Demat account if you wish to partake in any trading activity.
Whether you are deciding to join the world’s ever-growing population of day trading investors or looking for long-term investment options, you need a reliable and reputed broker at your disposal. Your search ends here as Motilal Oswal is a renowned brokerage backed with years of trading and investment experience. This is enough reason for you to invest with Motilal Oswal, but here are some more to consider: