Everything you need to know about Trading in India

Trading is part and parcel of one’s financial journey. People often take their investment decisions very seriously as it proves to be a powerful secondary source of money. For some who are experienced and have the insight make investing their primary source of income. However, in order for this to happen, you need to first learn the basics of trading.

Here is a detailed account of everything you need to know about trading:

Basics

One of the most basic systems you should have in place before you start trading is to open a trading account. In India, it is mandatory for all investors to open a demat account. This is short for dematerialised account. This account maintains your trades in an electronic format. With the opening of your demat account you will receive a unique ID which can be linked to all your trades.

BSE and NSE

While trading in India, it is important that we put it out there that the Bombay Stock Exchange and the National Stock Exchange are different entities. They are separate stock exchanges in India itself.

Everything you need to know about Trading in India*Image Source Google

Trading Tips

· Never risk more that 10% of your trading capital in a single trade

· If you are reading trends and are unsure, stay away from the trade. There are multiple others that will come your way.

· Distribute and diversify your portfolio. Differentiate your trade into multiple asset classes, this way you will provide a cushion for your losses with other successful trades.

· Do not let emotions sway your trading decisions

· Stay safe of over trading. This is a common mistake you can make if one of your trades are successful. Maintain that individual trade but do not overindulge.

Brokerage

Also known as a brokerage firm is the middleman between the buyers and the sellers. They help facilitate a transaction. Your broker will also help you with trading tips and will assist you in managing your trades.

Finally, to conclude one important tip you should adhere to at all costs - Do not EVER go to Dalal Street and ask the sandwich seller for trading tips.