How to Start Trading in Stock Market in India

Do you want to trade/invest in share market and then drop the idea because you don't know how to start? This post is just for you.

Basically as a beginner either you have no clue about how to start your journey in share market or you are overloaded with too much correct/incorrect information. Many people that are looking to enter into stock market and try their hand into it, can relate to this situation. So to make it crystal clear, here in this discussion I am going to tell you how you can take your step towards stock market. These are 6 basic steps that you need to take –

GET

1.    Get your PAN number if you don’t have one:

This is the very first step of your journey.It is not possible to have a Trading account without a PAN Card so if you don’t have PAN number, you can apply for it offline/online. Here is the link of official website of NSDL to apply for PAN Card Online where you can apply for PAN. It’s as easy as shooting fish in a barrel.

2.    Open a Bank Account if you don’t have one and Apply for Net Banking facility:

After getting PAN number now you are all set to open bank account. You can open account in any bank which you like. It will be used in Fund Transfer between you and your stock broker. Now all brokers are providing online facilities. So you don’t have to drop a cheque and wait for 2-3 days to load money in your trading account. Fund can be transferred immediately using net banking.

3.    Choose your Stock Broker:

Once you have PAN and bank account, you are eligible to apply for Trading & demat account. The first and foremost step is selecting the stock broker, as you cannot trade in stock market without broker.

There are two types of brokers in the market, "Full Service Brokers" and "Discount Brokers". As the name suggests, Full service brokers provide a variety of services like research, tips/advisory, analysis and personalised relationship management services besides pure execution services. Angel Broking, ICICI direct, IIFL are most popular full service brokers in India.

Where Discount brokers like Zerodha, Tradejini, RKSV usually offer only pure execution services. They charge flat fee execution commissions which are far cheaper (ALMOST NEGLIGIBLE) than the commission of full service brokers.

Selection of broker generally depends on cost, Platform/facilities given by broker and also on what kind of investor you are.

Although it is a matter of choice yet I would suggest you to choose discount broker if you want to be a trader because their brokerage will be less. They provide one of the best trading platform. Also it is best suitable for first timers as it gives great learning experience.

But if you want to be an investor purely, then you should select full service broker because they provide many services like portfolio management, dedicated support etc which are necessary for an investor. They have experts with whom you can consult regarding to your current positions in the market.

4.    Open an account:

When you get a best suitable broker, open an trading and demat account with them. To open an account You need to submit your PAN, An Address Proof like Electricity Bill, Aadhar Card, Voter Card, Passport etc your Bank statement/Cancelled cheque of that account which you want to use in transferring funds. Remember you can not transfer funds from any account other than account specified while opening of trading account. Though you can change it if you want to. You may need to submit your income proof like bank statement or Income Tax Returns if you want to trade in “Future and Options” segment.

Account opening process takes around 2-3 working days depending on your broker. After it you will get your ID/password demat account number, and a welcome kit cum user manual. 

You can open your trading and demat account at zerodha in just 1 day with your Aadhar and PAN. They offer best service at cheapest brokerage (No brokerage for Equity delivery). Account opening process is also totally online.

Click here to open account with ZERODHA

Kudos, Now all procedural part is completed. 

Set

5.    Learn about Platform:

Next step is to learn about various features and tools in platform which is provided by your broker. Platform can be in website format or in computer software or in a mobile app format. Most of the brokers provide all of these. Getting comfortable with the platform is very important so it is advisable to explore the platform as much as you can.

Go

6.    Start Trading:

Lastly the moment you are comfortable with the platform, start your trading.

Now you are ready to make a move. May you be the next Warren Buffet/ Rakesh Jhunjhunwala. My best wishes to you and if I forgot something which you want to know, write in the comments and let me know.

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