Everything you must know about online share trading

Nowadays, shares and equity trading has become increasingly popular all over the world – especially with the easy way in which individuals can make investments. Recently, people have been eagerly learning how to do online trading in India, adding around 400,000 investor accounts each month in 2020. But to be successful, you need to do your research. 

What is share trading?

When you have a share business that runs on trading, you are purchasing and selling company shares that were listed on the stock exchange. People usually use a share trading center in order to engage in this process, without the need for a broker.

Online share trading is different from investments because, unlike the latter, you do not keep the shares. Instead, you sell them within the same trading days so that you can earn additional income. The shares must be done within trading hours, because failing to do so may lead to losses. 

Regardless of your method for investing, you need to respect a certain share trading time. For example, if you are learning how to trade in share market in India from another country, then the trades will be done in Indian trading time. You might want to familiarize yourself with their share trading time as well so that you do not lose open positions. 

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How are the share prices decided?

Reserve Bank of India (RBI)

Additional income is made through share trading due to the volatile prices of a particular share. The prices themselves are decided by supply and demand. For example, if a business is expected to earn more in the future, these expectations could lead to more people trying to buy its shares and join the investing crowd. This can cause the prices to rise, increasing the potential income of the current shareholders. 

On a similar note, negative thoughts about a company’s future might make people reluctant to buy its shares. As fewer shares are sold and bought, the prices will also be lower. This might make it challenging to get extra income out of shares, as the trader will not be able to sell at the purchase price and take a better position.

How do you begin trading?

To begin trading, you first need to open a trading account on a trading platform. Those learning how to start share trading in India might want to make sure that the platform they use accepts trades from Indian companies. In order to set up an account on an online trading platform, you need to provide information such as proof of identity or linked bank cards. 

Everything you must know about online share trading

Beginners in trading are initially recommended to start with a demo account. These accounts will typically feature demo funds that you may use for practice. This way, you will learn how to trade for a specific amount of time, without putting your real funds at risk.

Traders that are only at the beginning of their path may also want to consider using mirror trading. With mirror trading, you may copy the moves of another investor until you learn how to work the market yourself. The trades will be done at almost the same time, with the online share trading center recommending specific experienced traders to follow.

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How to add funds to a trading account

Once the account has been created and the demo period has expired, comes the time to add the funds to your account and dive into the actual trading process. Traders will have to go through the following steps:

1. Log into the newly created account using their login information, such as their username and password. The information added will mainly depend on the trading platform used. 
2. Visit the “Transfer Funds” sections, or the equivalent for the platform used. Select the bank account that you added when you initially created your account.
3. Select the amount that you wish to have transferred from your bank cards. Most platforms allow you to transfer the funds back to your cards, should you get additional income or simply change your mind.
4. Create a company watchlist. This way, you can keep an eye on the sum so that you may buy shares whenever you wish. 

It is important to have bank cards that coincide with the currency of the platform. For instance, if the platform works mainly with Indian rupees, then the bank account you linked must work with this currency as well.

The bottom line 

Share trading can help bring additional income to your household, but bear in mind that it is always recommended to start with small trades. Otherwise, you might put your funds at risk. When you get better at trading, you can try more daring strategies – but even then, you should be careful.