Number in shares transacting

Having an online brokerage account is quite easy now-a-days. There are various companies in competition to provide better services than the other and the customer enjoys a multitude of services at very attractive rates. One of the primary reasons of setting up an online brokerage account is convenience. A lot of time, energy and certain amount of cost are saved when a person carried our intraday or delivery trading online. What would have otherwise been a service for which a person heavily relies on a stock or commodity trader is now become a popular trend amongst people, who are internet and share market savvy.

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There are, however, certain costs involved in setting up, maintaining, transacting in and eventually closing an online brokerage account. It is important you choose the right type of account based on the following parameters:

1. The fees charged by the company offering the account.

2. The reliability of the company in terms of security and information.

3. Ease of using the trading platform online – will you be able to manage the various icons, notifications and commands to make the right transactions?

4. How often you trade in commodities and/or stocks?

5. How well the website is maintained – it frequently downs or there are very rare instances in which the website was unavailable?

6. Finally, how securely are the website and the online brokerage accounts maintained?

When you have chosen a reliable brokerage account provider, use a brokerage calculator online to estimate approximately how much you will be paying as charges to use the account. Remember, the profits that you make from your transactions are the gross earnings. Only after you have deducted these charges can you arrive at your net and actual profit. It is also an important tool to be used in comparing brokerage companies.

Fees for delivery trading are generally and very slightly more than intraday trades. Some of the components that will be used to calculate the figure are:

1. Service tax on brokerage – this stands at approximately 10.36%. After applying a discount for education cess, it comes down to 10.30%.

2. Security Transaction Tax – this is about 0.025% of the selling amount only.

3. Stamp duty payable to the government – This stands at 0.002% for the total turnover you have in one business day.

4. Regulatory charges of 0/004% on the total turnover of the day.

5. The actual commission or brokerage charged by the company – this is usually between 0.03 – 0.05% on the buying and selling.

While the first 4 points are fixed, the last point can be a variable factor. Most companies, in order to maintain good business relations with their key players and to encourage people to trade more on a long and short-term basis, offer a discount on the brokerage if the volume of trade of a person or company is high.

You need not calculate each of the figures on your own. Thanks to the online calculator, you only have to enter the buying/selling value or the transactions you have made. It will calculate the turnover and/or the brokerage payable instantly.

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Benefits of online trading

Once upon a time the only way to trade stocks was through a stock broker. These specialists would take order, make suggestions, and then handle the entire gamut of the buying, as well as, the selling of stocks. With the evolution of internet, the profession of stock broker has taken a back seat. It is restricted to masses who intent on trading large volumes of stock. Either high network individuals or big corporate houses avail this form of services. The average person does not need the services of a stock broker as he can trade online. Especially for the casual traders, there are numerous benefits for getting into online shares trading.

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The first benefit of online trading is the cost. Brokers make their living with stocks and can bring along with them years of experience in trading along with the relevant business experience. All that can make them very effective, but it is costly. Often, it is observed that they charge a certain percentage of brokerage, which is the upfront fee, but where it pinches you is that some of them may ask for a percentage in your earnings. Other fees are also added to the exchange, which depends upon the stock broker. On the other side, online brokerage firms tend to charge flat rates for each transaction, which are extremely inexpensive by comparison.

The second benefit of online trading is that you have full control. This is one of the biggest plus, as regards some form of complaints, which have emerged is that the brokers hold control over most trading activities. They would often refuse to perform a transaction that is a poor investment. While this could save a client from potentially a bad investment, it also prevents them from taking a risk, which would have benefitted them enormously. Online trading removes the broker between the trader and the stocks if they want.

The third major benefit of online stock trading is you can make as many transactions you desire in a day. Normally, if you are trading with a broker, you need to adhere to their guidelines. This in a way prevents the casual traders to trade in whatever form of investments which they require.

The fourth major benefit of online stock trading is the urgency aspect. One is at the mercy of the stock broker, who has a plenty of things on his plate. This may lead to a situation where one is not able to make the transaction on time and the net result may monetary losses.

The stock market has come a long way from its primitive days. Now, with online trading, dealing in stocks has become pretty easy sitting in the comfort of your room. The greatest plus of online trading is that it takes away the control from the brokers and places the financial future in the hands of an individual.

So, resort to online trading at the earliest!

Tips for trading shares online the right way

Online shares trading are carried out by millions of people across the globe to make quick money out of their investments. For some, it has clicked superbly, but left most of them in a bad financial shape due to wrong investments. With some tips and suggestions, the individual can make it big in this domain.

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Effective tips to online shares trading

•Sticking to what is known: This is what experts suggest to people who are trading for some time. This way they are sure to come out ahead always. Their passions and interest can lead to know about an industry. By sticking to companies that is known much better and the industries that the person is interested in, changes can be foreseen more quickly.

•Not to follow tips: Tips should be taken from others, but it should not be allowed to rule the head. The individual should try to make his own decision and there are several reasons behind it. Firstly, the broker providing tip might have conflict of interest. He might provide a tip to buy a stock for which he can get more commission, irrespective of how the stock would perform. Secondly, if a tip is availed from others, who are not experts would only cause trouble by specifying the wrong stocks to invest in.

•Volume to indicate direction: Volume often tends to show direction and is specifically true for the small cap stocks having liquidity, but always not the case. Basically, when the stock moves upwards, it is accompanied by unusual volume increase, which displays that investors are aware of something and they are quite bullish.

•Using money management: For profiting from the moves in the stock market, it is very much important for the individual to work out as to how much money he is planning to risk. The best way is to plan scientifically. In this manner, it would be possible to develop own system and not to put in excess capital in any single trade.

•Stocks do not trend always: Few interesting points are there about stocks. Firstly, they do not trend always. As a matter of fact, some stocks do not trend at all. Each stock is said to have its very own personality, with some being defensive, some risk, some high growth and some speculative. Working on the stock personality would be a wonderful way for setting up the individual money management. The next point would be that stocks tend to move quite aggressively. This effectively means that the investment needs to be made at the perfect time for capturing maximum gains. Stocks jump frequently on open or do rally around 10 to 20% in a single day and do nothing for remaining part of the month or the year.

•Shorting stocks needs proper care: There are many stocks that lose money and several of them go to zero. But, back-testing does show that shorting stocks can be a tough thing to perform. There are no real methods, which would give out results better than that of break-even.

Why is online share trading your cup of tea?

Is there a reason why there is so much hype about the entire online shares trading going on in the market? Well, yes! This method helps you make money, lets you explore the financial market in the segment of your choice and lets you learn more about it. It is very safe if you use the platforms and advice given carefully, and for which, you can easily get plenty of advice from many skilled brokers!

Share trading has gone from more than just being a speculative way of probably increasing your stockpile of money to a serious business venture that has laid the foundation stone of a trillion dollar industry worldwide. India, with the 2nd largest population in the world, is, of course, a lucrative place for any kind of business to be carried. With recent political improvements, many countries are now keen to make business partnerships with us, which just makes the share market much, much wider. So are you ready to handle this on your own?

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Provided you have a lot of time to thoroughly research the market that you want to invest in and reasonably confident about making the right decision in an industry that keeps changing by the minute, you just may be lucky enough to open and maintain a share trading account on your own. For the rest of you, there are share brokers, who can show you the right way to achieve trading success. For example, if a company has decided to announce splitting of its shares and you already have a stake in it, does that mean you should be trading some of their shares or does that mean it is good news for you? A good share brokerage firm can explain to you what the concept means and also helps you decide if those shares are to be bought or exchanged for something else.

There is a plenty of research to be done in this field. If you have the time and the means of doing so, then that’s fine. But a broker’s job is to get the necessary information and present them to you in an easy format. In fact, you have certain online share brokerage accounts that remember your trading patterns and prompt you to make your decision if you want to continue to stick on the same path. And these accounts are no longer just about share trading, no sir! You can distribute and utilize your money in so many, many different ways using a reliable share broker’s share trading account.

So, whether you want to plan something for your retirement, investments in mutual funds, save for a rainy day or carry out banking transactions, you can go ahead and use these accounts for those purposes too. You just need to find a good broker, who offers these add-on services in their brokerage account. And there are so many of them easily available online today, so you save a lot of time in visiting their offices too.

Getting started with online trading

Share trading has grown in volume and monetary value by leaps and bounds in the recent years. There are so many solutions for people who do not have a lot of time to dedicate to stock trading, but have still managed to have a good run online while buying and selling company shares. There are many people who rely on the profits they get from such trading as regular income, thanks to good share trading brokers and good knowledge of the trade that they possess. So, are you interested in joining the hundreds of thousands of people who have already benefitted from online share trading in various stock exchanges like the BSE, NSE and the MCX? Then here are some share trading basics that you may find useful:

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  1. The place where the transaction takes place can be of two types – physical and virtual. Brokers feverishly conducting trades on the stock exchange floors carry out the physical share trading while brokers and direct clients who use online brokerage accounts or broker platforms to trade constitute the virtual traders’ crowd.

  2. You must open a savings and DEMAT account in order to carry out online share trading, even for the smallest value. Most leading banks offer DEMAT services so you can easily get this started.

  3. The shares that are being traded are actually bits of the company’s ownership changing hands. When you buy a share of a company, you are essentially becoming eligible to a share of the profits and earnings of the company, a part owner.

  4. The reasons why share prices change are many. Anything can lead to the change in price. For example, the recent spread of the life-threatening Ebola virus has got many leading financial institutions thinking how food and economy in the impacted regions will be affected and how that in turn will affect the food supply from those parts of Africa to other countries. Hence, the change in the prices of the companies in those regions may see a huge dip. Supply and demand affects share prices just as they affect all other products and service rates.

  5. You can buy, sell and swap shares, depending on how the market, the company and its shares are performing. Trades that are done within a day are known as intraday trades while long term trades can be done after a week, a fortnight, a month or even after many months, depending on how the client wishes to trade them.

  6. You must learn to read shares table or chart. Know which company is listed, how they are performing, what are the share prices and much more from just a glance of the dynamic shares’ tables that are maintained in all stock exchanges and can be found on many platforms too.

  7. For more detailed understanding of concepts such as bullish and bearish markets, splitting of shares, penny stocks, trading in commodities, etc., you can conduct your own research or simply hire one of the many reliable share brokers and get started.

Trading in shares is a vast concept that you will take a while to master, but with time, dedication, interest and the guidance of a qualified broker, you can trade in shares as easily as anybody else.

Start Trading Online Today without Any Hesitation

It is quite easy for anyone to jump into the world of Indian share market online trading. The availability of online trading has made it easier for everyone to participate in the share market. If you are interested in online trading and you are not sure how to go about it, just continue reading.

How to Start Online Trading

If you want to start online trading, there are only a few things you will need. You will need to create an account with one of the registered brokers who offer trading through online platforms. Examples of such brokers are ICICI Direct, HDFC, ShareKhan, Indiabulls, Tradewalla and many more national and local players. Legally, you will require a valid PAN card if you would like to participate in trading. Your chosen broker will ask you for a PAN number and address proof. Some of the banks provide you with seamless integration with the banking accounts. This makes it easier for depositing and withdrawing money between your trading account and the savings account. Before you register with an online trading company, you should ask about the commission and fees charged by them and also details of any minimum trade clauses applicable. If you are a beginner, it is more likely that you will be making low volume trades at least in the first few instances.

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Tips & Tricks

There are a few tips and tricks you should remember when engaging in trading.

  • Do your homework – Before starting to trade, you should know the market. Understand what the key phrases used in the trading world means. There are some simulator trading sites available, which will help you learn the procedures and terms of trading. Learn about the particular product or stock before you invest in it.

  • Invest surplus money – The money you invest in your trading account should be your surplus money. We recommend that money that has been marked for essential expenditure should not be used for trading.

  • Remember there is no formula to guarantee profit – Even if you are an expert in trading, there is still no sure shot way to guarantee profit. There are a lot of factors that go into deciding the course of the market. Do your research, but also be prepared to be flexible. Remember to adjust according to the current market scenario.

  • Discipline, discipline & discipline – There is no substitute to discipline in the trading world. Research, patience and discipline are like corner stones, especially in the world of day trading.

  • Use stop orders – Almost all trading platforms give you the option to set a stop price. If a stock is going in the opposite direction you planned, this will give you a chance to sell it before it goes way beyond your limit increasing your loss as it moves.

  • Do not fear losing – This does not mean you should be reckless, but scared investing does not usually bring in profits. Beginners usually are scared to invest because of the fear of losing. You should remember that not all trades will be profitable. Do your research and invest making sure you have stop orders in place.