Steps to Start Trading with Demat Account
A demat account is like a digital locker where the shares are held in a dematerialized format. Instead of physical share certificates, a digital equivalent will be stored in the demat account. The stock broker would provide the trader/ individual investor with login credentials to buy and sell on the stock market. One can open demat account with any registered stock broker.
Trading in the stock market has gained tremendous momentum after the availability of smart, user-friendly trading platforms on the Internet.
People use them for logging into the online share trading platform and buying and selling stocks.
Linking a Demat Account with the online trading platform is mandatory.It is an account that stores the information about the stocks in a digitized format.
The demat account is linked with CDSL or NDSL which are two centralized depositary databases. It keeps the record of every transaction of buying and selling shares and keep the users updated.
It is not rocket science
Thanks to the online world, buying and selling stocks is a matter of a few clicks using the online platform. You need to follow a few steps to start trading with demat account.
- First, you need to open a trading account. Use the internet to search for the best one.
- Open a trading account. You have to fill in the form physically or electronically.
- Open a Demat account which is different from the trading account. Usually, the share broker opens the demat account with the central depositary on your behalf.
- You are supposed to complete the Know-Your-Customer or KYC process for both trading and demat account. It is mandatory as per the guidelines issued by the government.
- Understand the trading platform. You must understand the ins and outs of it even if you are not going to trade frequently.
Start trading online
Once everything is settled, you should start trading with a small amount. Practice both intraday and delivery trading so that you understand the nitty-gritty of it.
There is always a risk in stock-market trading. Therefore, you must know the basics of it.
Experts say that practical learning is the best way. It makes the understanding permanent.
Hence, develop your understanding about the market by experimenting. Don’t bother about the profit or loss. Set small goals and then proceed.
Try to capture the high-tides and low-tides. Buy the stocks when the market is low and buy when it is high. It is a tricky thing indeed, but not impossible.
Read the theoretical concepts
The technical terms such as average, pattern or trend, oscillation and so on are important in the stock trading.
One has to read and grasp the concepts. It is very much helpful in trading and making informed decisions.
Most of the trading accounts provide reports and trend analysis. They help in making profits.