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What is Online Trading & How to Start Trading Online?

Last Updated Date - Mar 21, 2023

In this Article, we will go through various ways to Start Trading Online. Along with this we will also dig into what is online trading, online trading vs offline trading, important features of Trading Online.

A Trading Account is basically an account which is held by a broker which in-turn enables the investors to deal in various securities. Trading Accounts are essential if an investor wants to deal in the stock market. An investor cannot deal in the stock market without holding a trading Account.

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    What is Online Trading & How to Start Trading Online?

    Online trading means that an investor deals with their securities using an online platform. The various securities which are dealt with in online trading involve equities, mutual funds and commodities also.

    How to Start Trading Online?

    First and foremost to trade online an investor needs to open a demat account including an online trading account. These accounts are usually opened with a broking firm online.

    Secondly before starting to trade online an investor should have a good knowledge about the share market with all its features. An investor should keep a check on financial news.

    Thirdly before actually starting to trade online, the investors should practice on an online similar so that later they do not make mistakes.

    Why an Online Trading Account needed?

    Start Trading OnlineTrading online is much better than doing it conventionally because with the advent of online trading investors are privy to a wealth of information about the different market trends, which stocks are performing the best.

    The investor with the use of online trading also has detailed information of all their transactions. Since the investor has all the information regarding all their transactions, they can plan much better and take better decisions for more profitable trading.

    With the advent of online trading, an investor has various other options like them being able to maintain separate accounts like retirement accounts, margin accounts, etc. Before going into the in-depth, the importance of having a trading account needs to be looked into.

    Importance of Holding an Online Trading Account

    1. Cost Effective: One of the benefits of holding an online trading account is that it is cost-effective. Since trading is done online and the middleman also known as the stockbrokers are eliminated the investors can save a lot of money.
    2. Better Decision Making: Since the trading account of the investors contain detailed information of all the transactions that the investors took part in then the investors can study their decisions and make better choices in the future.
    3. Having an online trading account also makes transactions which the investors take part in much more convenient. The convenience comes from the fact that the investors can deal with all their securities from anyplace and at any time according to their convenience.

    These are few of the benefits of opening a trading Account. The above discussion also illustrates why it is important to hold a trading account.

    Online Share Trading Tools & Platforms

    There are various platforms available whereby trading can be carried out. Some of the platforms include

    • Websites: The user can access their accounts related to online trading
    • Dealer Assisted trading whereby experienced dealers help investors in dealing with their securities.
    • Call and Trade

    Online Share Trading Tools include

    • Stock Watchlists
    • Research Reports
    • Sms

    How to Start Your Online Trading Portfolio

    Certain steps need to be kept in mind before an investor thinks of staring their online trading portfolio. The steps are as follows

    1. Firstly an investor needs to know how to choose a stockbroker who would include the investor doing a complete background check of the broker.
    2. Secondly, an investor needs to gain all the information regarding how to open a Trading Account.
    3. Thirdly they should know all the trading platforms.
    4. Lastly, they should start trading online by building their portfolio.

    Online Vs. Offline Share Trading

    Certain differences between dealing online and offline are as follows:-

    • There is a need of a stockbroker while dealing offline. Online does not require a stockbroker
    • It is more convenient to deal online as because it can be done through any device like the computer or the mobile. Offline trading involves the need of going to the stockbroker’s office which is inconvenient.
    • Online trading is profitable because the middleman is removed. Charges of the middleman cannot be removed in offline trading.

    Online Share Trading Tips for the Indian Share Market  

    Some of the trading tips for online stock trading are as follows

    • An investor while starting to deal with stocks online should start small
    • Investors should get used to the basics before dealing
    • Proper research needs to be done
    • Various Trading Tools should also be used

    Thus from the above discussion, it can be derived that it would be very profitable for an investor to start dealing with their securities online rather than offline which is why online trading accounts should be created.

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