Basics of Online Trading

Trading online has become very popular in today’s time when you just need a trading account and after that you can trade comfortably while sitting at your home. Apart from comfort of trade it provides various facilities like:

• Ease of buying and selling of shares.
• Online receipt of contract notes/ trade statement for the transactions.
• Direct deposits of dividends/ bonus amount etc to account.
• Various trading tools for ease of making investment decision.

One click of mouse button is of ample importance while trading online because sometimes it is what that draws a line between your winning or loosing the game. Trading online is very interesting but you have to be a bit careful as well. The process of trading is very easy but making money is a bit tricky. All you need is a trading account and a little bit of caution to operate the same. Below are some do’s and don’ts while trading online:

Prices change at the blink of eye and the transactions are not always in real time. Moreover the speed of your internet might cause delay. So always make sure not to change your decision until the last moment. Take time examining the stock and make decision ahead of time so that you don’t loose while in panic.

An important feature of stock markets is volatility. So if you don’t keep a close eye on how your stocks move while placing an order, you might land up in losses.

Online trading is a matter of trust between you and your broker because there is no in-person contact. But you can’t leave everything on trust. Make sure your broker provides you detailed email statements and contract notes of executed trades.

Online trading provides facility to place limit orders. If you don’t have sufficient time to keep track of the stock prices, fix up a buy/sell price based on your judgement and go for limit orders. Moreover limit orders help you take ample advantage of volatile session during the day.

In addition to the brokerage rate being paid, prudent investor should always be well aware of the various Fees and commissions charged by the broker for various services offered like Mobile services, buy sell alerts, reporting, chart and other tools to facilitate easy trade as they really affect your net earnings.

For novice traders, it’s a suggestion to always trade with stop losses. Set your stop loss to level to avoid the risks associated.

Even though chances of default by a good brokerage firm are nil but a smart investor should always keep track of credit/debit of money in their bank accounts or transfer of shares to/from the demat account accordingly for each trade executed because technical reasons might lead to discrepancy which cannot be avoided.

Prevention is always better than cure. Security is another important factor for online traders. It is advisable always to follow security measures related to passwords and other personal information while login into the websites to eliminate chances of theft of identity and information.

Concept Behind Online Trading

Online trading concepts are an essential part of online trading, which became popular due to Internet and computers. Today it's a widely available and widely used way to earn money. Stock online trading, stock option online trading, forex online trading and currency online trading are the most popular ways to earn money online. It's also necessary to mention that investment analysts claim that stock option online trading and futures online trading are not for everyone because of their complexity, in other words these two types of online trading are meant for advanced traders.

To “trade” means to buy and to sell stocks, options, futures, forex, currency or any other financial products within various online trading markets. Understanding of online trading concepts means understanding of online trading psychology and operation principles of online markets. This knowledge is much more important and decisive in the context of online trading in comparison with techniques of buying and selling any financial product.

Online trading psychology lies in ability to experience losses comfortably. It means that losses are essential and inevitable part of online trading process as far as price is the only reality in online trading markets and markets in their turn are always right. What every trader should aim at in order to succeed is to manage both possible loss and risk.

One of the essential online trading concepts is planing. Don't associate online trading with gambling and avoid spontaneous and thoughtless decisions, because the results of unplanned online trading can turn out to be disastrous. Every time you are going to trade ask yourself a question if the trade you choose will be as profitable for you as possible. Do question yourself, everyone and everything whether a price will rise or fall. Don't forget about changeability of online trading markets and use any chance to pull out if the situation suddenly changes for the worse.

Speaking about online trading concepts it's necessary to consider the situations in which traders usually come to a decision to trade. First of all there is a need to find a trade, financial product, forex or currency which will be profitable and only then make investments. No doubt that putting money for example into promising and strong trade is more wise than investing weak trade but still many traders invest weak trades supposing that they will become profitable. In such cases you should remember that all your decisions should be reasonable and carefully thought out.

In order to manage your profits and shorten your losses, you should learn online trading all the time. Do create your online trading time frame and strategy, try it, analyse results of every trade, change and prove your online trading strategy and method.

In order to learn more about online trading, browse our site and read such articles as how online trading works, successful online trading and online trading tips.

Basic Terminology of Share Market

Stock: The stock or capital stock of a business entity represents the original capital paid into or invested in the business by its promoters. The "Stock" of a Business is divided into "Shares".

Share: A part of the company or enterprise issues to public or private to rise Money for various future plans, Holders of shares can sell their holdings to others through Stock exchanges.

Equity: The value of an ownership interest in property or "Business", Generic term for "Equity" securities are called stock.

Market: A place of a variety of different systems, institutions, procedures, social relations and infrastructures whereby persons trade, goods and services are exchanged. It is an arrangement that allows buyers and sellers to exchange things or services is called as "Market".

Multibagger: Among the long-term investors "Multibagger" is a popular term. A stock with strong fundamental values to show best performance in future to increase "Investor" wealth.

Investment: Investment is the commitment of "Capital" or "Money" to purchase financial instruments / assets to gain profitable returns in the form of income, interest, dividend, or appreciation of the value of the money. In equity terms can yield price appreciation, dividend, Bonus shares, Face value(par value) split, De-mergers or any value increase.

Trade: The exchange of goods, services, or both, In the words of "Finance" a deal between buyer and seller of financial instruments.

Derivatives: Meaning of "Derivatives" is a financial instrument, an agreement between two people or two parties. It is a financial contract with a value linked to the expected future price of the share or a currency, notable kinds of derivatives are "Futures and Options".

Economy: Financial activities related to the production and distribution of goods and services in a country or particular geographic region or entire network of producers, distributors, and consumers of goods and services in a local or national level.

Demat Account: In India, refers to a dematerialized account(Demat), For individual Indian citizens to trade in listed stocks.The Securities Exchange Board of India (SEBI) requires the investors to maintain a "Demat" Account. In a demat account shares and securities are held in electronic form instead of paper certificates. A Demat Account is opened by the investor while registering with an investment broker (Stock Broker) or sub broker.

Stockbroker: A regulated professional broker who buys and sells shares and other financial securities through market makers or Agency Firms on behalf of Investors and Traders. A broker may be works to a brokerage firm. Other words an agent charges a fee or commission for executing buy and sell orders submitted by an investor.

Brokerage: Definition of "Brokerage" gives different meanings, First one is A firm engaged in buying and selling of stocks for clients, The business or Office of a broker. Second one is Fee or Charge or Commission paid to broker. stock brokers charges a fee to act as intermediary between buyer and seller.

Intraday: Complete trade process of Buy and Sell or Sell and Buy within single trading day, It means square off the open positions before market close.

Swing Trading:  "Swing Trading" is purely non intraday based at the same time not for long-term, Purely short-term means more than one day to within some weeks and profit-book at Trend reversal. Swing trading is commonly considered as a speculative activity in financial markets including Forex, Stocks, Derivatives, Commodity, etc.

Why Technical Analysis Before Investing

Technical analysis is use to secure your investment for future prospective, before investing an investor should see these technical analysis. Technical analysis of company means forecasting the direction of price through an analysis of previous share price data, volume of that share, charts and resistance points. This analysis measures your return, how much dividend you will get.
Most of the company shares its analysis data with shareholders and a lot of financial institution (money rediff) and news channels. There are many companies which are listed in NSE (National Stock Exchange) and BSE (Bombay Stock Exchange). SEBI (Securities and Exchange Board of India) controls all companies which are listed in Share market.

Finally I would like to suggest you No Expert or analyst can provide you exact call on share. So analyze technical and fundamentals of company are more beneficial than a paid advice. Just try to your own research before investing.

How To Start Investment In Stock Market

While investing in stock market first of all I would like to suggest you just clear your stock market basics. Share market basics are the backbone of investing in stock. Everyone wants returns in his investment but there are some strategies by which you can get return quickly. Initially I would like to introduce you about stock market.

Share Market and Stock Market both are approximately same because stock is a business entity which represents capital of business and share is a part of that business entity. Stock Market is a place where anyone can invest, buy or sell, in listed companies according to their fundamentals. Fundamentals of a company is directly related to company financial growth (how that company invest in their projects) companies operations like sales, earnings, resources, products and future prospective.

For this stock market there are some terminals, like NSE (National Stock Exchange), BSE (Bombay Stock Exchange), in which you trade your share online or through a broker. Today a lot of companies offer online trading facilities like PNB, ICICI, SBI etc. For this online trading a person should have a demat account in any bank.

National Stock Exchange: "National Stock Exchange" of India (NSE) is India's largest Stock Exchange & World's third largest Stock Exchange in terms of transactions, for both equities and derivatives trading. The NSE's key index is the S&P CNX Nifty, known as the NSE NIFTY (National Stock Exchange Fifty), an index of fifty major stocks weighted by market capitalization. The "National Stock Exchange" of India was promoted by leading financial institutions at the behest of the Government of India; It was incorporated in November 1992 as a tax-paying company. In April 1993, it was recognized as a stock exchange under the Securities Contracts (Regulation) Act, 1956. NSE started operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital market (Equities) segment of the NSE commenced operations in November 1994, while operations in the Derivatives (Futures & Options) segment commenced in June 2000. The National Stock Exchange (NSE) located in Bombay.

Bombay Stock Exchange: The "Bombay Stock Exchange" (BSE) is the first stock exchange in Asia and largest number of listed companies in the world, with above 5000 companies in 2010. The "BSE SENSEX" (sensitive index), also called the "BSE 30", is a widely used market index in India and Asia. The Bombay Stock Exchange developed the BSE Sensex in 1986. The Bombay Stock Exchange switched to an electronic trading system in 1995. This automated, screen-based trading platform called BSE On-line trading (BOLT) currently has a capacity of 80 lakh orders per day. The BSE has also introduced the world's first centralized exchange-based internet trading system. In 1956, the BSE became the first stock exchange to be recognized by the Indian Government under the Securities Contracts Regulation Act. It is located at Dalal Street, Mumbai, India.