Being a stock trader sounds glamorous. You can make money by buying and selling bits of global giants like Facebook, Tesla, or Amazon. Their successes translate into your profits, provided the strategy is right. Stock trading in 2021 is more accessible than one may think. In reality, almost anyone can join the global army of equity experts, which already includes millions.
In India, this is easier than ever. So, what do you need to begin? Stock trading has different dimensions. There are ways to benefit from the shares you own or speculate on equity prices alone. Here is everything you need to know to get started.
Prerequisites for Trading
If you are familiar with systems like Forex trading, mastering the stock exchange is much easier. After all, you will also buy low and sell high. Your starter kit depends on the trading method. You may begin with one type of asset and gradually add more options. The first dilemma is whether to pursue profits from stocks directly or indirectly.
The conventional view requires buying actual shares — i.e., a percentage of the issuing company. Investors hold on to their assets for months or even years, as they are content with regular dividends. Traders aim to buy and sell frequently, pocketing the difference between the buying and selling rates.
Another dimension is CFDs or contracts for difference. These virtual instruments enable speculation on the price without ownership of the underlying asset. Thus, you could profit from a surge in, say, Tesla’s share price, having no actual shares on hand. What matters is the value dynamics. Every CFD is your contract with the broker. The provider pays the difference between entry and exit if your trade succeeds.
Trading stocks begins by opening an account with a regulated brokerage. There are two types of access — demo and live. In the first case, you may work in a trading simulator to hone your skills for free. Live trading requires a deposit, and it immediately puts your capital at stake.
Account And Minimum Deposit
In India, stocks and stock CFDs are accessible through local and international brokers. The biggest names like Forextime have perceptible advantages. First, they are officially authorized by reputable monitoring entities like the FCA in the United Kingdom and the FSCA in South Africa. Secondly, they offer a broad range of accounts and instruments. Finally, entry is pleasantly affordable.
A demo is free and unlimited. Just submit a simple online form — access will be granted immediately. Working in the real market is a different ball game. To unlock it, you need to deposit $100 on average. For instance, the FXTM Stocks Account lets you start trading actual US shares with exactly $100. There are no commission fees or dealing charges.
Stock CFDs require the same initial investment. Fourteen options are accessible via The Standard FXTM Account. The derivatives may be traded on leverage, and you may also add currencies, spot metals, and other instruments to the mix.
Actual stocks and CFDs may be bought and sold digitally through systems like MetaTrader 5. These work on many popular OS — often, both desktop and mobile. The best platforms are packed with tools for fundamental and technical analysts. Their interface is well-designed to allow effortless switching between the latest news, economic calendars, price charts, time frames, etc.
Types of Trades
Execution can, but does not have to be immediate (this is termed ‘market order’). Triggers — Stop Loss and Take Profit — determine automatic closing parameters of ‘limit orders’. Once the price reaches the desired level, the position is closed, and you collect the profit.
The system gives you greater control over the exit. The triggers do not have to be static. Trailing Stop Loss is dynamic — it moves along with the share price. You may keep the asset as long as its price is rising. The system will automatically sell once it drops below a particular level.
Best Educational Sources
Picking the right stocks is the tricky part. Fortunately, there are a plethora of educational materials online. Your broker should be able to provide basic guidelines. To identify the most promising equity, you may utilize the fundamental, technical approach or both.
The first system focuses on corporate revenues, publicity, media analysis, etc. Alternatively, you may build your strategy around patterns. A set of indicators may highlight typical movements, allowing you to foretell the direction.
The pandemic has stimulated interest in remote tools. Millions of people log into trading platforms daily. Anyone can learn to profit from shares or derivatives. All you need is the right broker, determination, and a solid trading methodology.