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Key to Finding Great Stocks: How To Use Buyer Demand Rating?

By Marketsmith India “For the best prospects, do a price and volume check of each week within the stock’s base to help you conclude if the stock is showing sound accumulation or too many price and vol...
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Share Market Basics: How to Track Market Weakness in a Confirmed Uptrend ?

We all know the importance of market status in determining an investor’s stance in the CANSLIM system. It not only helps you realize gains by being aggressive when the risk is minimal, but also protec...
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What Is Technical Analysis?

Technical Analysis is the practice of anticipating price changes of a financial instrument {like shares} or the market as a whole by analyzing prior price changes and looking for patterns and relation...
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Chart Pattern: How to Spot a Bullish Base-on-Base?

With the stock market turning volatile this year, many stocks have formed  base-on-base  patterns. Keep an eye out for those, because they tend to be strong chart formations. The base-on-base is, of c...
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Busting the Investing Myth that Penny Stocks Can Lead to Marvellous Riches

MarketSmith India has been highlighting some investing myths that need to be debunked in our webinars and learning articles. These include the idea of buying a stock with its price on the way down so ...
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Partnership firm VS One Person Company: Detailed Analysis

A Partnership firm is an establishment or an institution, which is usually established by two individuals who are known as partners. The firm follows provisions and guidelines mentioned in the Indian ...
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What is meant by Demat Account?

 

Demat account is the account that is necessary for all the investors or the traders before they start there trading or investing in the stock market.

Through this article, you will get to know about the definition and the importance of the demat account.

 

Let’s start with the definition:

What is Demat Account?

Demat account is an account in which the individual who are investing or trading in the stock market used to hold the shares and the securities as this is an electronic platform to hold the shares or securities.

The full form of demat account is a dematerialized account.

The main purpose of opening the demat account is to hold shares that have been bought for making share trading and investing easy for the users using the online facility for trading.

In India, you can get all the depositories services and facilities by the National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) with the help of the stock brokers, intermediaries or depository participant.

The charges of Demat account will vary as per the volume held in the account, terms and conditions laid by the depository and the stock broker.

This account provides the facility to hold the shares and securities in an electronic format.

A demat account holds all the investments and securities that an individual makes in the shares, government bonds, exchange traded funds, mutual fund and many more types in one place.

So, this was the discussion about the demat account.

Also Check: How to Open a Demat Account?

Now, we will talk about the dematerialization as it is the full form of demat account.

Dematerialization is the process in which it is used for converting the physical share certificates into the electronic form.

Any trader or investor who want to do the trading or the investing part in online need open a demat need with the depository participant or can also approach the stock brokerage firms that are available widely in India.

 

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How Does Indian Share Market Works: A Beginner's Guide

From company perspective, company raises money through stock exchange. Who will give the money in exchange of share of the company? Here comes the investor. People who want to raise their wealth inves...
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How to become a successful trader in the stock market in India

Trading in simple language it is to buy or sell goods & services in short term duration to earn the profit. In terms of stock market in India purchasing and selling of shares based on technical evaluation or market trend for short term duration for making money is called trading.

The dissimilarity between investor and trader is investors invest money for the long term and wait for the bull run to make benefit while trader make gain even in bad market circumstance sounds interesting. The trader can make more money than investor hence many people try this trick to make more money but fails. Trading is a mind game. This game is not for faint-hearted. To become a successful trader safely, they must take care of several things. 

When anyone wants to trade, they use a broker who will execute the trade on the market. The broker they opt for is an essential investment decision. India presently has around 70 brokers to option between. However, there are numerous top global brokers they can turn to. 

Criteria to choose broker for trading in stock market in India

  • Speed of execution – Due to the high number of trades they might make in a day, the speed of execution should play a factor. The stock markets are highly volatile, a very little delay in the speed of execution of your trader can lead to variance in price of the stock and thus impact your strategy.
    A broker has multiple clients, placing different orders at the same time. This can seriously create a situation of delay in the execution. Therefore, team size and speed of execution plays a very important role while choosing the broker. 
  • Costs – The lower the fees and commission rates, the more profit they take home, and many will reduce their commission the more they trade. The commission rates may look very small, but at the end of billing cycle the amounts are usually huge.
    If you are a long-term investor who is simply going to create a portfolio and wait for months or years, this might not be important for you. But for active intraday traders who place several orders every day, the brokerage charges pay a key role. The profits they make everyday should be at least higher than the brokerage charged on that trade. A lower brokerage charge will eventually lead to higher earnings.

  • Regulatory compliance – Make sure that the broker is regulated. They'll be legally obliged to protect their financial interests. As per the Securities and Exchange Board of India (SEBI) all the brokers and advisors necessarily need to be certified by SEBI.

    You should check the registration status of your broker, and check whether they are members to the different exchanges for India or not. Later if you wish to trade in multiple segments or exchanges, this is going to help you.

  • Spreads – As a day trader they have to demand competitive spreads. Find brokers with tight spreads and their bank balance will thank them for it.

 

What Can Be Traded in stock market in India 

  • Forex – The foreign exchange currency market is the most popular and liquid globally. It is legal in India and you can trade in various international currencies including the US dollar, Euro etc.

  • Stocks – Physical stocks in individual companies, regular and Leveraged ETFs (an “Exchange Traded Fund” holds multiple stocks or commodities and is traded like a single stock), futures, and stock options. They can buy and sell in the shares of the ICICI Bank, for example, India's largest privately-owned financial institution. This is often referred to as the equity market.
  • Binary Options – The easiest and most predictable technique, as the timing and return on a successful trade are known in advance. These are usually the derivatives of a listed equity stock.

  • Future: -The future price of a commodity or security fall under the futures segment. These are also derived from a listed equity stock and are amongst the most preferred segment as an alternative to the equity market.

  • Commodities – Oil and natural gas, foodstuffs, metals, and minerals etc. are traded under this category. Some of the highest trading commodities including precious metals like gold, silver, crude oil etc.

If they need to branch out from the National Stock Exchange of India and the Bombay Stock Exchange, they can trade in other global markets. If they are S&P 500 day trading, for example, they will be buying and selling the shares of companies, such as Starbucks and Adobe.

In the day trading forex market, they will be trading currencies, such as Indian Rupees, US Dollars, Euros, and GBP. In the futures market, often based on commodities and indexes, they can trade anything from gold to cocoa.

Index funds rapidly occur in financial advice these days but are slow financial vehicles that make them unfavorable for daily trades. These are usually preferred for long-term investment plans.

Another growing part of the interest in the day trading world is a digital currency. Equity trading with Bitcoin, LiteCoin, Ethereum, and other altcoins currencies is a widening business. With lots of volatility, able eye-popping returns, and an unpredictable future, day trading in the cryptocurrency could be an exciting avenue to pursue.

Day Trading Strategies in stock market in India

Traders will employ day trading strategies in forex, grain futures and anything else they’re trading in, to give them an edge over the market. Day trading using the Gann method is particularly famous in India, for example. It’s while that tiny edge that is all that separates successful day traders from losers.

There are several day trading methods out there, but all will rely on accurate data, carefully laid out in charts, tables, and spreadsheets. Options include:

  • Swing trading
  • Scalping
  • Trading zones
  • Trading on volume
  • Arbitrage trading
  • A simple day trading exit strategy
  • Utilizing news

It is those who stick religiously to their trading strategies rules and parameters that often seize a slice of the 3 crores daily turnover in the Indian National Stock Exchange.

Trading in any of the market segment has a high risk associated with it and therefore it is very important to know the amount of risk that you can bear in the market. These is usually done by getting your risk profile analysis before entering the market or planning any investment. Your broker or a certified investment advisor can help you calculate your risk profile analysis. The Risk Profile Analysis usually varies with several factors including your income, liabilities and your age. Therefore, you should keep your risk profile updated.

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Introduction of Indian Share Market

When it comes to trading in the share market, it's necessary to know how to learn the principles of stock market analysis so you can select which share to purchase or sell for your portfolio, such as ...
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Understanding the stock market for beginners

Understanding the stock market for beginners This blog you are reading is a product of 20 years’ experience as a trader explaining all of the stock market. In stock market if you want to be successful...
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Share Market Tips!!! Be Aware!!!

Are you into share market trading? Do you want 3 tips to carry out successful share market trading? So you have to pay only if the tips provided are successful and you make a profit out of it. Do you ...
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