Online Trading for Beginners: Step By Step Guide | Espresso

Online Trading for Beginners: Step By Step Guide

In times such as these, when there is so much inflation, the traditional methods of saving money, such as Fixed Deposits, would likely be unable to fulfill your requirements and needs. You will undoubtedly fall short of money to achieve your financial goals. Nowadays, everyone knows how investing in the stock market can make you earn more money than the traditional ways. It gives you a lot of opportunities to create wealth and has the potential to generate enormous profits.

Published on 03 February 2023

Although, the share market has its share of ups and downs. It is a volatile market, so it is natural to see various ups and downs.

As a beginner in online trading, there are a few things you need to keep in mind. Before getting into that, it's important to know precisely what trading is.

What is online trading?

Trading is majorly buying and selling of shares in the market. The market where trading happens is the secondary market. The secondary market is where an individual can buy and sell shares issued in the primary market. There is a direct transaction between the buyer and the seller. The broker acts as a middleman or an intermediary between the buyer and seller in the secondary market. Also, remember that intraday trading is done daily, where you buy and sell shares on the same day.

Note: The primary market is the market where companies issue securities to the public in the form of IPOs- Initial Public offerings. This transaction is between issuers and buyers.

By investing money daily, you can earn a larger profit over a period of time.

You should start saving money as soon as possible and invest it in the stock market to increase your gains.

Earlier, traders had to go physically to trade, but now everything happens virtually, and all trading takes place electronically, even while sitting at home.

There are a few things to keep in mind before you start Online Trading for beginners.

  • Risk factor

You must know how much risk you are willing to take. You can invest in those stocks that serve your risk tolerance.

  • Investment goals

Determine your investment goal and how much of a risk you are willing to take. Since you're a beginner, you would want to increase the money in your account without having to think about generating income sources or vice versa. Make sure to know your goals well.

  • Broker

If you're beginning to trade, you should take the help of a broker. They will be able to guide you well, and once you know the drill, you can start trading yourself.

  • Diversify

Learn to diversify so that you avoid carrying the risk of letting all your investments suffer.

Guide to Trading Online for Beginners

There are things you must know before you start trading. Here's a 7 step guide on how to start Online Trading & start investing in stock market:

  • Open a trading account.

The first and foremost step is to open a Demat account or a brokerage account. Without this account, you won't be able to trade in the stock market. It works similarly to a bank account wherein you can hold your money. It can easily be opened online.

  • Understand the fundamentals.

You must understand how the prices of stocks move. The technicalities behind it will help you determine the right time and price when to enter/exit a trade.

  • Find a broker

Since you're a beginner, you should take the help of a broker and check the brokerage charges. The fees depend on a lot of factors, mainly on your trading volume.

  • Ways to prevent losses

It is crucial that you understand the ways to prevent heavy losses. Do not commit the same mistake twice. The stock market is known for its volatility, and you should know at what price to stop.

  • Expert Guidance

The stock market requires in-depth analysis and knowledge. Still, nobody can predict it accurately. But you can always take advice from experts as beginners to help you make the right choices.

  • Invest in safer stocks

You're a beginner in online trading; you would want to avoid taking any risk initially. It is advised that you invest in safer stocks, it might mean a slow start, but at least it will ensure the safety of your money.

  • Bid and Ask

The bid price is the maximum price at which the buyer is willing to buy a stock, and the ask price is the minimum price at which the seller wants to sell their stocks. To earn a profit and not incur any losses, it is crucial that you set the bid and ask price and decide accordingly. Better decide than be sorry.

Chandresh Khona
Team Espresso

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