Stock Trading

Due to the digital revolution, the entire world has been connected with the help of the internet. Gone are the days when trading financial instruments on a trading platform needed the use of a broker, a desktop PC, or a laptop. Instead, today one can use a smartphone for accessing stock trading or other assets online. As a result, several individuals are dabbling in financial markets.

If you are new to trading or keen on trying out your luck in the stock market, here are a few things that could help you.

How can I get started with stock trading?

Easy as it seems, one cannot start trading in a stock market directly. Instead, you need to go through registered brokers or brokerage firms, using their stock trading platforms to initiate your trade.

• You must first open a trading account with a broker or a stock brokerage platform to begin trading. You “trade” or buy/sell orders in a trading account.
• The broker or the stock brokerage firm opens a Demat account and registers it under your name. This account allows you to “hold” the financial securities under your name.
• The trading platform and the Demat accounts are then linked with your bank account.

What do I need to open a brokerage account?

• Traders need to fill out an online form, which takes not more than 15-20 mins.
• Required documents include Date of birth, address evidence, proof of citizenship, and so forth.
• Once all the formalities are met, the details are verified, and then your account is ready for trading.

What Kind of Investor Are You?

There are various things to consider as you begin your investment. However, it all starts with deciding what type of investor you want to be. So, let’s look at what you need to determine as you start and how to spot distinct investments types.

Perhaps you’ve only had a savings account up until this point. But, on the other hand, savings and investments can be a good match. For example, when you examine the average stock market return over a long period, it becomes clear that it outperforms the typical savings invested. It could be one of the reasons for its acclaimed popularity among other investment options.

Before you begin investing, there are a few things to consider. First, it’s a good idea to decide how much risk you’re willing to take and what types of assets will help you achieve your investment goals. If you start investing younger, you’ll have a longer investment horizon. It also means that you’ll have more chances of recovering from any setbacks you incur while trading.

There are broadly two types of investors, “Active Investors” and the “Passive Investors.” Depending upon the style, you can identify where you fit in.

Active investment is sometimes known as trading or speculating. These investors keep their eye on the stock market, react to market movements, and possibly use more complex financial products like options and futures. The focus is usually on outperforming the market average in the short term. It takes a significant amount of knowledge and time. As a result, this investment approach is generally not ideal for new investors.

On the other hand, passive investment is more concerned with investing over a long period. To diversify risk in your investments, those investing in a passive style will choose less volatile and more diversified items. Losses in a single volatile stock can be counter-balanced against gains from other stocks. It is unnecessary to research regularly, and the market does not require constant monitoring. Trackers, which allow you to buy a basket of stocks in a single transaction, are one example of financial products that can help you with this. Returns are closely aligned with the market average if you distribute your investments this way. Such an investment style develops to be effortless, and as a result, it is popular among new investors.

How does the Stock Market work?

Whenever a company requires funds to expand its operations, they opt for crowdfunding. But this crowdfunding is secured and regulated by a governing authority. This strategy helps firms get the money they need from investors. So the company divides itself into shares (for example, 20 million shares) and sells a portion of those shares to the public (say, 5 million shares) for a set price (for example, $10 per share). It is known as a “Secondary Market” since the company is already established and requires funds for further expansion.

Primary Market is for the new entrant companies who wish to establish and grow their company. These stocks are also called Initial Public offerings or IPOs.

Significance of the Stock Market:

Stock markets allow companies to be publicly traded and raise capital. The transfer of funds and ownership occurs in a safe and secure setting.

People are encouraged to take up stock market investments. As a result, companies can extend their operations, grow their enterprises, and generate jobs in the economy by raising funds. Such investments are vital for economic development, prosperity, and trade.

Stock markets allow investors to earn a piece of the company’s profits (acknowledging that the assets carry an equivalent amount of risks and losses). Active investors and traders can easily buy and sell their shares across major stock exchanges due to enhanced liquidity.

It also provides traders with an additional source of income. Many individuals are motivated to participate in stock exchanges by reducing current spending and increasing savings. Individuals and industries alike benefit as a result of this. It gives savings and operating capital to businesses, allowing them to put their money to good use.

How to manage stock trading risks?

Risk and reward are intertwined and linked in the stock market. In general, the higher the risk, the higher the profit! Risk management, in financial terms, is the act of recognizing and assessing risk and establishing ways to manage and minimize it while optimizing profits.

There are generally two categories of risk in the financial markets: market risk and inflation risk. Market risk arises from the likelihood of financial markets increasing or decreasing in value. The rise and fall of prices of goods and services over time cause inflation, also known as the purchasing power risk.

In a stock market, some tactics help in lowering these risks. The following are the strategies:

• Follow the market trend: to mitigate risk in the stock market. It is advisable to follow the market trend. The only problem is that spotting market trends is quite a task, as these trends change quickly. Short-term trends can operate inside longer-term trends, and market trends can span a day, a month, or a year.
• Portfolio Diversification: You can embark on impactful risk management by diversifying your portfolio in the stock market. You distribute your money across various firms, industries, and asset classes in a portfolio. While the market value of one investment may fall, the market value of another may rise. Mutual funds can also help diversify risks.
• Stop Loss: Another approach is a stop-loss, also known as a trailing stop, which assures you minimize your losses if the stock depreciates excessively. In this approach, the investor can sell a stock if it falls below a predetermined threshold. Self-discipline is used for some trades to sell off the stocks when the price goes below a certain level or declines sharply.

What are the advantages of Stock Trading?

Stock market trading gives an attractive and lucrative financial asset to all. Even though the price of stocks may rise and fall daily, the stock market appreciates over a period. Investors often gain from investments in stable firms that are likely to expand. Similarly, diversifying your stock portfolio can help you build wealth by leveraging development in other parts of the economy resulting in a return even if some of your individual stocks lose value.

Some stocks continue to give dividends even if the company faces a hard time. It offers a passive income flow for all. However, please note that not all stocks give out dividends.

A stock market investment provides diversification for investors who venture money into various financial assets. Stock market investments are unaffected by other investment segments such as bonds and real estate. As a result, stocks can help you recover your money lost to other assets. Stocks also add risk to a portfolio while also providing the potential for significant, quick rewards, which can help investors avoid risk-averse or overly cautious investment strategies.

When you buy stock, you’re essentially buying a piece of the company. You get the advantage of being a part-owner of a company by investing in it. Shareholders have a say in who serves on a company’s board of directors and how certain business decisions are made. They also receive annual reports from the company to learn more about it. Buying stock in the firm where you work can be a great way to show your support while also tying your finances to the company’s success.

Types of trading

Scalping, day trading, swing trading, and position trading are the four basic forms of trading tactics. The duration and timeline of the trade determine different trading techniques.

Scalping: The shortest trading strategy is Scalping. Scalp traders only allow a small window of opportunity to make a profit which usually lasts for a few seconds or minutes. They make a profit through small price fluctuations during the intraday session. They trade in bulk, and as the price fluctuation goes on from cents to a few dollars, they book a massive amount of profits. The process continues till the end of the day.

Day Trading: Day trading may be suitable for those who do not want to retain positions overnight but are not comfortable with the rigors of scalp trading.

Unlike swing and position traders, day traders open and close their trades on the same day, avoiding the risk of large overnight swings. At the end of the day, they either make a profit or a loss on their trade. Because trades are often held for minutes or hours, ample time is required to research markets and monitor positions daily. As a result, day traders, like scalpers, rely on little gains over time to develop profits.

Swing Trading: Swing traders aim to make profits by holding on to the position for multiple days, if not weeks. Unlike day traders who constantly have to monitor the charts and market movement, Swing traders measure the market sentiments as a whole before booking a profit.

This method is quite popular with those who wish to have a passive income while having a full-time job or other obligations. However, these traders consistently devote a portion of their day to monitoring the market closely.

Methods employed by swing traders include Trend trading, counter-trend trading, momentum trading, and breakout trading. Some day traders also use these tactics.

Position Trading: Position traders hold on to the position for weeks, months, or years before booking a profit. The price of stock while selling is relatively high compared to the purchasing price. Therefore, position traders typically analyze and evaluate markets using weekly and monthly price charts, technical indicators, and fundamental analysis to find suitable entry and exit levels.

Position traders are not interested in little price swings or pullbacks like other traders. These traders are interested in massive price swings and thus focus on the major trend in the market.

What to consider when choosing a broker?

You should know your end financial goal before choosing a broker. Consider these questions to understand your investment goals: Do you intend to buy a few individual stocks? Are you looking for a means to put money aside for your future? Are you interested in learning about day trading or other advanced investment strategies such as options?

Once you have answered those questions, run through these crucial points before choosing the best online stock broker.

• Commission: Individual stocks, options, mutual funds, exchange-traded funds, and bonds are among the investment alternatives offered by most brokers. In some cases, access to cryptocurrency, futures trading, and foreign currency exchange markets will be available. Understand that each broker or a brokerage firm will charge different commissions on stocks, options, mutual funds, ETFs, cryptocurrencies, and bonds. So, based on your risk appetite, invest in those instruments which will yield profit, as per your investment or trading style.
• Reliability of the Broker or Brokerage Firm: A crucial aspect or issue while choosing a broker or a brokerage firm. Go through the reviews posted on the web. It will give you a brief idea of whether the broker is relatively new or has been in this financial business for a long duration. You can also check the review or the comment section that talks about the clients’ experience or testimony. There may be a few disgruntled clients, but take into account the overall perspective of the clients. It should also help raise a red flag if the broker or the brokerage firm is involved in any shady business. Remember, brokers operating online are a dime and a dozen, so chances of some engaged in some elaborate scam are always there. They should be regulated by the Security and Exchange Commission and carry a certificate that confirms it; they should also hold a membership of a self-regulatory organization such as the Financial Industry Regulatory Authority (FINRA).
• Account minimum: There are a lot of top-rated brokers that operate without any minimum account requirements. However, some brokers have a minimum initial investment requirement of $500 or more. In addition, many mutual funds have similar requirements, so opening up a brokerage account is not a problem, but investing in it may be troublesome.
• Account fees: Even though avoiding account fees is next to impossible; you can work to control them. For example, if you want to transfer your investments or cash out of your account, or if you want to close your account, most brokers will charge you a fee. However, if you’re switching brokers, the new firm may offer to reimburse your transfer expenses, at least up to a certain amount. Most additional fees can be avoided by simply picking a broker who does not charge them or declining to use optional services. However, annual fees, inactivity fees, trading platform subscriptions, and extra charges for research or data are all common fees that one needs to be aware of.
• Pricing and execution: Free trades are now frequent at brokerages, so the price isn’t as important as it once was, however, it is for active traders who want their trades executed at the best possible price — even if it’s just a few pennies cheaper. The controversial practice of paying for order flow, whether or not the brokerage charges it, and how much they charge for it could be dependent on which brokerage you choose. Tools, education, and features included in the package: If you’re new to investing, seek a brokerage that provides free instructional materials like live webinars, comprehensive how-to guides, video lessons, glossaries, and more. Also, if you are keen on learning more about advanced trading methods like options, see how well the broker helps its clients understand the risks connected with such strategies. It could include access to a customer service team that is available 24 hours a day, a live chat function, or clear instructions on how to use these financial products properly.
• Promotions: Online brokers, like many other businesses, frequently provide promotions to attract new customers, such as a cash incentive on specified deposit amounts. However, it’s not a good idea to pick a broker based entirely on its promotional offer — a large commission over time might easily wipe out any early bonus or savings — but if you’re torn between two possibilities, a promotion could help you decide.

Start trading stocks quickly and easily:

Many stock trading platforms are user-friendly. For example, charts and bar diagrams can be populated to get a visual cue for the stock market fluctuation. In addition, you have the liberty to contact the company that will guide and teach you the trading app.

You also can get in touch with the expert’s opinion and guidance. There are tons of videos available on social platforms. Trading has never been so easy; it is practically at the push of your fingertips. The trade confirmation takes place within a fraction of a second.

I already have a Demat Account. Is it possible for me to solely open a Trading account with you?

Yes, you may quickly start a trading account by linking your existing Demat account to Blockchain Tradein. However, we suggest that you register a new DEMAT account with Blockchain Tradein. This would allow you to have a paperless and seamless online investing experience. The disadvantage of having a separate account is that you must present us with a physical copy of the Delivery Instruction Slip(DIS) at our office every time you conduct a transaction. Therefore, starting a new one with us is more straightforward.

Is there a cap on how much money I can put into my trading account?

• Investment regulators in the UK, the land of regulations that Blockchain Tradein abides by, allow investors from any corner of the world to trade or invest without certain capital requirements of FDI. However, the only requirement for a minimum cap is in regards to public limited firms who ought to have a min capital of GBP50,000 with almost 25% of it reimbursed fully.
• Further to that, investors are free of any exchange controls or restrictions by currency regulations for the money incoming and outgoing in the UK. At the same time, every individual accessing the UK markets with cash or digital funds up to Euro 10,000 or beyond is expected to declare while initiating the trade.

What are the segments in which I can place offline trade?

With the investment market drifting online, there are fewer segments that still actively trade offline. To name a few, some off-market order options enable buying and selling of orders across cash/currency segments, margin trading, index options3, and index futures.

How can I check my trading reports and Demat transaction reports?

Similar to bank statements, investors and traders turn to their Demat accounts to read transactions and keep a track of their finances. Checking your trading reports is now easier than it’s ever been. One simply has to log into their investment platform and enter their Demat account number to pull up the required details. The Demat account generally displays two types of statements;

• Statement of Accounts that highlights all the transactions undertaken from the account.
• Statement of Holdings gives a quick view into the assets bought and sold by traders by displaying the current, free, locked, and pledged balance.

About Blockchain Tradein

We’re your best online stock trading option, where experienced wealth managers serve globally, with over 112 million users, 90 million active managements, 80 million assets under management, and 15 million monthly withdrawals. We’ve been published on every major financial website and magazine on the planet. We pledge to believe that everyone globally has the right to make a profitable investment and have their portfolio professionally managed. As a result, we give continuous support and a dedicated advisory team to our clients 24 hours a day, seven days a week.

We have a dedicated wealth managers team that will handle your investments and keep your portfolio updated with the current market while keeping you informed. As a result, we can confidently state that we are dedicated to providing you with the best wealth management experience possible. We currently serve clients across the globe and process large volumes of the portfolio at once, all of which happens super-quickly thanks to our incredibly powerful servers. Furthermore, our complete margin policy is one of the most important reasons our portfolio manager can maximize your returns in every industry while also monitoring your many accounts.

We believe the best way to continue to build trust is to be transparent to our clients. Any trading activity carried out in your portfolio by our manager will not be hidden from you. We make wealth management simple and secure.

Why Choose Us?

• We have an exceptional support team that will consistently look out for your investments and provide the best solutions by customizing your portfolio depending on the market environment. We have the best team that studies and analyzes the market.
• We offer trending stocks, cryptocurrency, or other investments to choose from depending upon your preference and enable trading under our expert guidance.
• As the best stock broker, we make your experience worthwhile whether you are investing or trading on our app. It is a user-friendly, robust and fast trading platform providing you with real-time data.
• We devote our time and money to improving and expanding the compatibility of our platform.
• We diligently conduct thorough research on your behalf to reduce your risks and maximize your gains, and we have experts on hand to assist you throughout your trading career. Practical trading tools are part of our services, and we use them to assist you in managing your portfolio and earnings as efficiently as possible.