Requirements of Stock Market Trader or Investor

Hello Friends Welcome you all hope you all are safe.

Today I would be writing a Blog on Basic Requirement for Stock Market Trader or Investor, so without wasting much time Let’s begin.

What can be Basic Requirements for Stock Market Trader or Investor?

Well I have divided this section in Two Parts which are Primary Requirements and Secondary Requirements, Lets Discuss them in detail.

Primary Requirements:

1) Bank Account:

This is a very basic requirement in today’s generation without which we can’t it is impossible to live, I am assuming that most of the to be Passionate Traders/Investors would be having his/her Bank Account, with Internet Banking or at least UPI access for transactions purpose.

2) Trading Account & Demat Account:

Trading Account:

Trading Account is very important aspect, Trading Account is provided by various Brokers like Zerodha, Fyers, Alice Blue, Astha Trade, Motilal Oswal, Share Khan, ICICI Securities, HDFC Securities, etc. Choosing this becomes important because at initial Stages of our trading Career or Investing Career it is necessary to choose Right Broker with Best Features at Right Time.

During initial stages of our Trading/Investing Career “Each and Every PAISA/CENT Saved is Our Capital”. I will Repeat Again “Each and Every Paisa/Cent Saved is Our Capital”.

Coming back to our topic, Trading Account is our backbone from which we initiate our BUY/SELL Transactions be it Shares, Futures or Options, each and every transaction done in Stock Exchange is initiated from our Trading Account.

As mentioned above Trading account is provided by Brokers, now lets have in depth discussion about brokers,

There are two types of Broker in India:

a) Full Service Brokers

b) Discount Brokers

a) Full Service Brokers:

A Full Service Broker is a broker firm wherein they provide variety of services to its clients, like Research & Advice, Tax Tips, Etc. But for all these Services which they provide they Charge some amount which is in Form of Brokerage for each and every transaction.

Here are some of examples of Full Service Brokers:

i) Motilal Oswal

ii) Share Khan

iii) ICICI Securities

iv) HDFC Securities.

If you need Full Service you can Opt for one of the brokers from above. Now Lets move on to Discount Broker and have look what they have on offer.

b) Discount Brokers:

A Discount Broker is a Stock Broker who does not provide any service to their client with respect to Research & Analysis, Tax Tips, etc which are provided Full Service Brokers, thereby they tend to provide Low Brokerage Service to their Clients.

Here are Few Examples of Discount Brokers:

i) Zerodha

ii) Fyers

iii) 5 Paisa

Now Question Arises Which one is the Best Broker? A Discount Broker? or A Full Service Broker?

Well both Discount Broker and Full Service Broker have their own Plus point which may differ from person to person.

If a Long Term Investor want free tips from his broker’s advisory and don’t want to do much Study on Market then for him Full Service Broker would be a Optimal choice.

If a Trader/Short Term Trader/Swing Trader who regularly trades or is willing to Trade in Stock Market for them Discount Broker is an best option, as mentioned earlier “Each and Every Paisa/Cent Saved is Our Capital”.

My Experience with Full Service Broker is like, Firstly I have chosen to become a Swing Trader, I knew nothing about Brokerage and all, So I started my trading, Once I studied Dabur India on charts My Buy Price price was 465 and Target was 478 with Stop Loss of 460. I Entered the Trade with small Quantity, when on next day I saw my Trade log, net effective price was Rs. 471 😑, ultimately My target was achieved and I exited at Rs. 478 after few days, but Net Sell Price was Rs. 470 Incl Brokerage. I gained only Confidence in that trade, whereas if I would have been traded with one of the Discount Brokers then I could have Gained confidence as well as Profit😁, but that does not matter a much because if that would not have happened, then I would not have been sharing this Experience with you all.

Demat Account:

A Demat account is an Account wherein your Shares, Mutual Funds and Securities are stored in Dematerialised formed. When you open an trading account with broker you have an option for opening a Demat account with it.

Now question is that Who should open Demat Account with Trading Account? and Who should Not?

Well the answer is the Traders who are Trading in Intraday or in Futures and Options, for them opening a Demat Account is not Necessary, but for Investors and Positional Trader who buys a particular share and keep that position for some number of days, for them opening a Demat Account is compulsory, because without Demat Account you cannot take Delivery of Shares.

Well this is all from Basic primary requirements for Stock Market Trader or Investor, Now you all will be confused where to open an Trading cum Demat Account, So I am giving here is purely my Recommendation whether to follow or not to follow it will be your decision.

In my Two to Two and Half year Career of trading I have used many brokers like Phillip Capital, Motilal Oswal, Fyers and Zerodha, of which if you want to Choose I will recommend for Full Service Broker Motilal Oswal is best, then for Discount Broker I will recommend here two broker, One broker for your Trading purpose and Second one for Charting purpose, Here Zerodha will be your basic broker and For Study purpose you can open Trading Account (only) with Fyers, one of the main reason recommending Fyers is because of their Web based Charts, they are Simply awesome to study your Technical Analysis.

Here are referral Links for above broker you can directly open an account through it, opening an account through my Referral Link would help me to get some credit points and keep motivating me to help you all through my blog via posting basic articles.

Referral Links for Opening an Account:

1) Zerodha: For Opening an Account Click Here

2) Fyers: For Opening an Account Click Here

If you do not want to open an account through my Referral links then you can simply go to www.zerodha.com and www.fyers.in

Well that’s all in Primary Requirements Section, Now lets move on to Secondary Requirements Section.

Secondary Requirement:

Secondary Requirements are optional for Investors but a necessity for an Intraday Trader and who is willing to learn Technical Analysis in deep. These Secondary requirements are very basic, but some may have and some may not. So Secondary Basic Requirements are:

1) A Laptop/Personal Computer:

I have listed this under secondary requirement because for long term investors Studying charts on mobile is favorable and who takes trades Once or Twice a week this requirement is not Basic necessity for them, but for those who trade regularly and specially willing to do Intraday Trades this is a Necessity, because without charts, trading becomes very very very difficult.

2) A Reliable Internet Connection:

This is very much important because once you are into a trade, then without Reliable Internet Connection you are helpless. Just Imagine you are into intraday trade and you were going to exit based on chart, if at all it reaches you target price and your net connection is down then what feeling you might be going through? To avoid this having a Reliable Internet Connection is a Must.

3) Stand-By Internet Connection:

This is as important as anything else, having standby internet connection is also must. because the reason is, I will take same situation as above, whenever you are into a trade and your internet Connection fails, just imaging what would happen? you cannot do anything right? For same reason we should have a Standby Internet Connection, it can be a Jio-fi or Airtel Hotspot which could be your savior in bad times. Comparing with our Trade, we keep our Stop Losses for Contingencies so for the same we should have Standby Internet Connection, we know at any point at any time any Reliable Internet Connection can also fail. So we should be Ready for Each and Every Contingency

So that’s all for today Friends, Traders and Investors, hope you all have like my blog. Do Comment you views, Share to various Social Media Channels and do Subscribe to my blog for more informative articles.

I will be soon coming up with more articles.

So Stay Tuned!!!!!

If you have directly landed on this page do check out my other informative sections of blog below:

Note:

Stop Loss should be on closing basis. For Example after Buying Whirlpool for 2140 and at end of the Day/Week/Month based on Chart Time Frame, if it is Closes Below 2091 then you can confirm that our Stop Loss has been triggered.

PLEASE FOLLOW STOP LOSS STRICTLY TO PRESERVE YOUR CAPITAL

Please read Disclaimer before Investing.

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Have a Great Time ahead!!

Delta Trader