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Not everyone makes big profits though profits are made daily. The reasons for this may be manifold such as improper use of trading platform, bad calculation, or worse, use of the wrong broker for your trade. Online stock trading is not everybody’s cup of tea. But, one thing everyone can and should get right is their choice of broker to do the trading.
Types of Brokers
First, for those who are just beginning on their journey in stock trading, broadly speaking, there are two types of brokers. The traditional broker, who offers regular service and trading account, offers personalized plans, and offers advice on investments and helps with research. These brokers are known as full service brokers. Many traders consider them the best brokers for trading.
The next type of broker is the discount brokers. They take reduced commission compared to the full service brokers. The flat fee they charge is often in the range of Rs 20 to Rs 50. Due to this, many traders prefer to use discount brokers. Choose the best discount broker in India to get the best trading platform and services.
Types of Brokerage Accounts
You need a brokerage account to start trading. There are three types of brokerage accounts you can use. One is the cash account where you must pay in full before the settlement date to go ahead with the transaction. You own all the money and securities in the account and your name is used for the account.
The second is the margin account where the user borrows money from the broker-dealer. Due to this, the user gets a big leverage on the transactions. That means the user is able to buy double of what he could have in the normal course. But, before the account is activated he must sign a hypothecation agreement. All the risks involved must be documented by the broker and the client (the user) must be informed of this. The minimum invested amount in the margin account must be $2000 and so the day trader must have at least $2000 in his margin account all the time.
Next, we have the option account. This is a margin account approved for trading on the CBOE. For this, the broker must determine that there is enough equity in the account and that the client has enough net worth and that the client is talented enough to make a profitable investment. Here the risk disclosure statement is more detailed than in the previous case.
Search and Find
When you need the best discount broker in India you must search for them according to the customer review and reports that you can see online. Or, skim through the trading magazine and check the ones that appear often on the pages. The quality of your trade will depend on whether you get a good broker or not.
There are some specific periods when the trade will boom for the online trader. The way to choose this time will depend a lot on luck and on the trading house you are with. They will tell the best times and if you go with those times, you will get plum deals.