In the past few years, India has witnessed a boom in the retail trading space. This information can be matched with the demat account opening numbers reported by brokerage firms. They have reported record breaking numbers. Additionally, technological advancement has acted as a catalyst. Therefore, the market share of retail investors has increased during the past few years.
Whenever a market, especially the stock market, sees a huge amount of growth in terms of participation within a very short span of time. It is considered a bubble. However, analysts like to believe the opposite of it and have discarded this theory. According to the research, more retail participation in the stock market is considered a bullish signal. Especially for emerging economies like India. Although, the uncertainty in the stock market cannot be ruled out completely. Therefore, it is very important for retail investors/traders to hedge their risk.
Moreover, during earlier times, Indian households never accepted day trading or stock market trading as a full-time profession. However, we are witnessing a change in that space. Positional trading or Day trading is becoming much more popular and we can see many households accepting it as a full-time profession.
How To Start an Online Trading Business?
If you are one of those who are looking for an answer to this question. Then you have come to the right space. Let us go ahead, and discuss some points that will help you in setting up your trading business.
You have to remember that online trading is considered a skill. It is not easy to learn or educate yourself on this topic. Potential traders need to
understand that stock trading requires a lot of knowledge and practice. Just by watching some videos, reading a book will not be enough. Instead, you will have to focus on gathering as much knowledge as you can. You will have to additionally work on the skill.
Traders also need to keep in mind, no business or profession is that easy. You still have to give time, do proper market research, and once you are confident enough then you invest in it. Also, you can try paper trading during the first few days/months. It will help you boost your confidence.
Go As Per Your Plan
Just like any other business, a trading business also requires a proper plan. If you wish to form a proper plan for your trading business, you can always refer to 24 rules that legendary trader W.D. Gann has mentioned in one of his books called ‘Tunnel thru the air or looking back from 1940’. It will help you form and strategize a proper trading plan.
Stick To Your Trading Structure
Lastly, this skill has various techniques such as scalping, breakout trading, pull-back trading, and many more that can be learned and applied. Trading techniques are something that you can try during your paper trading sessions and then choose one or two which you are comfortable with.
Now, you know how to go about your trading plan. Let us discuss how much money you will require in your trading account to start this business.
Ideally, there is no specific amount that is required to begin stock trading. The amount depends upon the risk-taking capacity of the trader. Some stocks are listed under Rs.10 on the Indian stock exchange and you can start by accumulating just one stock as well. Although, it is recommended to invest a smaller amount and focus more on learning. However, with time and experience, you can increase your trading capital.
These points will help you in starting your trading journey. Happy investing!