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An Easy-to-Read Complete Guide to Equities
Trading for Beginners
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Description

• Equity is an asset class. Just the way you open a
  fixed deposit with the bank or visit a jeweller
  to buy gold, you trade in equities in the stock
  market. Here are the equity trading basics if you
  are starting your journey as an equity investor.

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What is Equity Trading?

• Equities are company shares you can buy or sell
  on the Bombay Stock Exchange (BSE) and National
  Stock Exchange (NSE). This is called equity
  trading.

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Why Should You do Equity Trading?

• The main aim of any equity trader is to buy at
  lesser prices and sell at a higher price to earn
  profits. Some benefits are listed here
• Better Returns The equity market investment
  usually gives higher returns than other markets
  in the long term and during inflation. Hence,
  they are popular among investors looking for
  growth funds.
• Diversification Equities are an intelligent way
  to diversify your investment portfolio and
  maximize risk-return tradeoff.
• Dividends Some companies also distribute their
  profits in the form of dividend income to their
  shareholders. This is an additional, unexpected
  income source for equity traders.

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• Bonus Shares Some companies even offer bonus
  (free) shares instead of dividends.
• Right Shares Companies issue rights shares for
  capital expansion or other business needs. You
  can also get the priority privilege of buying
  right shares at a lower price before they are
  opened for the public at a higher price.
• High Liquidity You also get high liquidity in
  equity as compared to other financial instruments
  in the market. A majority of equity stocks do not
  have a lock-in period.

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How to Do Equity Trading?

• You need to open a Demat account for equity
  trading. You can then start buying and selling
  stocks online in the dematerialized form or
  electronic format. Please note that you have to
  contact a registered stockbroker to open a Demat
  account. You also need an online broker platform
  to view all the stocks and buy or sell as per
  your requirement. The claim and settlement cycle
  is usually T2 days and runs like a well-oiled
  machine.

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What Things do You Need to Bear in Mind While
Trading in Equity?

• While the Securities and Exchange Board of India
  (SEBI) governs equity trading and stock markets,
  they are vulnerable to market volatility. Hence,
  you must have sound knowledge of the stock
  markets. It would also help stay updated with the
  latest industry news and other factors that
  influence the stocks. Or else, you might incur
  losses.
• It is also a good idea to pay attention to market
  sentiments and avoid following the herd
  mentality. Do your research and talk to stock
  market experts before you take any decision to
  buy or sell.
• As a beginner, it is always recommended to
  connect with an equity investment advisory firm.
  An advisory firm can understand your investment
  objectives, risk appetite and budget, and provide
  the necessary advice. It can guide on what and
  when to buy or sell. It can professionally manage
  your equity portfolio.
• Lastly, remember that you should always do equity
  trading with a long-term horizon to reap the
  maximum benefits.

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THANK YOU !

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