Let’s understand the meaning of Demat account before deciding the best broker for you. Demat is an abbreviation of Dematerialised account, which means that the shares are stored in an electronic form rather than physical paper form. In simple terms it can also be thought of as an online safe for keeping your important documents.
Demat services in India are offered by the following Depositories only:
CDSL – Central Depository Services (I) Limited
NSDL – National Securities Depository Limited
Both the above mentioned depositories are licensed by SEBI. These depositories don’t directy deal with the customer, they in turn deal with brokers who become a part of the depository and are known as Depository participant (DP). Brokers are not empowered to hold you stock and they have to hold them in one of the depositories. This is the reason when you open a trading account with any broker, they will also open your demat account with either of the depository.
You would have to do a bit of research to find the Best Demat account in India as there are a lot of players in the market. Evaluating the right broker for you is a crucial part of your strategy. You should get proper information on all the relevant brokers and figure out the one that best suits your needs.
A trading account with a broker can help you perform the following actions while trading:
- Equity Intraday
- Equity Delivery,
- Stock options,
- Stock Futures,
- Currency options,
- Currency Futures,
- Debt instruments traded on exchanges,
- Commodity futures,
- Investments in Mutual funds,
Before investing in the market, the right strategy is to perform dummy trades in the beginning. Try to adopt a strategy and stick on it. Start with paper trading and make daily report of the profit and loss incurred while paper trading. When the results are greener than they are red that is the time when you indulge in real trades.
Trading with real money should start with less money so you can experiment in the beginning and also understand the trading platform. If trading intraday, proper stop losses should be maintained to avoid losses due to sudden new driven movement in the share market.
Once you start making profits with a consistent approach and gradually increase your investment to aim for better returns. In addition to short term investment also consider long term investment. Long term investments have the potential to grow multi-folds and they can multiple as good as 50 times in some cases. So along with short term trading strategy, you must also focus on long term goals. Small contributions made in the present can really uplift your future. Trading on an intraday basis can be dangerous so be very careful while trading. The market goes extremely volatile sometimes and people who are more optimistic than practical lose their hard earned money and crib about the market being a gamble zone. The market has endless opportunities for people with the right skills and they continue to profit from the market.