Stock trading is you window to long term wealth creation and online trading gives you more power in your hands. But how do you start online trading. There are 3 basic things you need to know about trading on equity on the online platform. Let us understand in detail how to open an online trading account and how to do actual online trading.

How to open online trading account

It is just like opening your trading account with an equity broker. You have to fill up the form and sign at the appropriate places and submit all the required documents. There are 3 kinds of documents that are required. Firstly, PAN card issued by the Income Tax Department is a compulsory document. In case you do not have a PAN card you can apply for a PAN card and affix copy of Form 49 acknowledgement. Secondly, you require a proof of identity with your photograph as part of the document. It could be your passport, driving licence, Aadhar card etc. Thirdly, you are required to furnish proof of address. It can be your passport or your latest landline telephone bill, electricity bill, water bill etc. Once these documents are submitted the broker will verify the documents and open your trading account within 2-3 days.

Normally, a demat account is opened along with the trading account. SEBI has recently permitted clients to do online Aadhar based authentication to open a trading account. This is a fairly simple E-KYC process and just requires a few minutes of your time. Normally, brokers will also require you to either appear in person over the video conference or visit the nearest authorized point for in-person-verification (IPV). Once that is done, you are good to operate your trading account.

How to start actual online trading?

Once your trading account is opened, you are allotted a user name and a password. Normally, these are sent to your address by registered post. Nowadays, brokers are also allowing you to set password through registered email supported by mobile authentication using One Time Password (OTP). You are required to go through the following steps to actually start online trading on your account.

· Once your user name and password is received, you are first required to activate your trading account by logging in. The system will prompt you to change the password and also add an additional level of authentication.

· Once that is done, you are ready to trade. But before you start trading, you need to fund your account. There are different ways to fund the account. If your broker is offering you a 3-iin-1 account then you can directly transfer from the connected bank. If it is a 2-in-1 trading account then you can either transfer the funds via NEFT or you can use the payment gateway to transfer funds.

· Once the funds are transferred and the account is funded, you are ready to trade. You can place orders on the trading platform by defining the quantity and the price. Once the order is placed, you can check the status of the order in the order book in your online trading account. Once the order is executed (either fully or partially), the executed portion of the order is reflected in the Trade Book.

After you starting trading online, it is very essential to get comfortable with the online trading platform. There are 3 important steps that you need to take. Firstly, you can go through the complete online trading presentation or documentation that is provided by the broker so that you come to know about all the facilities offered. Secondly, don’t jump into large trades. Get your comfortable with smaller trades and gradually build up. Lastly, check that the movement of bank debits, trade execution and demat credits happens seamlessly.