Trading Capital

What is Trading Capital? 

Trading capital is the amount of money a Stock Trader uses for trading. In the era of online trading, the trading capital needed and the cost of trading have gone down significantly.

Many Stock Brokers allow you to deposit very small amounts of money to trade. In any case, you should never deposit more money to your trading account than you would be willing to lose in the worst case.

Proper money management will help you minimize the risk of losing your trading capital and maximize the chances to increase it.

How Much Trading Capital Is Enough?

The simple answer to this question is as much as they can afford. The reason for this is that the amount of trading capital directly affects the markets that they can trade, and most importantly, the amount of risk that their trading has to endure in order to be profitable.

most new traders have a limited amount of trading capital, which they usually find is not even close to the amount of trading capital that they actually need. However, by choosing their markets carefully, by being a very disciplined trader, and most importantly by managing their risk so that it is as low as possible, it is possible for a trader to take a small trading account and turn it into a large trading account.

Market Participants

Main Market Participants includes Traders, Brokers and Analysts. but many get confused between these individual participants. It should be noted that all the market participants have specific role in the Stock Market.

Who are Stock Traders? 

Persons who are involved in buying and selling of equity stocks. A stock Trader may be an Investor, Agent, Speculator, A stock investor is an individual or company who puts money to use by the purchase of equity securities, offering potential profitable returns, as interest, income, or appreciation in value (capital gains). At the center of stock trading is the stock trader, who executes the transactions that exchange currency into equity stock and vice verse. Based on duration of stock holding, the different types of stock trading can be classified as:

• Day Trader: It is a type of stock trading where both buying and selling of a financial instrument is done on the same day and all the tradings are closed before the market close for the day. Traders who participate in day trading are called active traders or day traders. Day trading demands fast decision and fast action. 

• Short Term Trading: A trade period of more than one day to a few weeks is considered as short term trade. A stock is bought and held in position from one day to a few weeks. 

• Medium Term Trading: A trade period from a few weeks to a few months is considered as medium term trade.

• Long Term Trading: In this type of stock trading, stock is held for many months to many years. Investment decision is made by fundamental analysis of a stock. Profit from growth of the company, dividends and bonuses attracts this type of stock trading.

Stock traders plays different roles -  

• A stock trader's client may put in an order to buy or sell, with the provision that the trader executes the order immediately upon receiving it. 

• In other cases, a stock trader are given the authority from his client to buy or sell stock at what the trader believes will be an optimal time according to him. Granting a stock trader this authority necessitates a high degree of trust in the stock trader's talent at timing a stock purchase. The idea is that a stock trader will do a better job of picking the appropriate time to buy the stock than would an amateur investor engaging in stock trading. So, new and inexperienced investors normally does trading through a Broker in order to reap greater benefits.

For an effective Analysis of Stock Market, there is prime need of absolute Real Time Data for Stock Market Traders as it drives most of the factors that decide the forecast of the Market Trend. One very good Real Time Data provider is www.rtdsdata.com who provides truly real time data feed for effective analysis. Quality, Price, Support, Data Accuracy & Integrity of Real time data should be looked after while judging the Data service Providers.

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Stock Brokers

Who are Stock Brokers?

A stockbroker is an individual / organization who are specially given license to participate in the securities market on behalf of clients. The stockbroker has the role of an agent. When the Stockbroker acts as agent for the buyers and sellers of securities, a commission is charged for this service. As an agent the stock broker is merely performing a service for the investor. This means that the broker will buy for the buyer and sell for the seller, each time making sure that the best price is obtained for the client. 

An investor should regard the stockbroker as one who provides valuable service and information to assist in making the correct investment decision. They are adequately qualified to provide answers to a number of questions that the investor might need answers to and to assist in participating in the regional market. 

A stock broker has access to the stock exchange where the trades are actually made, and has completed a registration process that gives the broker authority to operate on behalf of a brokerage's clientele. Two members of a stock exchange execute trades on behalf of clients. Brokers may trade exclusively for themselves, or they may broker trades for clients. Stock traders may work for a broker, unless they already have access to the stock exchange. There are a number of broking houses all over India. Many of them have International presence too. Following are some of the leading Stock Broking firms in India.

• India Infoline
• ICICI Direct
• Share Khan
• India Bulls
• HDFC
• Reliance Money
• Religare
• Angel Broking

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Stock Analysts

Who are Stock Analysts?

Stock Market Analysts are those people who analyzes the stock market from different positions. These people are responsible for careful analysis of all Stock Market aspects like price movement, volume movement etc. These people are very knowledgeable and highly experienced and have the ability to forecast Market Trend. 

Stock Analysts Role - 

• A stock analyst is aware of changes in industries, major companies. Sometimes an analyst may work full time, following developments in one particular industry or trend. Some stock Analysts are stock pickers for clients, and recommend which stocks to buy and sell. Others may also do the stock trading as well as providing analysis. Stock Analysts study the Market Trend and provide careful analysis

• Stock Analysts provide effective insight, factual research and may offer opinions on how a particular investment might be expected to perform. An analyst may target either short-term or long-term gains for his or her clients. Day traders often focus on daily analysis, with reports produced during the night while the stock trading markets are closed.

For an effective Analysis of Stock Market, there is prime need of absolute Real Time Data as it can drive most of the factors that decide the forecast of the Market Trend. One very good Real Time Data provider is www.rtdsdata.com who provides truly real time data feed for effective analysis. 

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