How to choose an optimum brokerage firm ?

While trading a huge sum of money is to be paid as brokerage. Therefore traders must be very careful while choosing brokers for themselves. Primarily we have three types of stock brokers :
Discount Brokers : These are brokerage firms who facilitates you to carry out entire trading process in a hassle free manner. They provide you with all the required tools and research reports which you require to manage your portfolio. Discount Brokers offers services at lowest cost among these three brokers.

Premium Discount Brokers : Investment advise is offered by them along with all basic services that a brokerage firm provides. These brokers charge more then discount brokers.

Full Service Broker : These brokers offers one-to-one advise on investment and also trades on your behalf.They generally offer widest range of services among these three. The more service you choose more you pay.

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What is MIS, NRML and CNC order types in stock market ?

MIS (Margin Intraday Square Off) MIS order types are for intraday traders and need to squared off during the same trading day. It will be activated till that particular trading day only.The biggest advantage of this order type is that while buying shares using it traders need not to pay the entire amount only a margin amount is required to be paid.Because of this feature traders can buy more number of shares with less capital. If in case position is not squared off or converted into other order types by the traders end then it will be automatically squared off by RMS few minutes before the market closes. If you want to strictly trade on intraday basis then you can rely on usage of such order type. As here you need to worry about squaring off your position, it will automatically get squared off before market closes. NRML (Normal Order) NRML order type is used while trading in future market. It is used to carry forward trade orders in derivatives segment. This order type w...

What are the advantages and disadvantages of pair trading ?

Pair trading is a market neutral trading strategy which enables traders to make a profit under different market conditions.Without learning about the recent market trend a trader matches a long position with a short position in a pair of highly correlated shares, commodities, currencies or etfs. Usually, the pairing is done in shares of companies which belongs to the same industry. Demat account and trading account are required to trade using this strategy like in others. Advantages of pair trading are discussed below: No risk from market direction Direction risk means risk associated with movements in price because of change in market direction. For an example, a short position is exposed to the risk that stock prices may rise.In pair trading, no such risk exists. Because here profit depends on the difference in price changes of two stocks which are in the pair not in the direction in which they move. Limited risk and profit in different market conditions The co...

Tips to become a successful day trader

Indian share market has attracted various investors towards itself by its good performance and has become an attractive source of investment now. Returns earned on investment in shares by long term traders is higher than investment in other markets and assets. However high capital is required to trade on a long-term basis. Another way by which traders can trade with less capital and earn good returns is intraday trading. Day trading means not holding your position in stocks beyond the current trading day. To trade on intraday basis traders need to have Demat account and trading account. The risk associated with this type of trading is high. Some useful tips to become a successful day trader are discussed below: Trade by using a practical approach Movements in intraday stocks are based on the market fluctuations.To earn good profit here traders have to trade on the basis on present market movements.When the market is bullish instead of waiting for large movements...

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