All you need to know about Indian stock markets and automated trading

Although it may seem pretty small in the world market as of now, but the Indian stock market is on am exponential growth curve. With the emergence of startups and other small and large businesses in the country, there has been a growth in the number of investors. In the present scenario, even the people belonging to the middle class are getting interested in the investment business, and this growth has been further augmented by the introduction of automated trading in the Indian stock markets. The growth has been so quick, in fact, that within a short span of time, 40% of all trades that happen on the National Stock Exchange (NSE) are being done with the help of automated trading by employing algo trading strategies. But before we delve deep into studying the Indian stock market, let us first understand what a stock is.

A stock is a kind of security that represents an ownership share in the company. When the companies are looking forward to accomplishing feats that require substantial capital, they go public and issue stock, and when they start making profits, the investors are rewarded with dividends. As an investor, however, your interest cannot be in just one company. Your sole purpose is to make money from money – this involves buying and selling stocks at the right time. While the experienced traders are pretty good at this, yet, as humans they’re prone to making mistakes – sometimes because of the greed of extra profit and sometimes because of the fear of incurring the loss. A computer program, however, doesn’t feel these emotions. It assesses the market conditions objectively and offers you the least risky path. This is why automated trading has become such a phenomenon in the Indian trade markets.

Talking about trading, if you want to start from scratch, you’d be required to open a trading-cum-demat account with a registered broker of BSE or NSE, and you’d also be required to link that account to your PAN CARD, Bank Account Number, a mobile number and email ID. Once you are done with these formalities, you’ll be eligible to trade on the stock market. This is when you should know about NSE and BSE.

NSE (National Stock Exchange) and BSE (Bombay Stock Exchange) are the two most important stock markets in the country. They facilitate a safe and controlled environment where you can conduct trades with minimal risks. They’re both regulated by SEBI (Securities and Exchange Board of India) which is an independent authority.

Roles and Responsibilities of NSE and BSE

1. To ensure that the exchanges have a level of transparency.

2. To increase the reach of the trading network.

3. To evaluate the stock prices.

4. To conduct transactions at high speeds.

5. To act as a barometer for the economy of the country.

6. To keep the investors safe and secure.

If you are new to the trading business, you shouldn’t plunge headfirst into uncharted waters, gives the stakes. Therefore, it is prudent to hire a broker, but when you do, you need to ensure that he isn’t charging you excess commission, he isn’t breaking the rules and most importantly, that he is a professional and not a self-proclaimed expert. 

Signing up with a company that helps out investors with automated trading could also be a great idea. This way, you’ll get to learn about trading in a safe environment and since the intraday trading strategies are totally governed by computers, you wouldn’t have to worry excessively about your money.