How do discount brokerage apps operate?
Discount brokerage apps are online platforms. They operate by providing trading services at reduced fees compared to traditional brokerages. Mostly, these trading apps:
- Offer commission-free trading or
- Charge lower commission rates per trade
Currently, these trading apps are very popular in India thanks to their:
- Lower costs
- Intuitive interfaces
- Minimal account management fees
However, they offer basic research tools and provide limited research and analysis tools compared to full-service brokers. That is because these apps focus primarily on execution efficiency and cost savings for the users.
How to trade effectively using the mobile trading app?
Trading using stock market applications is usually a simple process involving steps like setting up an account, putting in funds, and executing trades. Let us understand how you can trade effectively using these trading apps and optimise your trading outcomes:
- Familiarise yourself with the app's interface and features, including:
- Stay informed about market news and trends using the app’s real-time data and notifications
- Develop a clear trading plan and stick to it
- Try setting specific entry and exit points
- Make sure you are managing risk effectively
- Utilise stop-loss and take-profit orders to protect your investments
Additionally, continuous evaluation and adjustment of strategies is the key to effective trading using a stock trading app. By regularly reviewing your trades and learning from successes and mistakes, you can improve your trading skills over time.
Are you a beginner venturing into the stock market? Read our guide on day trading for beginners
What are the key characteristics of discount brokerage apps?
Discount brokerage apps are meant for self-directed investors looking for cost-effective trading solutions. These apps share several key characteristics that differentiate them from traditional brokerages. Let’s explore these characteristics:
- Discount brokerage apps offer lower commission fees per trade
- These apps use digital platforms and automation, which helps them minimise their overhead costs
- The savings are usually passed on to their users in the form of lower commissions
- Under some plans, they even allow commission-free trading for certain assets
- These apps prioritise user-friendly interfaces and provide seamless mobile experiences
- These stock applications provide basic research tools
- However, they lack the extensive advisory services of full-service brokerages
What are the advantages of utilising trading apps?
Investors gain several advantages by using trading apps in terms of:
- Convenience
- Accessibility
- Real-time information, and
- Cost-effectiveness
These apps not only enhance trading experiences but also help capitalise market opportunities faster. Let us look at some of their major advantages:
- Trading apps provide convenient access to financial markets anytime, anywhere, via mobile devices.
- These apps offer user-friendly interfaces and intuitive navigation. These features make trading accessible even to beginners.
- Majority of such apps offer:
- Real-time market data
- News updates
- Research tools
Differences between online trading and offline trading
Traders must note that both online trading and offline trading differ primarily in their:
- Mode of operation and
- Level of convenience they offer to investors
Online trading involves executing trades through internet-based platforms provided by brokerage firms. It offers instant access to:
- Financial markets
- Real-time data
- The ability to execute trades from anywhere with an internet connection
On the other hand, offline trading requires investors to place orders via:
- Phone calls or
- In-person visits to brokerage offices
It has been commonly observed that offline trading leads to missed market opportunities and higher costs. Thus, online trading comparatively provides greater convenience and trading efficiency.
Step-by-step guide to downloading trading apps
Downloading a trading app is a straightforward process. Let us now see how you can download a share market trading app and start share trading (this process may differ slightly based on the app):
Step I: Choose a reputable trading app
- Research and select a trading app
- Make sure it suits your:
- Investment needs and
- Trading preferences
Step II: Visit the app store
- Open the app store on your mobile device
- If you use an iOS device, visit the Apple App Store
- Otherwise, for Android devices, visit the Google Play Store
Step III: Search for the trading app
- Use the search function within the app store
- Find the trading app you have shortlisted
Step IV: Download/Install the app
- Once you have located the app, tap on the "Download" or "Install" button to begin the installation process
Step V: Open the app
Step VI: Sign up or log in
- Follow the on-screen instructions
- If you don't have an existing account, sign up for a new account
- Complete the sign-up process by filling in all the required information in the appropriate data fields
Step VII: Verify your identity
- Some trading apps require you to verify your identity before you can start trading
- Follow the app's instructions to complete the verification process
- It usually involves providing personal information and documentation (discussed ahead)
Step VIII: Fund your account
- Once your account is set up and verified, deposit funds into your trading account
Step IX: Start trading
- Now, you are ready to start trading
- To execute trades effectively, spend some time familiarising yourself with the trading app
- You can do so by exploring:
- The app's features
- Research tools
- The various trading options
Documents needed to open trading account app
Opening a trading account with a stock market app requires submitting several documents for Know Your Customer (KYC) verification. Most brokerage houses require these documents to:
- Comply with regulatory requirements and
- Ensure the security of the financial transactions
Let us look at the various documents you have to submit to open your trading account app:
Proof of identity (POI)
- You need to submit any of the following documents
- PAN card
- Aadhaar car
- Passport
- Voter ID card
- Driving licence
- A recent passport-size photograph
Proof of address (POA)
- You can submit any of these documents to verify your residential address:
- Passport
- Aadhaar card
- Voter ID
- Driving license
- Rent agreement
- Utility bills
Proof of income (for F&O trading activation)
- If you intend to trade in the Futures and Options (F&O) segment, you will need to provide proof of income.
- You can give any of the following documents as proof:
- Income Tax Returns (ITR)
- Bank account statements
- Salary slips
- Form 16
- Demat holding statement
Proof of bank account
- You need to provide a cancelled cheque or bank passbook with your name printed on it to verify your bank account details.
Once your KYC documents are approved, you can start trading using the Demat account app. Thanks to digitisation, the entire process is completed digitally in most cases in a few minutes. This provides enhanced convenience to traders, and they can start trading quickly.
Conclusion
Trading apps in India have changed the way people invest in stocks. With features like real-time data, simple interfaces, and learning tools, these apps cater to different users. Given the competition, identifying a top trading app is a comprehensive process. It usually involves thorough research into user reviews, ease of use, customer support, and comparing the brokerage fees charged.
When it comes to discount brokerage apps, they offer low-cost trading with minimal fees and basic tools. These trading apps prioritise efficiency and cost savings for users. Traders who use stock trading apps benefit from convenience, real-time information, and cost-effectiveness. This enhances their overall trading experience and helps them optimise their trading decisions.
