Basics of stock trading

The trader should first open a demat account and a trading account.The trading account is used to punch buy orders and sell orders.The DEMAT Account(Dematerialized account) is used to store your shares in electronic form.Individuals are not allowed to trade with the exchange directly.Only through stock broker an order can be placed in the stock exchange.Stock exchanges ensure the traders counter party risk by collecting a security deposit from the broker through which the trader punches orders.By this security if the trader fails to abide by the rules the penalty will be charged to his stock broker.Thus the stock broker ensures that his client does not create any conflict.The stock price is decided by the buyers and sellers in the stock market.The last traded stock price is the market price.In positional trading the trader holds the position for a long amount of time , say weeks or months. In intraday trading the buying and selling of a stock takes place within the day.