No one is a born investor/trader, neither was Warren Buffett. Choosing the right broker in India is a decision most of the first time investors/traders get confused about and end up making wrong choices.
For a new investor/trader, this task might not be a cake walk, and so it becomes highly important to know what type of a trader you are first.
So to say, there are several types of traders and investors who participate differently in the markets. Different types of traders can broadly be segmented as – active traders and passive traders.
If You Are An Active Trader:
An active trader is a frequent trader or regular trader who’s only aim is to make fast money, and in most instances behave like a day/swing trader. These type of traders are well informed about markets, and read everything about investing. In other words, they are self-directed traders.
While deciding which broker suits their true requirement, active traders most of the time take into consideration few factors that help them make the right choice.
Cost/Price – For an active trader, fee or costs charged by a broker matters the most as he/she trades almost frequently and, so must get associated with a broker offering services at comparatively lower costs than others. One cannot ignore the universal fact that a trader’s profit can shrink in size if the fee and commission charged by the broker is high. As active traders are well versed with the market gyrations, they make sure that they compare the basic fee and commission on market trades, limit trades, option trades and margin rates before choosing a broking partner.
Robust Trading Platform – Any trader who like to ride the trend of a stock would always want a powerful trading platform/trading tool to carry out trading in a fast-track manner. Online trading is almost commonplace these days, which almost every brokerage house offers meaning to attract more and more technology-savvy customers. Today, every brokerage house (both discount and full-service) highly values the fact that success of trading depends on the support system in the form of advanced trading tools. These tools give an edge to a trader and help make most of a trade. Many reputable brokers also provide customised tools to suit needs of different traders. A fast and efficient tool enables a trader to keep a real-time track of his/her portfolio and place order from anywhere anytime.
Speed – For a trader who is frequently trading, speed and accuracy of execution is of great importance. This crucial feature can differ from broker to broker.
Multiple Investment Options – It is always a good decision to partner with an online broker who offers exposure to other investment products as well. Choosing such a broker allows a trader to tap other lucrative options and diversify his/her hard earned money into different assets like options, mutual funds, exchange traded funds (ETFs), bonds, IPOs to name a few.
Recommended Brokers For Active Traders:
1. SAS Online
– Ultra Competitive Brokerage (Rs 9/Trade or 1 Paisa)
– Easy-To-Use Trading Platforms
– Monthly Unlimited Plans For Trading At NSE, BSE & MCX
– Margin Against Shares Option
– Low Brokerage & Least Transaction Charges
– Free Trading In Equity Delivery
– NSE, BSE, MCX-SX & MCX Supported
– Supports Desktop, Web & Mobile Trading Platforms
– Lowest Flat Fee
– Advanced Desktop & Mobile Applications
– Margin Funding
– Multiple Investment Products
4. RKSV Securities
– Equity Delivery Trading is Free
– Single Platform To Trade Across All Segments And Exchanges
– Investment Options Across Various Asset Classes
– Lowest Transaction/Turnover Charges
– Trading Membership On NSE, BSE & MCX
If You Are An Active Investor:
Individuals who focus on short-term gains aggressively following every market movement are called active investors.
To achieve most from his/her investments, an active investor uses technical analyses and other market aspects to determine whether to buy or sell. Unlike a long-term investor or a passive investor, investment horizon of an active investor can vary from months, days or even hours or minutes.
An active investor would consider the following aspects while choosing a broker:
Cost/Price – Cost is always an important factor whenever we are shelling out money for any damn thing. As far as active investors are concerned, brokers with competitive rates are preferred more as active investing is expensive. There are some brokers who do not charge any brokerage, but a certain amount of fee on particular value of orders. An active investor must find and join hands with such brokers.
Advisory – Active investing demands in-depth knowledge of the market and financial instruments an individual is investing his/her money into. In other words, the person needs to take out more time for research. So in order to cut the time on market research, an active investor relies on expert advisory services offered by many full-service as well as discount brokers.
Advanced Technological Support – Like active trading, active investing also demands well established technological support to make the frequent transactions/activities smooth and successful.
Recommended Brokers For Active Investors:
– Investment Options Available In Equities, IPO, Mutual Funds, ETFs, Commodities & F&O
– No Charges For Fund Transfer From And To Bank Account
– Advanced Technological Backing
– Classroom Training, Seminars And Workshop For Investors
– Daily Market Report
– Average To Low Brokerage Rates
– Free Demat Account AMC
– RI Service Cell For Managing Operations For NRIs, PIOs & FIs
– Online Trading Software
3. Indiabulls Ventures Ltd
– Lower Brokerage In Equity Delivery, Future, Intraday & Currency Options
– Comprehensive Real Time Reports
– Powerful Desktop Platform & Mobile Application
– Research & Advisory
If You Are A Long-Term Investor (or Passive Investor):
As the term implies, a long-term investor is the one who follows buy and hold strategy, meaning to hold the bought stocks or any financial products from a long-term perspective. Such an investor adopt a long-term perspective and focus on enhancing the value of the invested assets.
For long-term investors, the factors that help him/her make better decisions can be (but not necessarily are):
Cost/Price – A long-term investor would also many a times consider fees charged by brokers, even if the person does not frequently trade. A broker offering services at nominal rates is what any type of trader always looks for.
Advisory – When a trader is absent from the market for a while, he/she is bound to miss some or other vital information or important market fundamentals influencing the market movement. But then, it is upto an investor whether to spend on such service as he buys a stock for one-time and let it grow in value terms.
RM Support – Handholding is yet another factor a long-term investor seeks in a broking partner. Such market participants many a times like to speak with their brokers on phone, meet someone in person from the brokerage house and talk to someone who can take them through their stock choices and other related processes.
Recommended Brokers For Long-Term Investors (Passive Investors):
1. India Infoline Ltd (IIFL)
– 3 Brokerage Plans – Variable Brokerage Plan, Flat Brokerage Plan & Value Added Subscription Plan
– Trading Platforms For All Segments – Trade Terminal (TT) For Web & IIFL Markets For Mobile
– Offers Tools Like Equity Investment Plan (Equity SIP) & Trader Multiple
– Daily Market Report & News Alerts
2. Angel Broking
– Access To All Market Segments On BSE, NSE, MCX & NCDEX
– Comprehensive Daily, Weekly & Specialized Research Reports, Articles And Videos From Expert Sector Analysts
– Support From Centralized Help Desk And Through Phone, E-mail, Live Chat & SMS
– Desktop, Web And Mobile Trading Facilities
– Investment Recommendations
3. Kotak Securities Ltd
– Comprehensive Research Platform Covers 166 Stocks In 16 Sectors
– 3 In 1 Account That Integrates Savings Account, Demat Account & Trading Account Into One Service
– Most Competitive NRI Brokerage Plan
– Largest Distribution In India
– One Of The Best Portfolio Management Service (PMS) Provider
Once you understand what your trading and investing pattern is, finding the right broker would not be a backbreaking task. No matter what type of a market participant one is, working with the right broking partner is undoubtedly the first step to find success.