Entering the financial world is not difficult. Basic investment knowledge, such as buy low and sell high, remains a cornerstone of the financial trading industry. Returns on investment are also similarly calculated; the higher the risk, the better the return on investment.
If you are new to trading, you are probably wondering how to trade stocks in Malaysia. Trust me, the process itself is not too difficult to understand.
Here are some things you should know before you start your journey.
Open a CDS account
Firstly, you need to open a CDS account. Central Depository System (CDS) is an account for investors to buy and sell shares, as well as to track shares’ movements.
In order to open a CDS account, you need to approach an authorized depository agent such as stockbroking company, and provide a copy of your identity card and RM10.
Open a trading account with stockbroker
You will also need to open a trading account with a stockbroker. This should be done simultaneously with the opening of your CDS account. Some stockbrokers might require you to pay deposit and hold a minimum balance on your trust account in order to trade shares.
Bear in mind that there will be fees and charges when you buy or sell shares, thus it is best to consider brokers with lower fee. A list of licensed stockbroking companies can be found on the Bursa Malaysia or Securities Commission Malaysia website.
Get a remisier
After setting up your CDS account, the next step would be choosing the right remisier for your trading.
A remisier is an agent of a stockbroking company that is licensed by the Securities Commission. Remisier helps to make the order for you; such as selling and buying stocks according to your preferable price. Normally, the stockbroker will recommend a remisier to you.
Otherwise, you may opt for an online trading account. Online trading allows you to trade stocks with the convenience of trading anytime, anywhere and any devices. You are able to regularly check real-time stock processing, access account portfolios and even track your trade history. Basically, you are in charge of your trading activity.
The only downside to this would be, you may find it confusing and end up making a loss.
Do your research
Remember, trading is not like betting money and become rich overnight. You need to spend time to analyse the company’s business model, competitive advantage, revenue trending, net income growth year by year, profit margin and so on.
So you can understand on whether the company has been proved to be profitable, and at the same time to prevent pitfalls of your investment. You can start conducting research on the company’s development through sources such as Bursa Malaysia website and the news.
Final word for trading beginners
Last but not least, choose a market that you are interested in and can afford. Get the right equipment and software for your trading. Steady your nerves, because a bumpy ride is common for several months.