Dos and don’ts of trading that one must follow

5 mins read
by Angel One

Making investments work in a systematic way is in your hands. For this, you should follow the dos and don’ts of trading just like you follow them in your daily life. This will also help investors go through the thrilling ride of trading with ease. We have compiled a list of dos and don’ts that you should keep a tab on for smooth trading.

Dos of trading

  • Beware of assured returns

The urge to make easy money may overpower an investor’s financial decision. They might get attracted to flashy schemes, weird business models, and promises of unachievable results. But let’s understand that there is no such thing as easy money. Wealth creation is a long-term process, thus, it needs time and patience. So, you should never believe written as well as oral promises of assured returns and fall prey to those offering huge profits to trade in particular securities.

  • Review and settle your trading account periodically

Opt for monthly or quarterly settlement of your trading account, if you have a running account so that you can

    • Keep track of your funds and securities

    • Ensure there are no unauthorized transactions

    • Make sure no idle funds and securities are lying with your broker

    • Inform your brokers or get clarity immediately in case you find any discrepancies

You need to mandatorily provide email and mobile number to your broker while opening a trading account. However, if there is any update in your contact details post opening a Demat account, you must inform your broker with the new email ID and phone number to get regular updates. If you have stopped receiving messages from the exchange/broker regularly, you must immediately inform your broker.

  • Opt for frequent settlement of accounts

In case you have opted for running an account, make sure that your account is settled and you receive your account statement regularly and not later than 90 days in any case. You should know that in case of any default by the broker, claims longer than 90 days won’t be accepted by the exchange. So, act accordingly.

  • Ensure that payout of funds is received in your registered bank account

If you have raised a payout request, please ensure that funds are credited to your registered bank account within 1 day. Even if you have selected the correct bank account for the funds payout, you must cross-verify that you have received the funds in the same account.

  • Familiarize yourself with the complaint redressal process

In case of discrepancies or disputes, you must file a written complaint to the broker/sub-broker and SEBI within a reasonable time. However, in case of any disputes with the sub-brokers, inform your main broker within 6 months.

  • Keep yourself updated with the latest happenings or new regulations

You should keep track of rules, regulations, and circulars issued by the stock exchanges and SEBI before entering into any transactions. This will help you carry out your transactions easily and without any hassle.

  • Keep track of your portfolio

You should monitor your investments and their current market prices as reflected in your portfolio on a regular basis. As it is imperative that you know how much returns your investment is giving and in case, a particular investment is falling or going up for a long time, you can take appropriate actions.

Don’ts of trading

  • Do not transact with unauthorized brokers/entities

You should not enter into transactions with brokers and entities not registered with SEBI to save yourself from dubious schemes. Always check the SEBI registration number of your broker before dealing with them to save yourself from fraudsters.

  • Do not ignore communications from the exchange

Never ignore an email or SMS received from your broker or the exchange for your trades. Always verify the same transaction with your Contract Notes or Account Ledger. In case of any discrepancy, report it to your broker or the exchange.

  • Don’t share net banking credentials

In today’s tech-friendly world, where everything can be done over the internet with just a few clicks, you need to be extra careful of your digital safety. Never share your credentials or password with anyone as doing this will weaken the security of your account. Apart from this, you should not share your OTP as well to protect yourself from fraudsters.

  • Do not transfer funds to unauthorized persons

For the purpose of trading and/or investing, do not transfer funds to anyone’s account other than a SEBI registered broker. This will keep you protected from falling prey to fraudsters.

  • Don’t blindly follow investment advice

There are many TV channels, ads, websites, and SMSs that give you investment advice. You shouldn’t invest your money blindly based on their advice. Do proper research about the company, its financial status, growth prospects, and other related factors before investing in any of the securities like equities, futures, options, etc.


In an effort to achieve your long-term financial goals, don’t forget that apart from research and patience, you need to follow the above-mentioned dos and don’ts for successful trades. This list is just a guide and we believe that you will learn more dos and don’ts through personal experience when you start investing. Go ahead and start investing wisely!