I had never invested in stocks. Never even thought about the stock markets. PE and EPS were alien terms for me. Bears and bulls were just two species of animals. But that changed a few months ago.

The need to decipher the mood swings of my office colleagues, which seemed directly related to the hypnotic gyrations of the Sensex, egged me to take a peek into this new world. Giving online trading a shot seemed the easiest way to find out why moos changed to growls in office for no apparent reason.

An online trader is spoiled for choice. A quick search on the Net and within the hour, I had applied online for trading account information with five online trading portals—Indiabulls Securities, Sharekhan, ICICI Direct, Kotak Securities and Religare.

In the end I chose Indiabulls, partly because the saleperson was persistent and hard-sold the package and largely because he offered to lower the brokerage (from 0.5% to 0.25%) once I became a regular.

The paperwork was simple and relatively painless. A copy of my PAN card, address proof (landline phone bills are acceptable), three passport photographs and a cheque (Rs 1,650) were all that was required for opening the demat account and trading account. I was assured that my trading account would be activated within seven working days. It actually took 15 days (including holidays) for the paperwork to percolate back.

I spent that time brushing up on the basics of the stock markets. Then the executive-turned-relationship manager gave me a demo. I had paid for a high-end package which included a special dedicated browser. He installed that, set up my passwords and voila! I was now an online stock trader.

For my trading corpus, I decided to play safe and initially deposited Rs 50,000 in the trading account. Since I saw myself as a serious longterm investor, my inclination was towards blue chips. On that first day (3 November 2006), with the Nifty at 3805, there appeared nothing worth buying.

But the executive suggested I carry out an intra-day trade just for the experience. On intra-day trades, Indiabulls offers 25% margin—that is, I could buy shares up to the value of Rs 2 lakh on my Rs 50,000, provided I settled (gain or lose) inside the same session.

So I selected Voltas, a Tata company. The process was simple. Click to open the trading screen, key in the company name and other things like price and number of shares in the boxes, put in the password and click on “Confirm”. I placed an order for 1,000 shares at Rs 111.25, confirmed the order and saw the deal materialise at 12:43 pm.

The price hovered around my purchase price for a while as I watched with bated breath. At 1:14 pm, Voltas hit Rs 112.40. Unable to take any more stress, I sold. My first pair of trades ended with a profit of Rs 1,150. Actually, all the deductions (brokerage, STT, stamp duty and service charges) reduced my gains to about Rs 1,000.

The executive congratulated me and promised that the papers would reach soon (the paperwork is done within T+2 days where T is the transaction date). “Keep adding the profits to your corpus and watch your money grow,” he advised.

I was hooked. Advice poured in number of buyers and sellers for the stock when the market opens and follow the simple logic of demand and supply,” suggested one friend, who has been trading for some time. If there are more buyers, price will go up that day, if more sellers, the price will come down. 5 November 2006: The Nifty is at 3856. Buyers are entering Indian Hotels (another Tata company) at a market price of Rs 141. I place an order to buy 100 shares, hoping to sell at a profit before the session ends. No technical analysis, no fundamental research. The day progresses slowly. Buying continues but the price refuses to budge. I am stuck with the shares; selling would mean a small loss after paying all the charges.

The day ends with Rs 14,100-plus brokerage blocked (brokerage excluded) in shares I didn’t intend to hold. Of course, Indian Hotels is trading at Rs 147 now so, I haven’t made a loss.

However it’s a very meagre return on a six-month holding period and less than a simple fixed deposit offered. That trade taught me a useful lesson in that it forced me to think long term. My next error came through applying the old adage “better late than never” at the wrong time.

Having missed out on the oversubscribed Parsvnath IPO, I bought 50 Parsvnath shares on 3 January at Rs 469. It’s now at Rs 297 so that impulse really hurt.

ONLINE VS OFFLINE

Find out how online trading scores over an offline account...

Paperless trade: The trading account is linked to your demat and bank accounts. No more cheques or demat slips Portfolio tracking: Access transaction history by just a click. Keeps account of funds. No need to track separately E-convenience: Log in and place trade orders even after market hours for execution in the next session. Not very easy in offline Information: Updates you with price-sensitive news and research reports.You can also track other sources on the Net. But learn to ignore tips Offline backup: Most online brokerages also accept orders on phone so there is a backup if the Net connection breaks

... and how it doesn't

Rigid rules: If you are short by even a rupee in margin, the trade won’t be allowed by the system. Offline brokers are more flexible in such cases Timed out: Most e-brokerages halt trading about 30 minutes before the session ends. You may miss a big move Easier funds: It is also easier to arrange cash to take delivery from an offline broker

But intra-day trading is addictive— it’s like a videogame where you have several “lives” to play with and “levels” to conquer. I continued with it, won some, lost some. There were times when I bought scrips and sold at a profit after a few days. Stock trading seemed my metier. Once, I even thought of quitting my job to turn into a full-time trader.

On Budget day, I listened to rumours and suffered for it. Prices are sure to fall, everyone was saying. Strategy: Buy on 28 February at reduced prices and sell in the next session when there’s a recovery.

Feeling quite confident, I picked up 100 Dabur at Rs 95.70. Then, global markets went into a tailspin and the Sensex crashed. My strategy went topsy-turvy.

I was busy at work so I could not monitor the market and missed the momentary price corrections that offered exit options. That’s when I learnt that day trading is a full-time job. It takes a lot to sit at a terminal continuously and respond whenever red turns blue, or vice-versa.

Today, Dabur is at 99. Of that original corpus of Rs 50,000, several deals are showing losses and I have just Rs 14,655 left in hand. There was a point of time however, when that account had swelled to above Rs 88,000 in cash.

Of course, I am holding several blue chips and six months is hardly a blink in the career of a long-term investor. I intend to hold onto the shares I possess. Perhaps when I will trade them in later, I will more than make up!