Stock market trading is something one has to learn from the basics. Equipped with the required knowledge and experience, one can trade in shares of many companies and make money.
If you want to know how to trade in the stock market, you should undergo training programs such as stock trading India conducted online by many veteran share traders. Stock trading in India is simple and many people are doing it. Some people are making good money and they are mostly brokers or experienced investors. You also can do this provided you learn the basics of stock trading. You have to begin with a Demat or trading account.
The process of trading
When you buy a share, you use your trading account. Your money is transferred from your bank savings account to purchase the share and this share is transferred to your Demat account. The money that you earn in share trading is transferred to your bank account. Your trading account is linked to your savings account. This is an important step. This you must take to learn stock trading. you should familiarize yourself with the interface. You should check about the credibility of the broking firm before you start trading. the trading account will allow you to do online investment in mutual funds, equity shares, IPOs, etc. The interface should be secure so that your transactions remain safe. You should know some basic terms like IPO, portfolio, yield, index, sectors of the economy, volatility, and so on. You can educate yourself by joining investment courses. It will give you a better understanding of the terminologies used in the stock market. You can use a stock simulator to learn to trade. You will learn about investment strategies. This is known as virtual investment or paper investment. It will give you a virtual experience of the stock market. You will know how the stock market functions. There is no risk, so it’s safe. The money that is used is not real money, but virtual.
You should go with low-risk and high-reward trading, to begin with. You will gain high returns but it will come with high risk. For instance, you can start with Indiabulls share. You should have a plan and a strategy to invest in the market. You can make the right investment decisions with the right strategies. You should decide on the quantum of investment and how long you want to remain invested. It all depends on the purpose of investment. You have to plan your schedule for your orders of investment. As because you are a novice, you should have a mentor. A mentor is an experienced person in stock trading. He can guide you throughout your journey.
Types of trading
There is intraday trading or day trading. in this trading, you avail yourself of the margins earned in the day. You can purchase more stocks during day trading. Your broker or guide will advise you to invest more or less in stocks. He may advise you to buy some additional stocks depending on his strategy. He will share the strategy with you so that you learn about strategies.
Delivery trading is another type of trading. In this type, there is buying of stocks and holding them for a few days. It is a more secure way of trading. In this trading, there is no question of the margin of trading.
A bull market is a phase in the stock market where there is an upward growth trend. There is all-around enthusiasm and optimism. There is palpable confidence among people attached to share trading. There is a rise in stock prices during the bull phase. There may be a downward trend before or after this phase. In the bear phase, there is a downward trend in the market. Pessimism is prevalent. People start selling their stocks frantically. People anticipate a fall in the share prices and that creates a kind of panic. There is a substantial fall in the share prices during the bull phase.
Electronic trading & floor trading
The stock sell and purchase was a tedious process before electronic trading came into the picture. The investor calls the broker to buy or sell a stock. The broker asks the floor broker accordingly to do as instructed by the investor. The floor broker executes the order. Your broker will give you the confirmation that the order has been executed.
An auction market is where the prices depend on the auction of the shares. The lowest price accepted by the seller and the highest price offered by the buyer decide this market. If there are a matching bid and offer, the transaction is made. There is a dealer market too in which dealers express their selling and buying price. It is displayed prominently and there is transparency in the system.
The quantum of your investment depends on the surplus money available to you for investing and the risk appetite that you have. It is also advisable to diversify your portfolio of investment. It will minimize the chances of making losses. You should familiarize yourself with the financial analysis and technical analysis. Future prices can be inferred based on financial analysis. For financial analysis, one should have a fair idea about a company’s financial health, its reputation in the market, and so on. The size of the company’s share in the market is also put under the scanner.
The BSE and NSE
Trading in the Indian stock market takes place on these stock exchanges. They were established on different dates in the past. Both the exchanges have many similarities like both follow the same trading mechanism.