5 Step Tip For Share Market Beginners
If you are thinking of becoming a trader in the share market and you are unsure of how to start. This blog will help you to understand and make a road map for you to build a career in the share market domain and help you to remove all the confusion about the share market.
We recommend checking the following books to enhance your knowledge in the share market.
The following are steps that will help you get started in the world of the share market.
Step 1. Learn the basics:
First, we have to decide what we want to get out of the share market. Obviously, our goal is to make money from the share market. Like any career, we need to do our basic studies before starting working on it. Like in the share market we need to study the
- Fundamental analysis
- Technical analysis
In the fundamental analysis, we need to learn at least to understand to check the growth pattern of companies by doing a comparison between the current and last year. In the technical analysis, we need to learn to follow the basic charts like lines and the candlestick and a few of the indicators like RSI. By studying the basic terminology, we will be in a position to make coherent decisions.
Step 2. Understand:
Once we learned the basics, it is time to start a deep understanding of the share market and the brokers who provide us with the Demat and trading account. Following things which we need to understand about our broker,
- Other charges
- Margin and leverage
- Market timing
The first thing we need to understand about the brokerage is that our broker charges for Delivery & Intraday trading. Then we need to understand the other charges like STT, DP, GST…
Finally, we need to understand the margin and leverage our broker will provide to us, and the market trading timing which the broker will provide.
Step 3. Research:
Once we have clarity about the fundamental and technical analysis, we have to open an account with a broker, next thing we need to do is research different stocks and bonds. if you are unaware of the basics, it will be difficult for you to build your own strategies for trading/investing.
- Don’t blindly follow the recommendations.
- Follow a few no’s of companies from different domains.
- Study and make your own strategies.
Even though there are many companies around us to provide tips and recommendations, don’t follow them blindly we need to spend at least a few days mastering the basics and finalising the companies with which we can start. The time we spend on learning will be helpful for us to build our own strategies.
Step 4. Start with:
Once we are confident in our learning and the strategies, we can start by investing in quality stocks and bonds, which will help us to create a good portfolio. We also need to understand different types of trade orders which we can place in the market.
- Investment in quality stock
- Create a good portfolio
- Position trading
- Finally Intraday with the profit of position trade.
Once we learn about the types of orders, we need to concentrate on the position trading on the quality stocks. Finally, once we have the short-term capital gain we can think of Intraday trading using the capital which we gained from the long-term and short-term trading in the market. As we are using the gained money, we will be more confident in taking the positions.
Step 5. Trade:
Finally, once we start trading, we need to keep in mind the following points, which will help us to focus on profit booking.
- Never trade without proper stop loss.
- Never trade against the market trend.
- Never do revenge trade.
- Avoid using the margin facility in the initial stage.
- Do not short sell without having a clear-cut positive indicator.
It is ideal not to take the position during the market opening time as the volatility of the stock will be high at this point in time. We also need to learn to control our emotions, even if we are facing a loss in the trade position. We need to understand the fact that, profit and loss are the two sides of the coin.
We need to start by learning the technical and fundamental analysis to become successful traders or an investor. Then we need to start trading by opening a demo trading account with a small capital and once we start formal trading we need to keep stop loss and target price in the mind before taking the position.
- We need to plan our funds to diversify and we should have long-term investing goals before investing our hard-earned capital into the stock market.
Open free Demat and Trading Account uses the following links with respective brokers.
UPSTOX ACCOUNT OPENING LINK :
Or please use referral code as ” HYYEP ” For
Opening DRA ( Digital referral Associate) Account please contact me, so that I can refer you. Easy & 100% Digital ( Online ) Account Opening in 5-10 minutes.
Documents required: PAN and Cancelled check / Bank account statement copy for uploading.