How To Learn Trading In India
How To Learn Trading In India
In today’s day and age financial literacy is an important life skill which every individual must learn in order to achieve financial freedom. Gone are the days of keeping your hard-earned savings invested in either Fixed Deposits, Gold or Real-Estate for your entire life and then ending up with a total corpus of savings which is way to less than what it could have been if you had resorted to the modern financial instruments of finance such as the stock market.
The traditional financial instruments are not enough in today’s times and relying solely on them for investment or trading purposes is not sufficient to beat the test of inflation. Therefore, it becomes imperative to learn the stock market trading and investment so that so that we could beat the inflation and take wise financial decisions that makes us financially empowered. In order to learn stock market trading we first need to be clear of why should be learn it in the first place.
Why should we learn stock market
Majority of our population still invests either on the basis of same old traditional concepts or on the tips of friends and relative. Shockingly, according to official data only 27% of the Indian population is financially literate which have severe consequences not only for an individual but also on the entire economy such as:
- A financial illiterate individual is more prone to falling into debt trap which gives rise to financial crimes in the country.
- A financial illiterate individual is unable to accumulate wealth and build assets for a financially empowered future.
- It perpetuates income inequality among individuals and hampers the economic growth in the long run.
How to learn Stock Market Trading in India
Before focusing into stock market trading, it's crucial to comprehend the various market types within the stock market:
The primary market is where companies introduce new securities and offer them to the public. Transactions occur directly between issuers and buyers during this phase.
In the secondary market, one can buy and sell shares that were initially issued in the primary market. The transaction is conducted between a seller and a buyer, with the stock exchange or broker serving as an intermediary.
Understanding these market distinctions is fundamental for anyone looking to engage in stock market trading. Additionally, if a share is bought and sold on the same day, it is termed as intraday trading, with traders determining their profits or losses at the close of the day.
Stock trading, though enticing, can be overwhelming for beginners. Understanding the dynamics of the stock market is crucial for making informed decisions and navigating the complexities of trading. Let's explore some essential tips to guide beginners through their stock trading journey.
1). Opening a Demat Account
The first step for anyone looking to enter the share market as a trader or investor is to open a demat or brokerage account. This account functions similarly to a bank account, where you hold funds for trading, and the securities you acquire are electronically stored. Knowing how to open a demat account is essential for those eager to dive into the world of stock trading.
2). Learning to Stop Loss
Volatility is inherent in the share market, making it essential for beginners to understand how to prevent significant losses. Setting a stop loss price while executing a trade is a strategic move to minimize potential losses. Failing to implement a stop loss can have a detrimental impact on your capital.
3). Fundamental and Technical Knowledge
A successful stock trader is armed with both fundamental and technical knowledge. Fundamental analysis involves evaluating a security's intrinsic value, considering factors such as earnings, expenses, assets, and liabilities. On the other hand, technical analysis evaluates a stock based on its past price and volume charts to predict future potential.
you can learn trading with best technical analysis course
4). stock market course
If You are serious about trading or investing in stock market then you could learn stock market trading from the industry expert. This stock market course will help you to provide the complete understanding of how does stock market works.
5). Follow the Stock Market
Stay updated with the market trends by watching news channels like CNBC and Zee Business. These channels host several TV shows and panel discussions on how to invest in the stock market and provide useful information about stocks.
6). Read Financial Article
One way to learn about the stock market is by reading financial articles on popular websites such as Money Control and Economic Times.
Which help you to know how to select good stocks for long term investment
7). Read Books
Reading financial books can be an excellent way to gain knowledge, whether you're a beginner or a seasoned trader. It's important to choose a book written by a renowned author that uses simple language to avoid confusion with jargon. You can seek recommendations for books or use Google to help you find the right one for you.
8). Share Your Doubts
In case of assistance to smoothen your stock market journey you can even attend Stockdaddy free doubt session that will clear all your stock market related doubts before you put your hard earned money in the market.
9). Starting with Safer Stocks
A cautious start is often a wise move for beginners. Beginning with less volatile stocks may provide a slow but steady introduction to stock trading. This approach helps build confidence and resilience, essential qualities for navigating the unpredictable nature of the stock market.
10). Bids and Asks
In the world of stock trading, bid and ask prices play a crucial role. The bid price is the maximum amount a trader is willing to pay for a stock, while the ask price is the minimum amount a seller is willing to accept. Determining the correct bid and ask prices is paramount for ensuring a profitable trade.
11). Understanding Stock Quotes
Stock prices are influenced by various factors, including demand and supply, economic reports, company profitability, and trader sentiment. Gaining knowledge about these aspects enhances your understanding of stocks and markets. This knowledge becomes a compass, helping you decide the right price to enter or exit a trade.
12). Seeking Expert Advice
The unpredictability of the share market is a reality that even seasoned traders grapple with. While accurate prediction is impossible, seeking advice from experts can guide beginners in making informed decisions. Expert advice serves as a valuable compass in the ever-changing landscape of the stock market.
In conclusion, entering the world of stock trading demands careful consideration and a commitment to continuous learning. Opening a demat account is the first step, followed by gaining comprehensive knowledge of stock market dynamics.
These tips, ranging from understanding stock quotes to seeking expert advice, create a roadmap for beginners to overcome challenges and embrace the opportunities presented by the stock market.