Beginners Guide to Invest In the Share Market

By the time a person starts to earn, they realise that simply earning and saving money is not enough. Inflation always cuts into the value of stagnant money, which is why investing is crucial. In order to accumulate enough finances to meet future goals, one must invest in avenues that will multiply the savings. This is the major reason why people turn to the share markets for wealth generation. If you know how to invest, the share markets are a promising approach towards long term wealth creation. However, before you being to invest in the share markets, you should be aware of the basics.  

How to Begin trading?

In order to start trading in the share markets, you must have an online demat account and a trading account. A demat account is just like a bank account, but for shares. The shares that you purchase from the stock market are stored in an electronic form in a demat account. On the other hand, a trading account acts like an intermediary who facilitates the buying and selling of shares. Whether you decide to undertake share trading individually or through a broker, you need to have a demat account and a trading account.

How to open a demat account online?

You can open a demat account with a bank or a brokerage firm. After selecting the firm of your choice, you can follow these steps to open an online demat account:-

• Download and fill up the online demat account opening form and submit it with the required documents such as PAN card, address proof etc.
• Read carefully through the terms and conditions in the form and clarify any doubts with the brokerage firm.
• Once the forms are processed, you will be provided with the account number and client ID.

How to buy and sell shares?

As a beginner, it is always better to start trading with a broker or a brokerage firm. The broker will buy and sell the shares on your behalf. All you need to do is inform the broker about the company name, the quantity as well as the price at which you are willing to buy to sell the shares. The trading of shares in India, takes place through the two main stock exchanges, NSE and BSE.

Four Useful Tips to Successfully Trade In the Stock Market

Investing in the stock market can be a frightening as well as an exciting experience at the same time. Trading in the stock markets can be a highly profitable if you know where to invest. With the advent of online trading, investing and trading online stocks has become easier. One can easily access information about various stock in the Indian share market. Many online broking websites provide information about the shares such as NSE top gainers, BSE top gainers etc. on daily basis. Information is the key to successful trading in the stock markets. Apart from keeping tabs on the latest business information, here are few more useful tips to profitably trade in the share markets:

1. Follow stop loss order: Stop loss order is the fundamental step of profitable trading. With a stop loss order, a trader can sell a stock automatically when the price drops to a certain point. For instance, you buy a share for Rs 100 and the price drops to Rs 90, the stock will be sold automatically. Hence with a stop loss order you can be clear about the limits of loss, you are willing to bear.

2. Practice: Trading in the stock markets is a skill and it can only be developed through constant practice. With experience you will learn the do's and don’ts of trading. When you become an experienced investor you can spot amateur investors and trap them by taking an opposite position. This becomes profitable as a lot of amateur traders investors buy and sell shares at the wrong point.

3. Invest according to your means: If you are an amateur investor, start by investing only small amounts in the share market. As you gain more experience, you can increase this amount gradually. However make sure that  share market investment, is from your own pocket and not borrowed money.

4. Stock volume: A stock needs to have enough volume for it to be tradable. To trade profitably, a stock should have a daily average volume of 500,000 shares. Beginners can start trading with Nsifty 50 stocks. 

Watch out the video which explains when is the right time to invest: