The beginners enter the stock market to create wealth for themselves. The beginners investing in stocks india for the long term with the hope of earning dividends and stock price appreciation. Whereas, some beginners enter the market with the aim of intraday trading. They want to make money on a daily basis through trading and create a fortune for themselves. In this article, the beginners would learn about everything that they should be aware of while entering the stock market.
Let us begin by learning the meaning of stocks.
What is Stock?
A stock is a security that indicates that the holder has the share in the company in proportion to the quantity of stock held. The owner of the stock has rights on corporation profits and assets in the proportion of the stock held. The unit of stock is known as “shares”. Investors trade and invest in the stock of the company through stock exchanges. The stocks are bought and sold depending on the trade taken by the investor. The transaction of purchasing and selling stocks on the stock exchange is possible only by opening a demat account with a broker.
Since the transaction of stock or shares is done on the stock exchange, let us learn more about the stock exchange.
A stock market is a place where buying and selling of shares of companies take place. The stock exchange facilitates the hassle-free exchange of shares between the buyer and seller. Trading or investing activity on the stock exchange is possible only with the help of an intermediary i.e. stock broker or depository participant. By opening a demat account with the stock broker or depository participant, you can place the order of buying or selling securities. You can even place the order online or electronic mode.
In India, there are two major stock exchanges; National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). Let us learn more about them.
What is NSE and BSE?
If you are a beginner in the market and looking to trade in share and securities than you must have heard about the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). They both are the major stock exchanges of the country where buying and selling of stocks take place. A company raises money by issuing shares to the public and listing itself on these stock exchanges. Upon listing, trading in these shares is possible through these stock exchanges. Therefore, NSE and BSE is an organized platform for buying and selling the shares of various companies. Currently, 50 stocks form part of NSE and 30 stocks form part of BSE. The selection of these stocks is done on the basis of various parameters.
The beginners in the market must also know about the term “Nifty”, let us learn about it.
What is Nifty?
When you are looking to become a trader in the market, you must know about the term “Nifty”. Nifty is also known as Nifty 50. It is a market index consisting of the top 50 financial sound companies in India. These companies trade on the National Stock Exchange (NSE). The selection of these 50 companies is done from 24 different sectors of the economy. The management and ownership of Nifty are in the hands of India Index Services and Products (IISL).
Let us now learn how you can trade as a beginner in the stock market.
How to investing in stocks India as Beginner
Before starting trading, a beginner must have the right knowledge about the market. With proper information and knowledge, the right decisions can be taken. Also, the beginner must know how much funds he can set aside for the trading purpose and the amount he would not mind losing. The trader must also set time for research of stocks. Avoiding penny stock in India is also important during trading. The beginners must ensure that they put stop losses in place to avoid heavy losses in trading. Along with stop loss in place, the beginner must not be greedy and timely book profits.
Technical analysis holds an important place for trading, let us learn about it.
What is Technical Analysis?
Technical analysis involves reading the historical data of a stock or index on a graph or chart to analyze its future trend. The concept of technical analysis gathers data from trading activity with factors like price movement and volume to determine the future price trend. Technical analysis is useful for short term traders and helps in evaluating the strength or weakness in the stock. Technical analysis believes in the saying that “History Repeats Itself” and by reading the historical data, the price pattern of the stock would repeat as well.
The stock chart is an essential aspect of technical analysis, let us learn about it.
What is Stock Chart?
Stock chart is the price chart of a stock that has price and volume plotted on it over a time period. You can view stock charts for a daily, weekly, monthly, quarterly, etc. period. For traders, the concentration must be on daily and intraday data to find the short term price movement. For long term price trend movement, weekly and monthly stock charts are useful. The opening, closing, high and low prices at the start and end of the day are very important data points on the stock chart. There are three basic types of charts that are useful; line, bar chart and candle and stick chart.
Let us now understand the term intraday.
What is Intraday?
As the word intraday suggests “within the day”, intraday trading is about squaring off the transaction in the same stock market session. Intraday trading involves purchasing and selling stocks on the same day. Intraday trading aims to make sure that no trade is taken to the next day. Intraday trading takes advantage of price fluctuations in a trading session and booking profits. The intraday trade must be taken with discipline and stop loss in place to become a successful trader.
The beginners in the market must know how much money they require for investing in stocks for beginners.
How Much Many Money Beginners Need for Investing in Stocks
The beginners in the stock market do not require big funds for investing in the market. They can begin by investing as little as Rs. 10,000 to Rs. 20,000 in the market. By learning more about trading in the market, the beginners in the market can increase their investment amount. By increasing money at a gradual pace in the market, the risk of losing big money in the market is comparatively low.
Now it important for the traders to know where to learn the art of trading and through which course.
Nifty Trading Academy – Diploma in Technical Analysis Course (Rs. 5,999)
Nifty Trading Academy is one of the leading stock market academies in India. The beginners in the stock market can join the “Diploma in Technical Analysis Course” by paying just Rs. 5,999. This is an ideal course for beginners. It helps them to learn how the stock market works and functions. In this two day course, the beginners will be able to learn all the basics of the stock market. The classes for this course are held on every Thursday and Saturday. For any further information or query, you can get in touch with us through email or phone call.