How to invest in stock market?
Before investing in stock market, you must know few things;
Stock market is place where you can make a lot of money, when properly understood and can lose all you money too if you invest without any proper knowledge.
The first point which we should keep in mind is that we must not jump in to the stock market blindly; in our daily life sometimes we listen people taking about stock market, exp: they got profit out of this stock, else this stock is performing good etc. After listening to these if you decide to dive in to stock market randomly definitely you are going to lose. So Before diving in to the Stock market at least you should know the basic of it.
There is an old adage: It is not stock market but a market of stocks.
Before making your first investment, take your time and learn the basics about the stock market and the individual security composing the market ( the individual securities which you are investing and the relationship with the broader economy), some stock selection timing and method, trading basic rules, terminology, stops loss, take profit, margin money, market relation with inflation ,GDP etc.
Avoid nerd mentality and emotional attachment with stocks. There is a tendency of people that they will listen and they will apply but in case of stock market if will only listen without understanding you are going to lose. So you must avoid nerd mentality and nerd mentality people too. I have mentioned emotional attachment with stock; it necessitates greed cycle and fear, greed of getting more profit and fear of losing money.
These are the basic things which we must know before dive in to the Stock market.
So to invest in stock market we must have; basic knowledge about it and a Demat account.
What is demat account?
A Demat account/De-Materialized account, is an account to hold securities in electronic form. The purpose of opening a demat account is to hold shares that have been bought or dematerialized (converted from physical to electronic shares), thus making shares trading easy for the users during online trading.
How to open Demat account?
Select depository participant
Fill up account opening form
In person verification
Account Number and ID provided
Documents required to open Demat account?
· Proof of identity (POI)
· Proof of Address (POA)
· Proof of income
· Proof of Bank account (bank statement/ Cancelled Cheque)
· Pan Card
· Passport size photographs 1 to 3.
Trading in the stock market without any prior knowledge about stocks is gambling! The trader has to make sure that he is aware of the right strategies which have to be employed in the right market conditions in the right stock. It’s important to know the right tools to be used as the stock prices keep fluctuating and the trader should know how to make profits with an unstable price. You need to learn the basics of reading a chart and quotes. Stocks trade on an exchange where buying and selling take place between 9:15 am to 3:30 pm and in other hours too known as pre-market or post-market orders. You always sell a stock at a higher price than the buying price to make profits. In Intraday trading it is possible to sell first and then buy later, it’s known as short selling.
Risk Management is yet another important factor that needs to be considered seriously by the trader.Start observing market before rushing into any trades.Its better to trade under someone mentor-ship before investing real money into trading.