Master Stock Trading: 5 Essential Tips for Profitable Investments in Share Market
Master Stock Trading: Essential Tips for Profitable Investments on Dalal Street and Wall Street

You want to learn stock trading to make money, but you don’t know where to start?

Investing in the stock market may initially seem a bit overwhelming, but actually, it’s not. It’s pretty simple once you get the hang of it. You just need a little guidance to get started, and then you’ll be good to go.

Many are putting money into the stock market to see it double in the shortest possible time. However, patience and discipline in the approach—by the way one chooses his or her investments—is what is needed to make money on Dalal Street or Wall Street.

Let’s take an example: When the price is at the bottom for your shares, it means you are selling at a loss rather than earning, because if those shares of yours increase in price after selling, then it would have been profitable for you to keep them until they increased in value.

Want some good stock trading tips for investing your money? Keep reading this article till the very end because we’re going to share some amazing tips on how to invest in stock markets successfully with less risk involved!

There are mainly five types of stock market investment that may help make up your mind.

  1. Stocks: These are essentially vested interests in one company. When the company is doing well, your shares are on a high—in fact, you could get up to 100% returns on them. In the reverse case, though, they could plummet as much as 90%.
  2. Mutual Funds: Think of money that allows you to jointly buy a portfolio of sometimes hundreds or even thousands of stocks in one fell swoop. Much more safely lower risk compared with buying individual stocks, with lower potential returns, they are more secure for your goals. You will want to look at the fund’s fee structure before you invest.
  1. Bonds: These are debt instruments, meaning companies or even the government issue them to come up with money for projects such as building bridges or paying up debts from previous projects like wars. These are safe investments but more time-consuming compared to stocks—you won’t get any return until after the bond has matured.
  2. Exchange-traded funds: Like mutual funds, ETFs diversify their investments across many stocks or bonds. But, unlike mutual funds, you can buy and sell an ETF on the exchange throughout the day, making them quite convenient for long-term investment or even short-term trading.
  3. Commodity Markets: It is an investment of choice for many investors. Commodities are indeed genuine raw materials like gold, oil, or wheat. Commodities are traded in the futures market, meaning you can buy a product before receiving the delivered goods. This makes commodities, therefore, an ideal option for any investor trying to hedge against inflationary pressure and currency fluctuations.

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This blog is going to talk only about individual stocks. After opening an account with brokers such as Zerodha, Groww, INDMoney, etc., you just need to add some money to your wallet and you are good to go. All of these apps are absolutely safe to use, their service really comes in handy, and you can trust them; however, aware of all the other fraudulent activities online.

In simple terms, for individual stock purchases, there is not much to choose between these brokers; they are all quite similar in their functioning and features. However, if you are an active trader, then do use Zerodha since it gives you more trading options compared to other brokers.

Therefore, Grow or INDMoney would be more appropriate if one wants to invest in mutual funds or ETFs, as they have more fund options compared to Zerodha.

5 Imperative Rules to Invest in Stocks

Don’t Expect Profits Overnight

This is not an easy task to invest in stocks. In stock market investing, you need to be extra patient. One should have trust in the company one is investing in. Do your market research in advance before investing.

Any company you invest in takes several years to extract your profit. For example, you won’t get back tomorrow, placing your Rs 10,000 investment made today with a hope of getting Rs 20,000.

Always do your homework on any company before purchasing. Check their financial statements and their competitors’ as well. In that way, you’ll be able to make a sound decision about where you want to put your money.

You may also want to visit social media such as Twitter and Facebook to find out what others are saying about this company so that you may know this is an excellent investment opportunity for you or not!

Set your feelings aside

In a bid to make money in the Indian Stock Markets, Sensex & Nifty, you will have to learn not to set your feelings aside if that is your target.

It sounds pretty easy on paper, but it’s actually really hard. We’re all human, and we have feelings! And those feelings can lead us right into losses.

So here are some tips for keeping your emotions under control:

  • Write out your questions that will help you in making wise, grounded decisions regarding the purchase or selling of any stock. Don’t get emotional about the answers; just ask yourself the questions and then write down the facts.
  • Don’t get too attached to any one stock or company. At the end of the day, they are business organizations filled with people trying their best—for better or for worse. The same could be said for any particular investor like you not getting attached, as it can lead to higher confidence and worse decisions in the end!

Don’t tie all your money to one company

It’s understandable to get emotional while watching your stocks swing up and down.

However, you may be taking an unwarranted risk if most of the money you have is riding on one company doing well.

This is to make sure that you keep your money safe in investing. For instance, you can invest your money in up to five different companies or sectors. It simply means that even if one company performs very poorly, the rest will balances out your portfolio.

Gradually build position

  1. Periodic investment, say every month or every quarter, of a fixed sum of money ensures that you would be averaging your stock over time, just to make sure you’re in the game and never buying the basket all at once. And if any investment falls out of favor, the others can still help along.
  2. Never rush to buy. Never invest in a bunch of stocks at a time! Try to make one or, at best, two good buys in a year. Only then do research on the company and the industry, and the strengths and weaknesses of its competitors.

Ex: State Bank of India Share price is 540 and you want to buy 50 shares of State Bank of India. You can buy 20 shares first and wait for some time. If the price falls you can then buy another 30 shares and average your trade.

Move On

Stock trading is like an ocean of fish. Some will slip right through your fingers, some will be delicious, and some just won’t be good for your appetite.

No matter how hard you try, you’re going to lose a trade or two. It’s not easy to win every time, and especially not when you’ve already lost one or two times. You may feel angry with yourself for allowing the trade to slip away or even upset with the stock market for being so unpredictable. But in reality, losing trades are part of the deal. And if you do not learn how to deal with losing trades and the rapidity associated with moving on, this really could affect your ability to make money in the long run.

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