Want to know how to learn trading? Well you have landed on the right article.
The stock market is for two types of people: those who want to earn ‘More Money than God’ and those who want to keep their money safe.
If you fit in either of these two, continue reading further.
You can make unfathomable amounts of money from the stock market, and there is no fixed way of doing it. It all depends on your personality, financial needs, and style.
In this article, we have covered the best methods to learn share market.
how to learn trading
what is trading in stock market
Share/ Stock market refers to the marketplace for buyers and sellers of shares of a company. Companies raise money from the public through IPOs.
Companies use this money to generate profit, dividing that profit between investors like us. There are two marketplaces in India: National Stock Exchange(NSE) and Bombay Stock Exchange(BSE). You might have heard of Nifty and Sensex.
Nifty is the summary of NSE and Sensex is the summary of BSE. Nifty doing ‘good’ or ‘bad’ means the average price of stocks going up or down.
Trading vs Investing
When you buy a stock to sell it later at a higher price, to profit the difference, it is called trading. But when you buy a stock because you want the dividends, it is called investing.
Dividends are your share of the company’s profits. Trading is short-term. You could hold a stock for a few seconds to even weeks. But investing is almost always long-term. You buy a company, and you never sell. You recover your money from the dividends.
Before you earn, you need to learn.
how to trade in stock market By Reading Books
Books are your best friends. The greatest traders and investors, who made millions from the stock market over their lives, have attempted to summarize their life learnings into books for you to learn from.
Read them to understand what you are getting yourself into. Knowledge compounds. The more you read, the faster it grows.
Initially, you may feel overwhelmed, but muster up the courage to keep going.
how to trade on stock market By Reading Relevant Articles
There are hundreds of publishers, websites, and journals, online and offline. There is also a constant supply of new articles about what's hot in the market, news, events, and what to expect in the future.
Moreover, trading firms, mutual funds, and investment banks annually release their views on the future and strategies. Understanding this information could completely transform your trading and investment trajectory for the better.
Find an Investing Buddy
"If you want to go fast, go alone, but if you want to go far, go together".
Having a like-minded friend or community to assist you will save time, encourage you when it gets hard, and allow you to share resources.
Wouldn't it be interesting if you and your friend could purchase a book or a course together, share the cost, and take turns reading/ watching it?
learn stock market trading From Mentor
The stock market can get overwhelming. Someone who could help you navigate through this vast world of unending possibilities would be priceless.
A person who has spent countless hours of their life dealing in the stock market can save you countless hours of your life. A mentor doesn't have to be a veteran.
It could be anyone with more experience than you. Your colleagues, your teachers, your parents, etc., can fill the shoes of a mentor too. With the power of the internet, you can also befriend people worldwide.
The CEOs of large corporations are only a few clicks away.
Just be careful of scammers who pretend to be veterans in the industry, only to charge you money for their courses, books, and services.
how to trade in share market By Taking Online Courses
If reading is not your jam, how about consuming content in the form of courses and videos?
There are many courses online, from free to costing millions, which can considerably shorten your journey to unravel the art of making money from the market.
Traders and investors try to sell their strategies all the time. Some work, some don't. Learning the strategy directly from someone who uses them to make money sure sounds good, but be careful of scammers.
Don't let this discourage you. Once you find the thing that clicks, you'll be unstoppable! But as markets change, so should your strategy. It's a journey, and you should constantly add skills to your arsenal.
how to start trading By Following Successful Investors
Warren Buffett is one of the most prominent investors, whom you can learn a lot from his books or videos. But he is not the only one.
Lately, many websites and mobile apps have been coming up that lets you track the activity of top traders and investors and imitate their investments. It is called Copy Trading.
Learn from their actions, what they buy, when they buy it, and when they sell. Try to find the reasoning behind their actions.
For example, Warren Buffet sold all his Airline holdings because he believed it to be a tough industry due to Covid.
But exercise caution. Do not blindly follow anyone just because they are rich and famous. Everyone makes mistakes.
FIRE Lifestyle - Financial Independence and Retiring Early has been advocating for investments in Mutual Funds, Provident and Index Funds, as much as you can, to attain a comfortable and early retirement.
Time and time again, simply investing in SIPs every month has been proven to be one of the best ways to accumulate wealth.
Keep track of the Share Market
There are news channels especially to cover stock market news worldwide, such as CNBC, MoneyControl, Bloomberg, and Morningstar. Watch them for 20–30 minutes regularly.
You would also learn how other factors, like oil prices, forex reserves, budget, political stability, earnings expectations, etc., affect the prices of stocks.
Start Investing by Buying Your First Stock
All you need is a Demat account. There are dozens of brokers. You need to find the one for you based on factors like Brokerage and Commission, User Interface, Annual Pricing, Charting Features, and Reliability.
You will be trusting the broker with your life savings. Make sure they are reliable. Some brokers have been known to use your funds without your permission for personal reasons.
Consult your seniors, colleagues, professionals, and mentors and make sure to read online reviews.
After you find it, open a Demat account. The Process is as simple as opening a Social Media account, except you have to link your PAN Card and Bank Account. It only takes a few hours.
Once this is done, you can purchase stocks. It sounds like online shopping, but you have to do your due diligence before buying anything.
The best way to learn is to do.
Conclusion
The stock market may seem like a labyrinth, and it is, but once you enter it, one step at a time, you'll realise that it is the greatest money-making machine in the world.
The Stock Market allows you to compound your money. Compounding means receiving interest on the interest. It allows you to make money while you’re sleeping. It opens the opportunity to retire with peace and financial security.
And the sooner you start, the more wealth you can amass. If you start by investing just Rs 10,000 a month when you’re 25, by the time you’re retiring at 60, you would have 30 Lakhs.
But if you start investing the same amount, when you’re 35, you would only have Rs 10 Lakh when you’re 60. Let that sink in. You’re losing money every day by not investing it.
If you’re to take one thing from reading this, let it be “Invest Now”.
I hope you liked our article on how to learn trading, if you have any comments or suggestions do share them in the comments below.
Frequently Asked Questions
1. Can I buy shares without a broker?
No, you cannot. You need a Demat account with a broker registered with SEBI. The shares you buy are linked with your PAN Card. When you file an ITR return at year-end, your PAN Card details would be used to track the profits you made from the stock market and cross-check it with the profits you disclosed.
2. How can I open a Demat account?
- 1First, you need to identify a broker.
- 2To select a broker, you should consider factors like brokerage costs, services offered, pricing, and reliability.
- 3Ask your friends, colleagues, and industry veterans for recommendations.
- 4Be sure to check the reviews online before selecting your brokerage firm. It’s a lifelong commitment. You would be investing lakhs and crores with them over the next 50 years and more.
3. How can I purchase shares?
- 1First, you need to make a Demat Account with a broker. We prefer finding a reliable online brokerage firm.
- 2Once you have opened up an account and linked your bank account, you can use the money from your bank account to directly buy shares, mutual funds, commodities, or anything else you’d like.
- 3You can select the number of shares and the amount, the delivery schedule, etc., at your broker’s website/ app.
It’s intuitive, just like shopping online.
4. How can I buy shares offline?
- 1The first step is making a Demat account with a Broker. All brokers allow you to buy shares offline.
- 2Once you have made a Demat account and linked your bank account, you can simply call your broker on a the phone and tell them to buy or sell shares from your account.
