lanning to enter into a business with no material commodity to sell or purchase, or searching for an extra source of income to supplement your salaried income but do not have the time to work on the ground as a businessman? Are you a homemaker looking for sufficiently challenging opportunity to earn without the daily routine of going to an office? There may be several such reasons which prompt you to try your luck in one of the most volatile markets, which actually decides how well business enterprises will do in their business.
We are talking about trading in the stock market which gives value to the ownership shares of the listed companies. Trading in the stock market means you are purchasing a definite number of shares or IPOs of a company, mutual funds, index funds, currency for a particular price. The price is volatile subjected to change anytime that will either decrease or increase the worth of the shares or securities in which you invested. If you plan to sell your shares, the money you will earn out of it depends on the current market value of the shares. If the company’s share value goes down compared to the value at the time of your investment, then you lose money or else you will gain profit.
Your success as a stock trader depends on your skill or rather presence of mind to decide which securities to purchase and when to sell them. If you are inexperienced, it is always wise to take the service of a stock advisor or stockbroker unless you are fully confident of your stocking analysis and knowledge about finance and economics of share markets.
How to start with trading
It depends on what kind of a trader you are and what is your expected return on the investment. You may be a risk taker, safe player or someone ready to take certain low-level risks. You may be aiming to make some quick money over a short period of time or want to invest, wait and watch for longtime investment and profit. Your budget for investment also has a strong influence on the trading and shares you chose. Patience, observation, and timing are the keys. As a beginner, it is safer not to go for speculation based trading, which is buying shares based on rumors or random gut feeling. You have a high probability of losing your money, but some lucky people do get really lucky and finish off with making more money.
Always do proper background research, close analysis of the market, key shares, trends, popular sectors and the matches for your budget. Open a Demat account and register in a trading platform of your choice. Demat accounts may require annual maintenance and trading fees, which vary depending on the trading company.
After a thorough analysis of trend and research reports, decide on the sectors you want to invest. It is wiser to invest in multiple sectors because you never know when a single sector-based policy may cause the shares of all the related companies to plummet. Become well versed with the ticker symbols of the companies to get that extra speed.
Instead of buying shares of the same company, prepare a list of different securities showing more gain. Again this depends on whether you want to invest in old stable companies for long-term trading or relatively newer ones going through a surge in demand, for shorter and quicker money making. From the list, depending on your budget and how many shares you can buy, start trading on the stock trading platform.
Once you invest, never lose track of the market. Keep yourself updated about the trends and changes and take timely advice from your stockbroker, if you have one.
Stock trading platform
It is an electronic software provided by stockbrokers for the traders to purchase, manage and close market shares, currencies, commodities etc. Trading platforms may be free or available at discounted rates depending on the funds maintained by the trader and the number of trades performed in the specified time limit. Choosing the proper trading platform is very important for reaping profits, as an advanced reliable platform will have fast quote updates in the range of seconds, simplicity of usage, good customer care service and assistance.