Stock Market or Share Market is a great platform where you can invest your money to get handsome amount of returns but you need to invest in the stocks of good companies and at good price. In this article, we are going to discuss how to invest in stock market or share market.
First of all, let us understand some basic things regarding the stock market so that it will be very easy for us to invest in stocks.
What is Stock Market?
Stock Market is a platform for markets and exchanges where buying and selling of shares on daily basis or periodically occurs of publically held companies. One can buy or sell the stock on various trading platforms e.g zerodha, upstox, angel one etc. By
Types of Investments in Share Market
There are a lot of ways to invest in share market which are given below:
- Mutual Funds
- Future and Options
One can invest in the stock market on any of above ways but before investing he or she might get knowledge about that kind of market.
How to start Investing in Stock Market
Now we will see how can we start investing in the stock market. There are a few steps that we have to follow before investing in this stock market:
- First of all, you need to open a demat account. There are many brokers available online by which you can open your demat account or you can go for authorised bank or the financial institution or broker to open your demat account.
- During the demat account opening, you need to Submit the photocopy of required details like PAN, AADHAR, photograph and other relevant documentation asked by broker.
- Then the verification will be done against your documents and if all things ok, your demat account will get open.
- Then you need to select your investment style.
- Some people for for short term and some go for long term as per their trading or investing style but as a beginner one can go for long term investment plan.
- Then you need to manage the portfolio on regular basis from which stock you will exit or buy any new one.
Ways of Investment Strategies
There are many ways by which a trader or invester take a decision on buying and selling. Few of them are given below:
Moving Average Crossover Strategy
Many people buy the stocks or sell stocks on the basis of moving average crossover strategy. Generally, it means that whenever a moving average crossover another moving average then there is a buying or selling signal. On the basis of that traders or investors take a decision to invest in stocks. For example, if 10 EMA crossover 20 EMA in upper direction then it is buying signal for many traders and if 10 EMA cross over 20 EMA in downward direction then it is selling signal for many investers of traders.
Some people with experience becomes master on reading the stock charts. There are a lot of candlesticks that is being used by these kind of people who trade on the basis of price action only. Price action generally means that how is stock is behaving at a particular price.
Institutional Buying and Selling
Some people really good in judging the institutional price by reading the price action. They check whether there is any institute present who is buying in stock or selling in stock. On the basis of that many traders and investors judge the stocks whether they will go up or down.
Most of the people use indicators to invest or trade in this stock market or in the index charts. The most common indicator that has been used are RSI, MACD, Moving Average Crossover, and VWAP for intraday etc.
Ways of Investment
Short Term Investment
Short term investment is trending now a days as many people are getting knowledge how the stock price moves. They generally do the swing trading which means they buy a stock and sell it after some days as per there risk reward ratio and profit margin.
Long Term Investment
Long term investment is evergreen and people who do not have much time and they have money to invest the invest for the long term. There has been many people who has invested for the long term and become millionaires but it required patience as it will take years to get fruitful benefits.
To make money quickly, many people are opting for the intraday option but it is risky for the new people or new traders who are just beginners for the market. So it is advisable for them to go for short term or long term investment rather than intraday. Intraday generally means that selling or buying the stock on same day.
Frequently Asked Questions
How do I start investing in the stock market?
1. Open you demat account and it should be linked with the bank account.
2. Then choose your trading strategy
3. Then book the profit of loss as per your trading or investing rules.