Suppose in 1997, you bought 1000 rupees shares of Reliance and by now you would have kept that shares till 2020, then today you would have had 8LAC rupees instead of 1000 rupees. If you had invested 1LAC you would have been a millionaire today. This is the power of the stock market.
Therefore you need to know about the share market and also there are two types of trading. One is the long-term stock market trading. And the second one is the short-time trading. Let’s see How to Invest in Stocks: A Beginner’s Guide and Money Making Tips.
Table of Contents
Basics of Stock Market
Basically, you need to know about what is the basics of the stock market. If you know the basics of the stock market completely, then you can easily earn money by becoming your self-knowledge.
So, “What is the meaning of the Stock Market?” Firstly, as you all know the meaning of the market, therefore, we don’t need to discuss the market. So, what are stocks?
Let’s say I own a The Trendy Business company. And the company has not taken money from anyone yet. But I want people should invest money in my company, they should become part-time owners, a little part of my company should go in their pockets. If you are a part-time owner, then every year a little money from my companies’ share goes into their pocket.
And when I feel that my company has grown enough. Now I want people from all over the country to invest in my company, then I will do an IPO (INITIAL PUBLIC OFFERING). I will say 51% (some percentage) of my company’s shares will remain with me and I will put the remaining ones in the stock market so that you guys can buy. This process called Initial Public Offering.
In deep, I will say that I will get my company here from here in some time and then you invest, you take a little part of my company. When the profits of my company come out, I will earn myself from my companies. And I will put some money in your pocket with that income.
How it’s work?
In this way, a company’s rating goes up or down, it shows your profit or loss. People felt that if this company is very right then the price of the stock of the company will go up. According to that, suppose a person has bought a stock of companies on the first day, they must have bought for less money.
Suppose that one has bought a stock for 10$. Going forward, the reputations of companies have increased, the power of the company has increased. And due to increase in power and reputations of companies, shares of 10$ today are worth 20$. The first person who had put 10$ got a profit of 10$. If he had bought more shares, he would have earned many times more profit.
If The Success Rate is Low,
The Stock Value Also Decreases.
So, this is the basic logic of the stock market. I hope now, you know the basics of the stock market. So, let’s see How to Invest in Stocks: A Beginner’s Guide and Money Making Tips.
A Beginner’s Guide
First of all, you need to know two things. Investment in the stock market and trading in the stock market are two completely different things. The word investment is used for long-time(many years) holding stocks and trading is used for a short time.
Firstly, is “What are the types of trading in the stock market?”. Secondly, make sure that you have complete knowledge about some words which are used in trading daily like Nifty, Sensex, BSE, NSE. Make sure you have the complete meaning of those words.
In short, Trading is by buying the stock for less money, when it becomes less expensive then selling it makes a profit. Mainly there are 4 types of trading in the stock market. How long you buy and hold a stock is based on that. the types of trading are:
In this type of trading, we buy the stock for a few minutes, and as the price increases, we can earn profit by selling it. If we buy 10000 shares of a company for each 100 rupees and as soon as the price rises to 100.50 and we sell it and make a profit of 5000. It’s called Scalping.
In this type of trading, we buy the stock for a few hours, And before the market is closed on the same day, you can earn profits by selling shares.
We buy stocks for a few days and we can earn profit by selling stocks in a week or two weeks. We call this kind of trading Swing.
In this type of trading, we buy stocks and keeping hold of them for a few weeks to months. And we can earn profit by selling stocks. it’s called Position Trading.
Meaning the type of trading you want to do is based on you. Do you have to buy or sell shares of some big company for 4-5 years(Investment) or do a lot of money by trading daily(Short-time Trading)?
Learn The Meaning of These Words
Learn The Meaning of These Words, Which you should know about, Nifty, Sensex, BSE, NSE. What is the meaning of all these words that you hear in the news? let’s figure it out.
- BSE: Bombay Stock Exchange
- NSE: National Stock Exchange
If you want to trade stocks in the past, then you will have to go at the BSE or NSE. You have to go there and trade it. But today you can also do business sitting at home through the internet.
Now know the meaning of Nifty and Sensex
- Sensex: Stock Exchange Sensitive Index
- For example, suppose this is the biggest 30 companies of this country, you are using the products of companies every day. And also you are filling the money in their pocket, which is the 30 most powerful company in the country. They have a Sensex rating based on performance. The company’s performance and what people think about it, both of them ensure the Sensex rating. Sensex is attached to BSE.
- Basically, it gives the representation of the country. How much are the people of a country thinking? What is the spreading power of a country’s people? What are people doing with their money?
- Nifty: National Fifty
- Just as the Sensex gives results by including the top 30, the Nifty gives a nifty rating by including the top 50. The same rating remains similar. Nifty is attached to NSE.
How Much Should you Invest in Starting as a Beginner in Stock Market?
How you are investing stocks that give you continuous profit is more important than how much money you are investing in the stock market.
For example, If you start with 1000(per month) rupees in starting, which I think most of the people of us can afford. You should increase these 1000 rupees by 15% every year which means invest 1000 rupees every month for the first year (12000 per year). Next year, you invest 1150(per month, 13800 per year) rupees, in such a way that every year you increase by 15%. As soon as your earning starts, you get out of the student’s life and apply a few rupees, and if you increment 15% for the next 25 years. And you get a minimum 15% return from your investment(usually return rate is around 17% to 19%), then you will have 1crore rupee in your bank account after 25 years.
You can calculate this from the SIP Calculator.
What is the key in this? Firstly, you have to invest for 25 years continuously. Secondly, you have to keep increasing the 15% amount each year. Thirdly, you should have a 15% return. Don’t you think this is a fantastic strategy? but, it is not really easy to keep doing it continually, therefore most people will not achieve success in this strategy.
How to Start?
A process of starting investment in stock market is really very easy in today’s trending world. You need 3 documents:
- Aadhar Card
- Pan Card
- Bank Account
After that the all process is online today. Nowadays there are lots of discount brokers, discount brokers because they take 0 brokerage fees. Today, there are many platforms available online like Groww, Upstox, Zerodha, etc. If you want to do investment in the stock market then start your demate account from any above mention site and start investing. Before you start you should know how to invest in stocks and a beginner’s guide for investing.
How can you earn regular income through Trading?
Yes, For sure it is possible to earn regular income through trading, but it is not so easy. First of all, we need money for investing money in trading. Because in trading, we want to earn good money by small changes in the price, therefore we need to buy more shares.
Make sure that you have good knowledge of technical analysis to understand the pattern of price and at the right time, we will earn money by buying and selling stocks. In trading, the most important thing is to keep learning from your mistakes and never give up.
Learn Stock Market for Beginners
Here we are giving you some useful tips for how to invest in stocks: A beginner’s guide and learning the stock market. But you should know that as much as you take experience and keep learning from your mistakes during trading you can be a good trader.
- Read books daily
- Rich dad poor dad, Learn to earn, The education of a value investor
- Do online courses
- Take expert advice
- Take advantage of the expert’s experience.
- Analyze the market
- Start learning in it.
- create demate or trading account
- For getting experience.
- strat trading
- Trading in your comfort zone.
- keep learning from your mistakes
- Your mistakes are your biggest teacher in life
- Never give up
- Keep developing your self-esteem.
Mistakes To Avoid In Stock Market Trading
According to experts, beginners should not make mistakes which we mention below. see, how to invest in stocks: a beginner’s guide. Read it carefully it can save your lots of money and time also. It helps you to reduce loss in the beginning.
- Jumping in too The Markets too Early:-
- People jump into this market without knowing it well. Unless you understand the behavior of this market very well, don’t invest Without understanding all this. If you put money without any knowledge for sure you lost most of your money.
- Trading Without Stop Loss:-
- We should never make the mistake of trading without imposing a stop loss, it can ruin your entire month’s earnings from a wrong trade.
- Adding to a Lossing Position:-
- If the prices of some of your stocks are falling and still you invest more in them, then it can prove to be your biggest mistake.
- Risking More than You Can afford to Loss:-
- 30% of the traders waste their entire money in 3 days of starting by using leverage. Don’t use high leverage.
- Poor Risk: Reward Ratio:-
- They lose a lot when they lose and when they profit, they do a very small profit. So, this is a poor risk: reward ratio.
6 Tips for Buying First Share
6 tips that will help you in buying your first stock, which will give you very good benefits.
1. Check Company’s Track-record
You must have often seen in the news that RBI fined the company or sent a notice to this company. Most of the quality offering companies are not involved in the controversy. So before investing, you should know the history of that company completely and then invest.
2. Check Management’s Track-record
Just think that you are investing in some company and you are afraid that if the management of the company ran away with the money? Or if the company is closed? The owner or promoter of the company off the company due to any problem, which will ruin my money. Therefore as a beginner, it is necessary to invest your money in well-reputated companies.
3. Invest in Low Debt Company
The more invested you in the debt-free company, the chances of its bank corruption will decrease, and the chances of giving you more profit will increase.
4. Sales+profit growth consistently
Keep in mind that whatever you invest in general, your sales and profits are increasing. An increase in both sales and profit is very important, only growth of either one is not enough.
7. Return on Capital
You don’t mind investing because of the company’s only profit margin. It also depends on how much return the companies received. The more the company has brought in return from investing, the more profit will come from your investment. therefore it’s not only depended on margin.
6. Customer Satisfaction by Company
In the beginning, invest in a company whose products you buy yourself and use it. Because you can review that product and you know that people will buy this product again or not. In this way you will get more idea about your company and you will know that in which company it would be right to invest.
so, this is how to invest in stocks: a beginner’s guide and below, you can see some useful tips for investing money as a beginner.
Hope you get the greatest benefit from reading the above information. If you still have some doubts about the stock market then you can direct message us. Feel free to ask anything related to business. You can follow all our social media seats to get such interesting information about making money.
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My name is Dhruv Vagadiya. I am an Indian blogger and pursuing the computer science field in L.D. College of Engineering.
I am the CEO of thetrendybusiness.com website. I like to write and aware you about different business ideas.