Warren Buffett, the legendary investor, defines investing as “the process of laying out money now to receive more money later.”
The purpose of investing is to deposit your money into one or more types of investment options in the hopes of increasing their value over time.
Thousand of new entrants in the stock market try their luck every day. The sad part is, most of them end up losing money. They never actually find their full potential. What is the common among people who fail miserably doing stock trading? They lack the basic skill and knowledge needed to swing the odds in their favor.
If you have a solid plan in place and you are spending time learning the basics of stock trading, you can increase your chance of earning profits.
What exactly is stock trading and how does it function?
Stock trading is defined as buying and selling shares from the secondary market. That’s the reason understanding the primary market and secondary markets is crucial.
Primary market
Corporate and businesses issue new securities and make them available to the general public in the primary market. In the primary market, the two parties involved in the transaction are the issuers and the buyers.
Secondary Market
In the secondary market, you can buy and sell shares that have been assigned in the primary market. The vendor and the traders are the two parties involved in the transaction. In this case, the stock exchange or broker acts as an intermediary in this market.
How Do I Begin Trading as a beginner in the stock market?
The following points will help if you want to start stock trading in 2021:
Open a Demat account
To trade or invest in the stock market, you need to open a Demat account or brokerage account. You cannot trade on the stock market without a Demat account. The Demat account functions similarly to a bank account and holds funds for trading. The securities you purchase are kept in an electronic Demat account.
Understand stock options
The price of a stock fluctuates in response to news, fundamentals, technical analysis, and other factors. You need to improve your understanding of stocks and stock markets by learning about these topics.
Stockative is the first social media platform for investors and traders in India. Here you can sign up using your Gmail, LinkedIn, Twitter, or Facebook login credential and keep yourself updated about the stock market news and analysis.
Stockative allows you to connect with expert traders and help you trade wisely, and earn profit.
Bids and asks
A bid price is the highest price at which you are willing to buy a stock. The ask price, on the other hand, is exactly the opposite. The minimal price at which the seller is willing to sell the shares is represented by ask price. It’s critical to choose the right bid and ask prices to achieve a profitable trade.
Stock fundamental and technical knowledge
As a beginner in the stock market, you need to plan your trades by studying the fundamental and technical evaluations of the stock.
Fundamental analysis is a method of determining a security’s intrinsic value. It takes into account a variety of factors such as profits, expenses, assets, and obligations.
Technical analysis, on the other hand, analyses the stock based on its historical price and volume chart to forecast its future potential.
Figure out how to avoid the loss
The stock market’s basic nature is volatility. As a result, beginners need to grasp how to avoid losing money. You need to establish a stop-loss price while completing a transaction to limit your losses.
Connect and ask an expert
The stock market is unpredictably volatile. Nobody can anticipate the price of a stock. Taking the help of experienced person help beginners make the best trading decisions. It helps you in making the best decision possible.
We at Stockative is a social media platform for stock traders and investors where you can connect with experts and follow their trading patterns. This helps you to learn the nitty-gritty of stock trading and earn money.
Begin with the safest stocks
A large financial loss early on could shake your confidence. Starting with the less volatile share option is a good idea.
You may get off to a slow start but these stocks are more likely to maintain a positive performance even in the face of adversity.
Conclusion:
Investing in the stock market can be challenging. Opening a Demat account is the first step toward trading success followed by gaining a thorough understanding of the stock market.
We at Stockative are India’s first social trading and investment network for beginners and experts.
Want to learn from and network with experts as you begin your journey as a stock trader? Sign up NOW!
