How to Invest in Share Market in India?

Home > Education > Share Market > How to Invest in Share Market in India?
How to Invest in Share Market in India?

How to Invest in Share Market in India? Very big question. Here you will find simple answer – what to do or not. Big money and quick profits are attracting investors to the stock market since its beginning. Unfortunately, making money with equities is not always easy. Especially if you are a beginners in the investments, you need to be very cautious about your moves. Though no thumb rules exist for profit-making, certain qualities like patience and good discipline gained by avoiding greed can help you to gain more and lose less.

Starting Steps for beginners to enter into investing in the share market

Step 1. Get a PAN Card

To start the investment in the Indian stock market, the first thing is to get is a Demat account and for the opening of a Demat card PAN card is the necessity. To get the PAN card the thing which is needed to be proceeding are:

* Go to the NSDL website and register yourself by submitting your details.
* Arrange the documents which will be required includes: Identity Proof, Address Proof, Date of Birth Proof, 2 passport size photographs
* Courier this documents to the Income-tax PAN card service office
* Afterwards once the application is approved, the PAN card will be delivered to the residential address

Get Online Pan Card : NSDL Online Service

Step 2. Choose a Stock Broker

For choosing the stockbroker to initiate the trade for the stock market the first thing that is required is to understand how the stock market works. There are two types of brokers- Full-service Brokers and Discount Stockbrokers.
There are multiple aspects to be considered while selecting the stockbroker and it includes: Brokerage fees, Trading platforms, Customer service, trading margin limits etc.
You would also make sure about what you need to be a trader or a long-term investor.

Step 3. Apply for a Demat Account

Once you are done with the selection of the stock market then the step is to open a Demat account. For opening the Demat account the documents that are necessary for any of the SEBI registered stockbroker in India:

* PAN card with a valid photograph
* Proof of Address
* One photograph
* Bank Statement
* Crossed cheque

For NRI’s documentation are:

* Reserve Bank of India copied Approval through a PIS permission letter for the account opened in a designated bank
* Passport copy
* Proof of foreign residency
* Copy of valid visa
Once you have submitted the proper documentation to the stockbroker, it generally takes 1-2 business days to open a Demat account.

More Detail About: Open Demat Account

Step 4. Read Stock Market Investing Books

Before you start to invest or start to invest your capital in the market then it is necessary to understand where the money is invested in the sense to understand the returns on it. Reading more books on investment makes the basics more clear and you can easily make the profits while easily getting the basics.
Make a habit of reading books regularly so that you can come across the new topics to understand daily. Nobody is perfect the one who learns to get the chances to earn more.

More Detail About: Technical Analysis Books

Step 5. Follow the Market Every day

Once you follow the habit of reading and clearly understand the basics of the stock market then it is necessary to follow the market and clear your understandings that you have read before on it. Also, understand the behaviour of the stocks and how they are performing.
There are many options available to track the market include:

* Online resources
* Television
* Newspapers
* Paid online subscriptions

Website: TradingFuel

Step 6. Create your First Strategy

Since by now as you have already learned about the basics and implied it in practical market. By reading more books and daily getting new ideas now you are ready to make your strategies and to work on that strategy.
With the first strategy, there is a possibility that you will be under-confident or nervous to use this for the trades but after doing the trading on the strategy you will be confident and work more on this pattern.
If a thing goes wrong you will learn something and will find another best strategies for yourself and if you win in the market then you will surely make some money from it.

Learn, Intraday Trading Strategy

Step 7. Learn and Keep Tracking Record

Always make sure that you should learn daily something and to keep the record in the market because your capital has been invested and you should eye on it. Many potential opportunities come with the movements of the markets.
Always keep positivity while learning and doing trading, never let the loss or the emotions impact you while making trading.

So what is the right way of investment in Indian share market? We have shared here some golden tips in form of Do’s and Don’ts for investors in the equity market.

List of Do’s and Don’ts for Invest in Share Market

We are sure this set of rules will help you make your overall profit scenario quite successful.

Do’s in Indian Share Market

  1. Deal with the brokers who are holding a valid registration of SEBI. This ensures the best safety of your investments.
  2. Fill up all your details completely and accurately in the Know Your Client application form.
  3. Instead of depending upon on your broker entirely, remain alert on the genuineness of the transactions and verify any suspicious transaction using the official BSE website.
  4. Make sure that you are risking only in proportion with your risk bearing capacity.
  5. A good research of the company before investing is a key to success. Research sources can be other vendor’s databases, business magazines, and official websites of stock exchange.
  6. File your complaint against any BSE listed firm only after confirming the jurisdiction.
  7. Make sure that you are holding money before you decide to buy and securities before you decide to sell in the stock market.
  8. Always make monetary transactions with the intermediaries only through the valid and normal banking channels.
  9. Keep copy of all the documents you send to registrar or broker or intermediary with the record of the date and purpose.
  10. Always be sure about obtaining the contract notes from your broker.

DON’Ts in Indian Share Market

  1. Never get carried away by greed and do over investment.
  2. Avoid concentration of your investments. Instead, try to diversify your portfolio. Hence, a downside in price of one or two shares will not affect you too much.
  3. Do not deal with unregistered brokers or sub-brokers.
  4. Never keep stock dormant and unattended after buying. Keep tracking updates on the company regularly.
  5. Don’t follow blindly the updates of media and other rumors without your own research to avoid hasty investments.
  6. Do not over invest in very limited number of sectors.
  7. Avoid signing any documents with any intermediary without understanding the conditions properly.
  8. Never get carried away with the expectations of high returns and guaranteed returns on your investments.
  9. Don’t make investment on the basis of the general approvals or registration certificates of governmental agencies owned by the company.
  10. Don’t compromise on getting documents from any trading member, intermediary, broker, and registrar related to any transaction.

These are general rules to be followed to invest thoughtfully in the Indian share market. However, keep track of the price movements and use your experience and judgement skills as well. If you are a newbie investor, give more time to research the stocks you are selecting before making any investment.

After Opening Demat account and keeping tracks another step for a fundamental investor to point down while investing in Stock Market

1. Screening and Filtering the correct stocks using Financials
2. Select only the company which you find easy to understand
3. Search for companies with a sustainable moat
4. Find Low Debt Levels Companies
5. Use Financial ratios like RoE and RoCE to identify the right stocks.
6. Find the Right Price to Buy the Stock

We hope that’s you get all information about ” How to Invest in Share Market in India?” If any query you can contact on Mail.


Tradingfuel © 2024 | All Rights Reserved

    Join Free Class

    Join Free Class