How to Trade in Indian Stock Market? : Newbies in the Indian share market have all reasons to go through this information. We present the most basic needs to start trading in the stock market. If you are new and confused about the market, give a start first. A thoughtful planning and knowledge will help you to earn stable profits in the long run.
Here are the major steps you need to take for trading in shares. Get clear ideas about the basic requirements and must know about How to Trade in Indian Stock Market. Also, use our blog to get knowledge of different investment vehicles. Know equity shares, futures and options, bonds, debts, mutual funds, and IPO.
Table of Contents
Basics of Indian Stock Exchange
The Indian share market currently comprises two stock exchanges.
- BSE – Bombay Stock Exchange
- NSE – National Stock Exchange
All the depository participants are registered with NSDL and CDSL. There is no specific formula to earn huge profit in any of the exchange. Following safe trading techniques and experience of understanding the trends make you a winner.
Types of Trading in Indian Share Markets
Intraday trading and delivery trading are the two major types in India. Intraday trading is a single day trading. An investor has to square off all the positions before the market closes. Any buy or sell transaction happen in a single day.
Delivery trading refers to trading which extends beyond one day. It is also very secure. You can buy stocks and retain them for more than a day. Transactions occur on next day. The brokerage in the case of delivery trading is very high. But the main benefit is the chances of loss is very less compared to intraday.
Guidelines to Start Trading
If you are planning to start trading in Indian stock market, here is a complete step-wise guide. These are the simple requirements before starting.
- Open a trading account in share market.
- Open a Demat account.
- Link your trading account to your bank account for credits and debits.
- Select your investment broker. Make sure the broker has registration with SEBI.
- Set your risk tolerance limit and start investing.
- Select low risk products initially.
- Gradually, diversify your portfolio.
When you are a bit stable in the trading, you can take your investment to a higher level.
How to Decide Investments in Share Market
Choosing the right product and right company for investment is a tough task for any investor. Yet, it is simple if you follow certain rules and tools.
- Investment Amount – First of all, set the amount you are able to invest. Never invest more than your risk taking capability.
- Financial Analysis– Use experience and market analysis of your own and other financial experts. Don’t follow rumors while determining the investments. A greed of huge profits may end in disaster. Use the company’s reports and other information to judge its financial strength.
- Charts and Indicators – Besides the financial analysis of the company, technical analysis is important. Use charts and other tools to get an insight into the movement of the prices. Study the movements of shares when the overall market was performing well. Volume charts and past movements of the prices help you to predict the trends.
Follow your judgement as well avoid going against the market trends. Also, insist on having regular monthly reports from your broker with documents. We hope that’s you like our article of ” How to Trade in Indian Stock Market “.