Stock Market Trading Online FAQs

1) How do I start Trading? or How to trade in stock market?

To begin with trading, you will require a "Trading" and "Demat" account. 

 

This account will be linked to your bank account for online money transfer. 

 

The leading Stock Brokers in India at the moment are "Zerodha" and "Upstox." Open an account with any of them to start trading (the account opening process is online, and it takes only 5-10 minutes).

 

As an Indian Trader/Investor, the two markets that you can trade are:

  •  National Stock Exchange (NSE)

  •  Bombay Stock Exchange (BSE)

 

Stock Market Trading is buying and selling shares of publicly listed companies. Some popular stocks in India are: HDFC Bank (HDFC), Reliance, TCS, Infosys, SBI Bank, ITC etc.

Some of the popular stocks in America are: Apple (AAPL), Facebook (FB), Microsoft (MSFT), Amazon (AMZN), Google (GOOGL), Netflix (NFLX), etc.

2) How can I learn share market? or How do beginners make money in the stock market?

There are many ways to learn Trading, such as Books, YouTube videos, online courses, etc.

But “Books” are easy to find, provide a lot of information, and are inexpensive compared to the costs of classes, seminars, and online courses sold across the web. 

You can follow the below steps to learn to trade:

 

1. Read a few good books on Trading (One can get the list of Top-10 Trading/Investment books here)

 

2. The first time, read in general (to understand the concepts). Remember, good books don't give up all their secrets at once!

3. Next time, read and try to locate the information on charts. It can be an indicator pattern or a piece of a fascinating story from the book, investment suggestion, etc.

4. Sit quietly for some time. Then think about what type of trading suits your personality, whether it's intraday, positional trading, breakout trading, or investment.

5. Suppose say you started liking towards Breakout Trading. Then study in-depth about Breakout trading. Read good books on Breakout trading, follow successful traders, and take advice from them. 

6. Once you get a fair idea on breakout trading, then finalize one trading system. A trading system should define entry price, stop-loss price, and profit booking price.

7. Once you have a trading system, check the system with past data. If it offers a minimum 50% accuracy and 1:2 risk-reward, it is an excellent system. If not, start from step-5 once again. Clarity is crucial at this stage. Remember 'Clarity' and 'Simplicity' are the antidotes to complexity and uncertainty.

8. Then start taking trades based on your trading system. But ensure not to risk more than 1-2% of your trading capital on any trade. At this stage, never argue with your trading system.

9. In this process, you will commit some mistakes. It would help if you studied your mistakes as it has a lesson. Remember, there is a big difference between "a good trade" and "good trading!"

10. Next, avoid making past mistakes in trading. When you make a mistake, you can only do three things - admit it, learn from it, and don't repeat it.

 

We should be RIGID about our RULES and FLEXIBLE about our EXPECTATIONS from the market.

BUT the problem is we are RIGID about our EXPECTATIONS but FLEXIBLE about our RULES.

My Books

How to Make Money with Breakout Trading?
Mind Markets and Money - Best book on Intraday Trading
Stock Market Book for Beginners

3) What are the types of Trading?

There are many types of trading. Some are listed below:

Day Trading

In this form of trading, traders buy and sell the stocks on the same day. A trader involved in day trading, needs to close his transactions prior to the day’s market closure. 

 

Day trading requires high proficiency and skill in the market. Therefore, it is performed mostly by experienced traders.

 

Swing Trading

In this trading, traders hold the stocks for a few days. The basic idea is to ride the profits of one complete swing in the sideways market trend. 

 

Positional Trading

In this trading, traders hold the stocks for a few days to weeks. The idea is to get the benefit from the major movement of the trend. 

 

Breakout Trading

Here, traders aim to capture good moves in short duration. 

4) How can I invest in share market? or How to invest in the stock market?

When it comes to investing, there are two schools of thought:

  • Fundamental Analysis and

  • Technical Analysis

 

Fundamentalists are more concerned about the company's management, various products, Sales, Price to earnings ratio, Balance sheet, Cash flow, Debt to equity ratio, etc. Broadly they are concerned about qualitative as well as quantitative aspects of the Company analysis.

 

Read this article to get more information about fundamental analysis.

 

 

Technical Analysts consider the analysis of past behavior of prices to interpret their study. They believe that the price contains all the information, and it's enough to analyze the price chart.

 

Read this article to get more information about technical analysis.

5) Which is the best website for share market? or Which stock trading site is best for beginners?

There are many good websites to learn trading and investment. Some are mentioned below:

Investopedia

 

Zerodha Varsity

Money Control

 

Investing

Screener

 

NSE India

 

 

© 2020 by Indrazith Shantharaj.