Updated: Apr 25, 2022
The most significant advantage of stock market trading is you are the boss of your business, and you can work from anywhere and anytime. Because of these reasons, many youths and working professionals start checking Sensex and bank nifty live in the morning session of the market every day.
The market rewards only the dedicated people, and it punishes all the people who don’t have discipline with their trading. Hence, it is better to explore all the aspects of the share market before taking serious bets.
What is Stock Market Trading?
Stock Market Trading is all about 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.
To begin with trading, you will require a "Trading" and "Demat" account. Aadhar, pan card, and income proof documents are essential to open a Demat account in India. This account will be linked to your bank account for online money transfer.
As an Indian Trader/Investor, the two markets that you can trade are:
National Stock Exchange (NSE)
Bombay Stock Exchange (BSE)
There are many types of trading. Some are listed below:
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.
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.
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.
Here, traders aim to capture good moves in a short duration.
If you are a beginner, below 10 simple ways are helpful to learn stock market trading.
Step-1: Read Good Stock Market Books
“A book is a dream you hold in your hands” – Neil Gaiman
Amazon has millions of books on stock market trading. A good book will deliver useful information in a simple way. Any book with 100+ reviews and an average rating above 4.0* is a good book as per Amazon standards.
Some of the famous stock market books are ‘Trading in the Zone’, ‘Market Wizards’, ‘Trade like a Casino’, etc. One can check the best top-10 books on stock market trading to elevate their skills.
When you pick up a trading book, please read it in general for the first time to understand the concepts. If the content is good, then reread it and identify the same information on the charts.
Now try to identify whether you started liking any forms of trading among price action trading, breakout trading, investment, or swing trading. If you like a concept and suit your personality, go in-depth on the same idea by reading a few more advanced books on the same topic.
One can also read my best-selling book ' How to make Money with Breakout Trading'
Step-2: Refer to Trading Blogs
Many profitable traders share useful information and their experience through their blogs. It is a good idea to read all the content and subscribe to such blogs so that you will be notified when they upload new content.
Below are some of the useful blogs on the share market:
Step-3: Finalize a Trading concept after Back Testing
“All you need is one pattern to make a living” — Linda Raschke
A person starts to learn to drive a car. In the learning process, he has two choices:
Stick to one car every day until he becomes comfortable driving the car
Try a different car every day
Which one do you suggest?
Most people suggest option-1. Isn’t it?
The reason is simple.
Every car comes with different features, and it’s nothing to do with driving skills. If you know how to drive a car, you will drive most of the cars with slight adjustment and caution. But while learning to drive a car, it is better to stick to one car.
The same logic applies to trading as well.
It is better to stick to one trading method which suits your personality. There are many trading methods like Breakout Trading, Price Action Trading, Swing Trading, etc. Hence, it is better to perform complete backtesting on one trading method for many years to have absolute clarity on the trading concept.
Any backtesting procedure should arrive at two things – 1) Success Ratio and 2) Risk-Reward