We all know that trading in the stock market is not so easy as it considered orally, for daily trading in you need to track the market on all basis especially those are indulge in Day Trading / Intraday Trading, Before we proceed lets clear the concept of Intraday Trading:-
“A person or individual who is engaged in purchasing or selling of stocks within the same day is Intraday Trading “
But how can we do it? Is still a question mark for many. For this just follow a very simple top-down approach to understand how the market can behave for the very next day.
For a trader, it is very important to know the next day market for which need to look not only the domestic ques but the global outlook is also very important as the Indian market is on its developing stages.
For an everyday trader, it is essential to know about the global ques along with domestic market So a trader first need to check out the Closing of “US & Europe Market”.
After this, we should check the Opening of Asian Market, whatever happened overnight in US & Europe market will make an impact on the opening of the Asian market.
Once Asian market opened its important for Indian traders to check the opening of SGX NIFTY, it acts as an opening indicator for the Indian market, it also takes the cues from another market ( US & Europe Impact on Asian Market) which leads to indicate the opening of the Indian market.
At last, a trader should check the impact of any News or Data which can create an impact on market should be tracked prior, Impact of any Micro or Macroeconomic news should be considered while one is tracking the market because it may give impact on the same day or can affect later on.
Once a trader is clear about the opening of market the second most important work is to track the stock for trading, No one can directly jump and purchase any stock after just hearing the name though many newcomers do that only as they are not aware of the process.
Points to Remember while Day Trading:-
Volume plays a vital role while you trade in the market so a beginner its better to trade only in liquid stocks or in blue chips & always follow proper research and self-study before taking any trade. The market is inherently volatile in nature you cannot blame anyone for your loss.
One should always be aware of market updates as it actually impacts on the performance of that particular sector/stock.
Many often if you are not clear about the market condition, avoid taking any trades into the market because it's better to sit without trade rather then booking an unnecessary loss.
The Bitter Truth of the Indian education system is that it has completely side-lined capital markets as a subject altogether. The knowledge is not integrated, it is not taught as a life-skill and furthermore, the educational institutions lack the much-needed regulations. This one of the reasons why most of the students are not conscious of the prominent and elite career opportunities present in the scope of the stock markets.
In the recent decade, a shortage of trained professionals in the financial market has prompted the need for specialized professionals in various verticals ranging from stock traders to venture capital analysts.
It is good to see many enthusiastic and young people from other professions are interested in checking their luck in the Stock Market. However, specific precautionary steps are necessary before considering Trading as a full-time profession even if you have decent success as a Trader as the Market situations always change. Besides, I have noticed people attracted to the luxuries available in Trading, and sometimes they plan to jump to Full-time trading to avoid the problems in their current profession.
In India, many young adults refrain themselves from any investing decisions until their financial situation becomes, at least theoretically, more stable and therefore, a small chunk of the population is exposed to the equity investment compared to other developing countries, and we see immense opportunities lying out there in the stock market considering the phenomenal growth in the last decade or so.
As the stock market is one of the key barometers that represent the health of any economy, the growth story of India coupled with the current low rate of penetration in the stock market suggests that there will be increased demand for professionals in this sector.
For people who are interested in making a career in the stock markets, the opportunities are plentiful. For instance, one could work with a buy-side firm such as a mutual fund, hedge fund, pension fund etc., or with a sell-side firm such as a broker, an advisory firm, an investment bank etc.
Apart from the diversity of companies that employ people willing to work in the stock market, the positions for which these companies hire is also just as diverse. For instance, companies hire for the position of a Fundamental Analyst, Technical Analyst, Risk Analyst, Derivatives Analyst, Investment Banker, Mutual Fund Manager, Hedge Fund Manager, Wealth Manager, Economist, Financial Planner, Trader, Dealer, Systems Developer etc. The list simply goes on such as the diversity of working in the stock market.
On the education front, there are a lot of finance-related courses that one could pursue to make a career in the stock market. The internationally recognized ones the Chartered Financial Analyst (CFA) program, the Financial Risk Manager (FRM) program, the Chartered Market Technician (CMT) program, the Chartered Alternative Investment Analyst (CAIA) program, the Certified Financial Planner (CFP) program, Master of Finance, Master of Business Administration with specialization in Finance, etc. Pursuing one or more of these courses opens the door for entering the highly competitive world of stock markets.
Besides these courses, there are a lot of short-term courses that are available in India, such as the ones conducted by the NSE and the BSE. NISM certifications are considered to be the standard in the field of trading and investments. They are recognized by the exchange and many of them are mandatory for market participants.
Commerce degrees such as B.COM, BBA/BBM, MBA, PGDF, PGDM etc. have little to no emphasis on stock markets, trading or investing as a subject. These courses are considered to be a standard, and many undergraduates go on to pursue an MBA hoping for a value-add in terms of their employability, but in real terms, it adds little to no value in terms of the knowledge offered. However, there are a handful of institutes that are good.
However, there is a tendency among most aspirants to complete as many degrees as possible to become more employable. Beyond a point, degrees and certificates don’t matter. Hence, it’s best not to focus too much on the theoretical aspect of finance but rather on the practicality which can only be earned with years of experience.
Financial Markets have grown tremendously in the past decade in terms of participants and volumes but a proper education and training system in this industry is still missing.
Trading in the stock market always seems very easy when explained in a theoretical manner, but is it so?
And the answer is no before we start stock trading in the market we should make it very clear how it can be done.
Before anyone enters into the stock market must clear with this few terms which can help them later on.
Its a market place where already-issued securities trade in an electronic manner from one trader/investor to another trader/investor, via electronic transaction. All the transaction takes place on the Stock Exchange, a place where trader & investors purchase & sell listed securities like Shares Debentures & ETF.
The market run in a hierarchy which makes its function smooth, easy to understand & handle.
Securities Exchange Board of India:- Acting as a regulatory body manages the smooth functioning of the market.
Stock Exchange:- A platform where one can do trading in financial securities via electronic mode, major exchanges are NSE BSE & MSEI.
Depository:- An institution registered under depositories Act 1996 for holding, receiving and transferring securities in electronic form.
Broker:- As defined by SEBI an Intermediary who provide a platform to investors & traders to trade on an exchange.
Client:- A client can be defined as any individual Resident / NRI, group of person, Any Financial Institution Foreign / Domestic.
The basic requirement for an individual to trade in the stock market is a Demat & Trading Account. Which is opened with a broker who provides us with a platform to trade on stock exchanges.
As a trader or investor, you are having to option to trade In the market you can do online trading as well as offline, In the online process, you can directly access through web portal or application through mobile or laptop, whereas in Offline you need to make a call to the authorized dealer in the brokerage firm and the dealer will submit the order on your behalf.
Daily purchase and sale of shares in the market are termed as Intraday Trading, Whereas Purchasing & holding shares for long tenure is termed as delivery trading.
The market actually runs in two trends Bull phase and Bear Phase, when the market goes on high with positive demand & supply is Bull run, whereas when there are less demand and supply is more the market runs in Bear Phase.
Commodities and equities trading is something that has become common in India by now. But a high potential market which most of the traders and investors are unaware of is the currency market. Currency trading holds great potential of earning profits if the traders are able to spot the right opportunity and can use those opportunities for their benefit.
Here are 6 top things you should know about currency trading
The currency market is a market that involves participants from all across the world. The currency market facilitates the buying and selling of different currencies. The major participants of currency trading include commercial banks, the central bank, corporations, various investment management funds, hedge fund managers, forex brokers, and last but not the least investors and traders like you and me.
Currency trading, as the name suggests, is the buying and selling of international currencies. The banks and financial institutions are often involved in the act of currency trading. Individual investors can also indulge in currency trading as it is legitimate. The profit from currency trading is earned due to the variations in the exchange rate of the currencies.
Currency market derivatives comprise of currency futures. They are basically exchange-traded futures contracts. The price of the futures contract is set in a specific currency at which another currency can be bought or sold. It is bought or sold at a future pre-determined date just like in the case of futures contracts. They are also referred to as foreign exchange futures. Currency futures are considered to be financial derivatives as the value of the currency futures contracts is derived from the underlying currency exchange rate. Trading in currency futures calls for the initial margin requirement. If the margin falls below the initial margin requirement a margin call is made to the investor, which means, that the investor will be required to deposit the required amount of money to arrive at the maintenance margin.
Just like an options contract, a currency option is a contract that gives the buyer the right but not the obligation to buy or sell a certain currency at a specified exchange rate in the future. Hence, it gives the right to exercise the contract only if the investor finds the price favorable. This choice is not available in the case of currency futures where the investors have the option to exercise the right.
Trading in the currency market is not only risky but also complex at the same time. Some of the risks involved in currency trading in India are as follows:
Interest Rate Risk
Interest rates have an impact on the country’s currency. The difference in currency values can cause dramatic changes in forex prices. Hence, the interest rate plays a potential risk in currency trading.
Leverage Risk
Currency trading is different from equity and commodity trading. It also requires a margin amount as a small investment from the investor. This benefit of leverage allows the traders to have access to a large number of trades. Even a minor fluctuation can result in levying an additional margin requirement to be maintained by the investor. Hence, market volatility paired with aggressive leverage can be highly risky when talking about currency trading.
Credit Risk
The credit risk is related majorly with the banks and financial institutions and has an insignificant role to play in the case of individual traders. Credit risk is when a voluntary or an involuntary action from the counter party results in the non-repayment of the outstanding currency position.
Counterparty Risk
The counterparty is the investor’s asset provider. The risk caused due to defaults in the transactions by the dealers and the brokers is referred to as counterparty risk. An exchange house or a clearinghouse in case of currency trading does not guarantee spot and forward contracts.
The traders and investors must be well aware of these different risks related to forex-trading, before stepping into the market.
In order to be successful in currency trading, it is essential that the basics, goals, and risk management by the investor is right. There are certain things which currency traders should keep in mind when entering into currency trading.
Though forex trading online has started gaining popularity lately among traders and investors a set of relevant challenges makes it an equally competitive and risky as well. In order to be successful and make a profit from currency trading, it is essential for the trader to have thorough knowledge and understanding of the domestic as well as of global economies. Last but not the least, be cautious when choosing your broker for currency trading.
Stock Market its always considered as a market for money makers, in general, you need money to make money in future, but for this, you must know the process ho this can be done, as it's said:- “money does not grow on trees”.
We all heard this statement since childhood, but does it helps us to make wealth? Somehow it does but we need proper planning and understanding about the terms and concept before we enter into the market.
The term Stock market is defined as a place where buyers & sellers deal in financial securities like shares debentures bonds etc, but before we proceed ahead to let us clear some terminologies which make it easier to understand about the market.
A market place where individuals & group of individuals deals in Financial securities, Commodities, Currencies. This financial market is differentiated in as Money market & Capital Market.
A market which deals in the short term to medium term securities having maturity period up to 1 year.
A market which deals in Long term securities having a maturity period of more than 1 year.
A capital market is a market place which deals in long term securities having maturity period more then 1 year, Shares Debentures Bonds etc are some instrument of it, further it is classified as Primary Market & Secondary Market.
A primary market is a market place where companies or group promoters decides to expand their business. But for expansion of business, the major requirement is Capital. In the Primary market, companies meet there a requirement of capital generation for the expansion of the business.
A company after its initial stage of Business expansion requires funds, which a company can use it, use of this fund can be for working capital requirement, for any corporate purpose, clearance of any loan taken earlier etc. In this process of fund generation promoters and a group of promoters of the company offers shares & debenture in return. Issuance of equity it is termed as Equity Financing & issuance of debentures is term as Debt Financing. When a company issue its shares for the first time is termed as Initial Public Offer.
When a company decides to generate funds through Initial Public Offer, first of all, requires to draft a prospectus (a form of the application contains detail information about the company) to SEBI. Once SEBI approves, the company is ready to launch its IPO under which it is offering shares for the first time to investors.
A company can offer its shares to the public either in fixed-price or in variable pricing method.
When a company offers it shares where the price is fixed and pre-decided is termed as Fixed Price Issue this price is already available in the public domain, Whereas when securities are offered by company where the price is not known only a price range is available in the public domain is termed as Book Building Process. A company can either raise a fund with a fixed price or via Book building process.
As defined by SEBI Foreign Institutional Investors, Mutual Funds, Insurance Companies, Banks etc are permitted to apply in IPO under the category of QIB, where 50% of the total issue is reserved for them.
As define any person or individual who is registered under the HUF act, HNI, NRI or corporate bodies etc permitted to apply 15% of the total issue.
Any Individual Resident/ NRI, who is allowed to apply in IPO but not more than Rs 200000/- an are permitted to apply in 35% of the total issue size.
Any individual who wishes to apply in an IPO can use Net Banking, UPI, & Physical application.
There is a range of commodities you can trade, including agricultural commodities, such as corn, soybean, and wheat. It's the energy markets, in the form of oil and gas trading, and metal markets (like gold and silver), however, that tend to be more popular with traders these days.
The commodity markets are traded in a similar way to other types of financial markets, but there are some points to be aware of in order to avoid any shocks or surprises when dipping your toe into commodity trading:
1. Trail your stop loss to the Break-even point (BEP) as soon as the price goes in your favor. This may not ensure that you always make profits because the price can easily oscillate around your entry price and hit your trailing stop-loss before moving further in your direction. But as downside protection, it definitely works.
2. Don’t average your winning trades at reversal points. Your average entry price will work against your favor and will force you to sell at a loss. It’s better to book profits and then wait for a re-entry especially if you’re trading in a range-bound market.
3. Trade smaller contracts. If your account size is small, switch to mini contracts instead of trading the standard contracts. For instance, if you have ₹1,00,000 in your trading account, it is better to trade 15–20 lots of Crude Oil Mini futures (10 Barrels per lot)rather than 2 lots of the large Crude Oil futures contracts (100 Barrels per lot). Why? Because you can scale in and out of trades and manoeuvre much more efficiently. You will feel less like a victim if the trade goes against you as you can enter and exit in smaller pieces.
4. Buy options as a stop loss/trailing stop loss once the trade goes in your favor/against you. For instance, let’s assume you bought Crude Oil October futures at 5200 and it is now trading at 5500 (300 rupees profit per barrel = ₹30,000 per lot). In order to protect your profits, you buy an At The Money (ATM)put option at ₹100 (Total cost = ₹10,000 but you get unlimited upside potential if crude rises more).
5. Book your profits more often! Although people say you should run your profits, it’s not always true. More often than not, you should try and increase your hit rate and book small to medium profits in a volatile commodity. This will help you build your account size so that you can take more risks without losing your capital.
6. Track inventories but don’t trade them. Inventory numbers in crude oil and natural gas can be very unpredictable. It almost always causes an immediate price spike which is not rational to trade for those sitting in India with little to no knowledge about the demand/supply situation. When you take blind trades, you are more likely to lose than win. Just remember that.
7. Remember to never take trade against the currency trend. For example, if the rupee is depreciating, it automatically means that the price of commodities will be higher in rupee terms. At such times, it doesn’t make any sense to go short on any commodities.
9. Don’t bet against regulatory possibilities. For example, there is no point in going short on gold & silver in the current scenario even if the international prices go down because the Indian currency is depreciating and the central government may impose additional import duties which will hike the price of gold and possibly cause a short-squeeze.
10. Have a daily stop-loss limit that you will not exceed no matter what! If you lose a certain amount, then don’t try to recover that same day because you are going to be very emotional and will most likely indulge in revenge trading. Those who go down this path are sure to blow up their account sooner or later.
11. Trade commodities that are not correlated or are less correlated. For example, rather than trading gold & silver at the same time, you could trade crude and gold or some other combination like Agri/base metals. If you get the direction wrong on a commodity that doesn’t mean it will necessarily result in a loss in the other. It’s a type of risk diversification.
If you are willing to invest in the best performing mutual funds but don't know how to get started, it's pretty easy to pick up the best one that suits your pocket. Before picking the best mutual funds, it is crucial to understand your investment objectives along with the risk tolerance.
Choosing best mutual funds involves a lot of factors such as expense ratio, past performance, fund manager’s experience and more. Once you are ready to go through with your research, you will get a clear idea of which mutual fund you would want to invest your money in.
In this blog, we will cover the key aspects to select the right mutual funds as per your requirements.
Before investing in top mutual funds, it is crucial to identify your goal first. A goal can be anything, like short term purchasing utility goods, rent of a house or long term like providing for the school education for children.
You should also consider personal risk tolerance before starting investing in mutual funds. Ask these questions to yourself:
Are you able to tolerate dramatic swings in portfolios that may have huge ups and downs?
Is a conservative investment strategy suitable for you?
For how much time you need to invest your funds in mutual funds?
Remember, risks and returns are directly proportional to each other. Hence, it is suggested to get ready with the risks associated with these mutual funds.
Planning a successful investment strategy is extremely crucial for better returns because a proper investment strategy helps you to know about the goals regarding investments and your willingness to take risks. Thus, you can find the best mutual funds for SIP.
It is important to keep an eye on a mutual fund’s performance. This is because mutual fund cycles have to go through multiple market cycles. In a case, where the fund has not been able to beat its benchmark over 3 years, you need to understand that the mutual fund might not be an apt investment for future growth.
To check the fund’s better performance, it would be ideal to contact your fund manager as they hold a proven track record of all the mutual funds that may be beneficial for multiple investors.
Expense ratio is basically the commission, investors need to pay for the management of their funds. It is a fund manager’s fee that all clients have to pay for ensuring better gains. If you are targeting best mutual funds to invest in, it is suggested to target the mutual fund which has a low expense ratio.
Mutual funds tend to provide maximum profits if you choose the right one. Therefore. it is said to choose that fund which suits your requirements. Although there are a lot of options in hand, it is difficult to choose the best mutual funds for lumpsum investment. Therefore, all the factors should be taken into consideration while selecting the best mutual funds as it provides you with maximum gains with less time.
Share market is a place where everyone wants to make money through investments irrespective of terms. Many investors are masters in doing intraday trading, however, some of them want to play safe and often go for long term investments.
For beginners, it is always difficult to decide whether to invest or not to invest in the stock market as they think that stock trading is full of risks. Well, they are not wrong. Although the share market is full of risks, it offers a huge positive return to many investors.
To successfully trade in the stock market, all you need is to learn some highly impactful stock market tips and tactics and you are ready to go.
Before you get a deep dive into stock market trading:
Let's understand the basics first.
This is the foremost step to enter into the stock market. Opening a Demat account is a must as without it you can't trade online. Demat account is a dematerialization where you can buy, sell and hold your shares in a dematerialized form. Once you open a Demat account, you can start to invest in the stock market.
Many beginners believe that stock research is not that important, they instead rely on futile stock tips and unreliable sources.
As you all know, financial markets are full of risks, inconsistencies and volatility. Therefore it is crucial to do a bit of research and planning before buying any stock.
Stock market research and analysis are crucial for any investor because it helps them to get the full insight of stocks such as stock’s history, its past performance, its share price and trends.
Based on the research, you can get an idea when the stock will give you a positive return or not.
When a company first time lists its shares (IPO) in the share market, it is known as the primary market. Once the shares get listed on the stock exchange, the company gets an authority to trade in the market, which is termed as the secondary market.
The share market majorly depends on demand and supply. When a company is earning many profits, its share prices go up. As the demand for the stocks goes high, more investors want to buy those stocks which in turn increase the prices of stocks or vice versa.
A stockbroker assists you in buying and selling of shares. Apart from helping in buying and selling, they also provide tips and recommendations on stocks such as which stocks one should buy, how to successfully invest in the share market, which is the best time to sell a share and more.
The stock market is indeed a great way to achieve financial gains. Anyone who has done enough research and analysis can easily earn money from the stock market. Although there are many risks and uncertainty associated with the stock market, a smart investment will definitely give you positive returns. For beginners, there are numerous stock broking companies available in India. These companies assist beginners in selecting the right investment type while trading in the stock market.
Many of you have often wondered about stock trading and its movements. If you closely monitor the stock market movements, you may get noticed that stock market trends do not move in a single direction.
Sometimes they are up, sometimes they are down. Indeed, it's a big challenge to predict the fluctuations of prices in the Indian stock market as it is difficult to get the exact catch of stock market trends and position.
Needless to say, stock markets are highly volatile in nature. Therefore, stock prices are affected by several factors.
Before taking a dig deep into the stock market trends, let's understand the demand-supply chain first.
Stock market trading works like any other market and mainly focuses on demand-supply chains. For instance, the price of a product is determined by the demand and supply of that product. Let’s understand it with a suitable example:
Many people buy watermelon during the summer as it helps them to stay dehydrated and healthy. As the summer comes, the price of watermelon suddenly increases, which makes retailers purchase watermelon at a higher price than the normal rate.
The above example defines the mechanism of stock prices. The stock market mainly works on demand and supply. Demand and supply play a significant role in determining share prices. If the demand for a particular stock rises, the stock prices start to increase which in turn attract more bidders to bid the maximum to buy the share.
If the demand for a stock increases, the price increases or vice versa.
Here, we will uncover some crucial factors that affect the stock market prices:
Any changes in the company whether it is positive factors or negative factors can directly affect a stock’s price. Such factors are increased sales revenue, debt repayment, upliftment in the cash flow statements. Positive factors are:
Company’s dividends - If a company declares dividends to its shareholders, it can directly affect the price of a stock.
Any new changes regarding the present profit or future growth of a company.
Launch of a New Product - If a company first time launches its new product such as IPO, it highly affects that company’s share price.
Negative Factors are:
Any product failure of a company can highly affect the share’s price.
If a company merges with another company, that too affects the share price.
Company’s total employee turnover and high manufacturing costs can also influence the share’s price. Other factors include the scams or scandals involving a company.
Indian stock market heavily depends on exchange rates. This is because the value of Indian rupee directly affects the share prices. As the Indian rupee hardens with respect to other currencies, the goods sold by Indian companies become expensive in foreign markets. On the other hand, softening of Indian rupee decreases the value of goods sold in foreign markets.
A strong Indian rupee is the main cause behind the upliftment of stock prices in the Indian stock market.
Stock Market Trends
You must be aware of the terms bull market and the bear market if you are experienced investors. The bull market and bear market trends cause a great stock market fluctuation.
Bull Market Trends
In the Bull market trend, investors are keenly interested in the future of the stock market. Hence they invest more money in the stock market which in turn leads to an overall increase in the stock market prices.
Bear Market Trends
In bear market trends, investors are worried about the money that they have invested in the stock market. They are uncertain about unpredictable market trends which in turn makes the stock prices fall.
The policies controlled by the government have a high impact on stock market trends as the policies directly affect the investor’s sentiments and the economy. If the policies deemed in the favor of investors, share price gain. On the other hand, if the policies fail to comply with investor’s investments, it negatively affects the stock market.
Demonetization in India was the best example of government policy that affected the entire stock market. When demonetization was firstly foisted in India, the stock market crashed due to lack of liquidity.
Any natural calamity such as drought, earthquakes, floods badly affect the stock price of a company. These disasters not only impact on human displacement but also lead to asset destruction which in turn reduce the stock market price. For instance, a share trading company faces many difficulties during the natural disasters which in turn lead to depreciation of revenue. Hence it is advisable to check the weather forecast before investing in any share of the company.
Politics can heavily influence the Indian stock market. Before the election, there is huge volatility in the stock market. The rise or fall of share price mainly depends on the expectations of voters. The movements in stock prices were observed when the NDA government was formed led by prime minister Narendra Modi.
Needless to say, stock prices of a company may rise or fall due to certain factors that even the best analysts sometimes fail to recognize the actual reasons behind the fluctuation of a share price. Do remember that each stock price is unique and so its price variations. It is impossible to predict the actual reasons behind the stock’s price. If you are seeking investment in the long run, these factors help you to make the best investment decisions.
Trading is an old concept in India. Since the inception of the Bombay Stock Exchange in Mumbai, many people started to invest their huge amount of shares and generated strong income from it. As time passes, few of many stopped their trading due to inconsistencies and fluctuation in the stock market. They made their theories related to the stock market such as the stock market is full of risks.
However, the case is somewhat different from what they thought. Equity trading is now becoming popular among Indians especially youngsters. The principal reason behind the sudden popularity of share trading is “positive investment returns” with minimum hassle.
Earlier trading was done manually in the stock market. People used to go through a lengthy documentation process which was quite tedious. Nonetheless, online stock trading is a much easier way to trade online.
To trade online, you need to open Demat account where you can perform buying and selling of shares in a hassle freeway. The Demat account simply means the dematerialization of shares. In other words, it is a place where you can hold your shares, trade shares online.
There are two types of trading in India. Intraday trading and delivery trading. In intraday trading, people have to square off their position before the market session ends. I.e they have to buy or sell their shares in a single day.
Delivery trading, on the other hand, refers to the trading which extends more than one day. Also, delivery trading allows you to buy shares and retain them for a longer period. The time period of holding stocks can be a few days, weeks, months, years.
Although the brokerage of delivery trading is higher than intraday trading, the chances of loss are very less than intraday trading.
Choosing the right online stock brokers is a tough task for many investors, yet is easy if you follow certain strategies:
For beginners, it is suggested to invest with a small amount. Also, don't forget to define your risk quotient. A risk quotient will help you to identify how much risk you can bear during stock market trading.
It is important to do a bit of research before stepping into the stock market. This is because the financial analysis will let you know the type of stocks you should invest in. Also, it helps you to identify the past and present performance of a stock which in turn will give a clear idea that which stock will perform best in future.
There are several indicators available to find out the potential strength of a stock. Analysis of a stock can be done in two ways: fundamental analysis and technical analysis. Technical analysis provides you with detailed insight into the movement of share prices.
Stock trading can provide good investment returns if done in a proper way. For successful trading, the selection of the right online stock brokers is crucial. They not only provide you with advance research reports but also help you to manage your risk profile.
Many traders seek short term goals while trading in the stock market as they want to make quick money in a short period. Such things usually work but sometimes, traders may suffer heavy losses. Buying and selling of shares within a single day is a short-term strategy to produce high returns. This method is known as Intraday trading.
Although day trading and regular trading are similar, the main difference between them is delivery. Intraday trading gives you a facility to square off your position on the same day. In case you do not square off your positions at the end of the day, your holdings can automatically sell at the day’s closing price under certain brokerage plans.
Whereas regular trading or delivery trading allows you to buy stocks and hold them in your Demat account. There is no such concept of square off positions in delivery trading. The stocks will remain in your Demat account until you sell them off. The duration can be days, weeks, months and even years.
Intraday trading gives you promising returns and hence they may sound attractive. However, there are certain risks associated with it. In intraday trading, you have to square off your position before the session ending time. This requires your full attention until the market closes. Also, you need to have a good experience in intraday trading, only then you can achieve positive returns.
Currency trading has been gaining a lot of popularity in India. Also, it becomes one of the greatest emerging trading platforms in India. The reason behind this huge popularity is the inclination of investors towards trading in currencies. In forex trading, investors trade over a pair of currencies and earn profits from it. They actually keep monitoring price movements on currencies and generate a high income from it.
In India, currency trading is done on apex stock exchanges such as NSE (National Stock Exchange), BSE (Bombay Stock Exchange) and Multi Commodity Stock Exchange. The timings of currency trading are available from 9 am to 5 pm. To trade in currency, investors don't need to have cash or equity.
Commodity trading refers to the trading of precious metals, oil & gas, energy, spices and so on. Several metals such as gold, silver are traded in several ways like physical holdings, ETFs, futures contracts and more. As there are many options available to trade, commodity trading allows investors to trade that suits their temperament.
Among all of the ways, a futures contract is the best way to invest in commodities. Futures contracts are an agreement to buy and sell shares of commodities at a fixed price at a later date. The best thing about futures contracts is the futures contracts are available for every commodity type.
It is extremely important to gain proper knowledge in stock trading as having adequate knowledge of fundamentals of trading may give you certain ideas about trading such which trading type is better for you? Intraday trading, currency trading or commodity trading.
Trust Our Expert Picks
for Your Investments!