Step 3: Read some investing books.
There are a number of decent books on stock market investing that you can read to brush up the basics. Few good books that
I will highly suggest the beginners should read are:👉👉
will suggest the beginners should read are:
- The Intelligent Investor by Benjamin Graham
- One up on wall Street by Peter Lynch
- Common Stock and uncommon profits by Philip Fisher
- The Dhsndho Invester by Mohnis Pabrai
- The Little Book that beat the market by Joel Greenblatt
- Learn to earn by Peter Lynch
Step 4: Choose your stock broker
Deciding on an online broker is one of the most important steps you should take. There are two types of stock brokers in India:
Full service broker
Discount brokers
- Full service agent (traditional agent)
They are traditional brokers that provide trading, research and advisory services for stocks, commodities and currencies. These brokers charge a commission for each operation executed by their clients. They facilitate investment in currencies, mutual funds, IPO, FD, bonds and insurance.
Some examples of full time brokers are ICICIDirect, Kotak Security, HDFC Sec, Sharekhan, Motilal Oswal, etc.
- Discount broker (Budget broker)
Discount brokers offer trading facilities for their clients. They do not offer consultants and are therefore suitable for the "do it yourself" type of clientele. They provide low, high speed brokerage and a decent platform for trading in stocks, commodities and currency derivatives.
Some examples of discount brokers are Zerodha, 5paisa, Upstock, Angle Brocking etc.
I will highly recommend you to choose discount brokers (like Zerodha) as it will save you a lot of brokerage charges.
Initially, I started trading with ICICI Direct (which is a full service broker), but I soon discovered that it was much more expensive than discount brokers. There is no point paying extra brokerage fees, even if you earn the same profit. And that's why I replaced Zeroda as my agent. (Related posts: Various Stock Trading Fees Explained: Brokerage, STT, And More)
Zododha (a discount broker) is part of a brokerage of 0.01% or 20 rupees (whichever is less) for an order executed on Intradía, regardless of the number of shares or their prices. For delivery, Girodha has a zero brokerage fee. Therefore, while using the Xeroda platform you should pay a maximum of Rs 20 per brokerage and it does not depend on the volume of the trading.
It is much cheaper than direct ICICI (full service broker) which requests 0.55% brokerage on every transaction. If you buy shares in ICICI Direct for Rs 50,000, you will have to pay a brokerage of Rs 275 for the delivery trade, when you hold the shares in your demat account for more than one day in your demat account.
Also, since this amount is taken from both sides of the distribution transaction (buy and sell), you have to pay a total of Rs 550 for the entire transaction in direct ICICI (much more expensive than Zeroda).
In short, if you are planning to open a new trading account, I would recommend opening a discount broker account so that you can save a lot of brokerages
Step 5: Start researching common stocks and invest
Start to notice the companies around you. If you like the products or services of any company, drill down for more information about its parent company, such as whether it is listed on the stock exchange or not, what is the current stock price, etc.
Most products or services that you use on a daily basis: from soap, shampoo, cigarettes, banks, fuel pumps, SIM cards or even your underwear, all have a company behind them. Start researching about them.
For example, if you have been using HDFC debit / credit card for a long time and are satisfied with the experience, then do more research on HDFC Bank. Information on all listed companies in India is publicly available. A simple "Google search" of "HDFC share price" will give you many important information. (try it now!)
Similarly, if your neighbor has recently purchased a new Baleno car, they are trying to find out more about the parent company, ie Maruti Suzuki. What other products does the company offer and how has it been performing recently, such as its sales, profits, etc.
You do not need to start investing in stocks with hidden gems. Start with popular large-cap companies. And once you are comfortable with the market, invest in small and mid caps.
Step 6: Select a platform to track your performance
You can simply use an Excel or Google spreadsheet to track your stock. Create a spreadsheet with three tables:
Things you are interested in and you need to study / investigate,
The actions you have already studied and which are cultured,
Various actions - for other actions you want to track.
In this way, you can easily track stock. Apart from this, there are many financial websites and mobile apps that you can use to track stocks. However, I consider it easiest to use Google Sheets to track my stock.
Step 7: Have an exit plan
It is always good to have an exit plan. There are two ways to get out of stock. Either making profits or making losses. Let us analyze both scenarios.
Basically, there are only four scenarios in which you should sell a good stock in your portfolio: 1) when you need a lot of money 2) when the stock's fundamentals have changed 3) when you have a better investment opportunity and 4 ) When you reach out. Investment objectives
If your investment objectives are met, you can happily exit the stock. Or reserve at least a portion of your stock portfolio earnings and switch to other, safer investment options. On the other hand, if the stock has fallen below your risk appetite level, then exit the stock again. In summary, always know your exit options before entering.
That's all. There were seven stages that will help you know how to invest in the stock market.
Keep learning keep growing 📖📝
Happy Trading Happy Investing 💓
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