What is Stock Market?
Stock market is a platform where buyers and sellers come together to trade publicly listed shares during the market hours. These transactions are conducted by the stock exchanges of a country. For example- In India NSE and BSE are the primary stock exchanges. In this article I will discuss about a brief stock market guide for beginners.
To trade in the stock market there are certain requirements that you need to fulfill. Here is a stock market guide for beginners:
Documents that are required to trade/invest in Stock Market:-
- Pan card
- Aadhaar card
- Name on a canceled cheque from your active bank account
- Account statements
- Passport sized photograph.
Demat Account:-
After collecting the required documents you need a demat account to invest in the stock market.
A Demat account is derived from the term ‘dematerialisation account’ which simplifies the buying and selling of holdings and trades.
The opening process of a demat account is super easy if you have the required documents that are mentioned above. Opening of a demat account is done both by online and offline means.
Trading Account:-
A trading account helps an investor to place buy and sell orders in the share market. Your stockbroker will provide you a trading account. A trading account is linked to your bank account in order to add or withdraw money to/from your trading account.
Once you complete this process you can invest in the stock market. But before investing into the stock market you need to know these things.
Tips to Invest in the Stock Market
- Risk management
As an investor you need to decide how much you are willing to risk per trade. This will help you to survive in the market for a long time. Not only this, proper risk management will help you to become profitable in the long run.
If you are a beginner you should not risk more than 2% of your whole capital in a single trade. This will help you to sustain in the market for a long time and you will be able to learn more.
- Discipline
Discipline is required in every aspect of your life but if you are working in the stock market you need to be highly disciplined. Being disciplined will help you to gain control over your feelings and emotions. Which means that you will be able to think and make decisions logically.
- Decide your Investment Goals
You need to decide your investment goals before investing into the stock market. If you are planning to invest for a long time into a stock you need to analyze and develop proper setups for swing and long term trades.
If you are planning to invest into a stock for a short term you need to develop and build proper setups for intraday. Remember being patient and working on that setup consistently will make you wealthy.
Conclusion
In today’s world investing into the stock market is quite simple but being profitable and to sustain in the market for a long time is challenging. Before investing into the stock market, having proper knowledge is advised and deciding your financial goals and the investment time horizon will help you to be profitable. Adding discipline and risk management in an investing journey will make your journey successful.