Investing in the stock market nowadays is full of mystery and suspense. Maybe most of you have invested money in the stock market and have generated low returns or may have lost all your money. In this Article we Will Talk About How to Buy Stocks in India ?
Maybe it’s because you have been investing all your money listening to stock tips of other brokers or so-called experts TV channels. It is not the way how you should invest your money in stocks. Some say that investing in stocks is very complex, but it’s not. If you know how to select your share, it’s not rocket science anymore, and you quickly make your money.
Consider the stock market as a game. In-game, you play on your own, you make your analysis and tricks to play better than others, and if you play on listening to anyone else idea, you might lose because you aren’t playing with your ticks and ideas, the same way it is applied to the stock market.
You cannot buy or sell stock listening to someone else’s tricks.
So if you are planning to invest your money in the stock market and make a profile, this article will guide you step by step on How to invest in the stock market.
You can invest in the Stock Market either
- Directly in shares where you trade on your own by opening a Demat account.
- Or indirectly through MF (Mutual Funds) where there are investors who sell on your money.
How to Buy Shares Step By Step Approach to Invest in the Stock Market
As it says, ‘to bring in cash in stocks, you should have the vision to see them, boldness to get them, and persistence to hold them.’
Below are Some Steps For How to Buy Stocks in India
- To buy shares directly or indirectly, you have to open a Demat account. To open a Demat account, you need a pan card. PAN Card is the primary step if you want to invest in the stock market and buy shares of any company in India. It’s a unique ten-digit number.
- If you beginner in the stock market, then find a good broker. Open a Demat account with any broker of your own choice. To put it simply, it means to have a relationship manager so that they can guide you or can check your orders or can punch your orders, etc. it’s worth spending time with your broker before investing in any stock market or shares. A Demat account holds the shares in your account in your name.
- To buy shares third step is to select a depository participant. In simple words, depository participants are agents who provide the accounts to hold your shares. It’s not like a Demat or trading account, but instead, they have the shares you bought and release the shares you sold. There are two types of depositories in India: NSDL and CDSL.
- Transfer fund to your trading account:-It’s a crucial point to note that you do not start investing with a considerable amount of money. What if you invest 50 lacks and the market goes down, and your 50 lacks becomes 25 lacks? With that much loss, you can’t go to sleep at night because of a considerable loss.
Instead, invest with low capital, let’s say 10,000 or 20,000, and if the market is down even if it goes to zero, it does affect much of your feelings. So you have to set your right capital to invest in the stock market. As it says, “Learning is a higher priority than acquiring in starting days.”
And the same goes for our next point, how much to invest. You have to set the capital you want to trade, even if the market goes down to the max. it doesn’t affect your feelings or health.
How to Decide What to Buy ?
- Inside trading/tips: In my opinion, it’s the worst trick to trade in the stock market. No one can make money using “tips”. Instead, either you can give your money to the fund manager, and it is upon him on which stock he invests, there can be few years when he performs well, and there can be few years when he performs terrible but investing your money taking someone tip is the worst thing you can do.
- Risk vs. Return: think in terms of risk vs. Return. If you want to earn more in the stock market, you have to buy stocks with higher chances. If you don’t want to invest in risky stocks, then settle for lower returns.
- Select only companies that you can understand: learn about those companies that you know. Grab all the information about how the company works and the company’s future, what returns the company has given in recent six months or one year or five years. Take a good look at the company chart of recent five years in which you want to invest. You can check it on moneycontol.com or ticker-tape.in
- Technical analysis: it’s the simplest way to invest in stocks professional traders doesn’t use complex way to trade they use a straightforward manner. It includes 44 moving averages, RSI, MACD, VWAP, Bollinger bands, pivot points, etc. professional traders pick any of these tricks, understand them fully, and make money in the trade market. You don’t have to learn all the tricks to make money. Just pick one of the tricks and go through it.
Types of Trading Style
- Intraday trading: in this, you buy and sell the shares on the same day. You have to it in between 9:30 to 3:30 PM. If you want to make more money, don’t hold the intraday trading thinking that maybe it will rise tomorrow and so on. If you buy for intraday, sell for intraday.
- Swing trading: in this, you can hold your share Monday to Friday, i.e., you can have it for 5-6 days.
- Positional trading: in this, you can hold the share for up to 1 month approximately.
- Long-term investing: you can hold it for 6 months or more than that up to years.
** don’t switch your trading during intraday **
How to Buy Stocks in India : Strategies To Buy Any Stock
- Entry: entry means where you have to buy the stocks. When the market is fully bearish, that’s the time you have to buy the stocks that indicate when the market is below the average line.
- Buy low sell high: you have to make this point as your plan during trading. Buy the stock when the market is the lowest and sell it when it is published at its max means when it is at its highest point.
- Stop loss: make sure to mark the stop loss in your shares. It’s the price you set where you don’t want your price to go below that point. For example, you buy a share for 100 rupees; then your stop-loss price should be 80 or 90 rupees so that if the market goes below this price, get out of the stock.
- Time stop: do not hold your shares for too long term. If the market does not show any bullish response, there is no point in having that stock for too long. It doesn’t take you anywhere. Make your time stop switch to other shares.
Play with long term goals but not for too long, and always keep this one funda/strategy in your mind that is
‘TREND IS YOUR FRIEND UNTIL IT BENDS’ always follow the trend, analyzing if the market is going up or bending down. Always invest following the trend.
Thanks For Reading Our Article on How to Buy Stocks in India, Hope You Like it.