How to start your journey in the share market?

The first thing to do is to learn what is a share? and how does it work?.

Learning what is a share is the easy part but figuring out how it works is the tough part where many do not understand that it is a business not betting. You need to understand that every business has its good days and bad days likewise you need to figure out how to gain more during good days and how to lose less during bad days this is the key principle you need to follow to be successful.

The major requirements to start trading in share market are

1. Bank account(to transfer money from to share market)
2. Kyc documents (to open Demat cum trading account)
3. Demat account(to hold your shares)
4. Trading account(to buy and sell)

Next is what type of style you want to follow in share market.

There are mainly 3 types

• Investing
• Day Trading
• Speculating

 

 

 

 

 

 

These 3 styles follow different risk appetites depending on your wrist appetite you can choose any of the 3 styles and also These 3 styles have different timeframes or frequencies of trades

Investing is for low-risk medium gain and the time frame is long like one month to many years For Example buying equity shares of companies holding it for a prolonged period

Day Trading is for medium risk and high gain at the time frame is like one day to few weeks example intraday trading of equity shares or features buying shares with leverage

Speculating is the riskiest of all with the highest gain and the lowest time frame For Example buying and selling options where you pose the risk of losing your entire capital within a brief period or you may gain profit more than your first investment

 

For beginners it is best to choose investing which is very less time consuming and less risky also it provides a good returns and you can Start learning how to invest and slowly gain knowledge about the share market you can start with a very low capital So that you won't lose much avoid speculating and following tips of others till you acquire the basic knowledge on how the market works after that you can start exploring leverage trading once you gain good confidence about your trades follow strict principle of having a stop loss to protect your investment from sudden movements of the market this will protect your investment from huge losses Always remember that you cannot make profits every day you need investment protected to trade another day The best principle to follow here is having a 2:1 ratio for profit versus losses this will give you a discipline and also make you consistent when following a trading style there are enormous number of trading styles and strategies you can follow to make consistent profits by following the rules to one ratio you will make profit even though if you are successful in 5  out of 10 trades

Coming to speculation this is more lucrative and looks quite easy for most traders but it's a deadly trap for many. Speculation is mostly done on nifty and bank nifty options Where people have equal opportunity to either make 100% profit or lose 100% capital this is the riskiest means of making money in the share market one large trade can wipe out your entire capital or it can make you rich what is this purely on probability so it is wise to avoid making huge investments invest only the amount which you are ready to lose So that it won't make a dent in your investment strategy

 

There are many books you can refer to learn about his trading styles and also there are many YouTube videos made for beginners My strong advice is that you start by investing and learn more about the tricks and trends of the market Also I will provide you with knowledge of value investing in the future blog posts through which you can become a value investor yourself By following the key concept involved in understanding  a company’s valuation And learn more about Value investing which is the key strength of the greatest investors like Warren buffet