Stock Market, or Stock exchange, is a financial marketplace where stocks/shares of a company are sold to the public. This buying/selling of stocks is known as stock trading. Stocks are nothing, but a representation of ownership in a company. For investing in the stock market, you need a Demat and trading account. Read more to know about stock market trading, and how to open a Demat account.
In India, the stock market is regulated by SEBI. Companies registered with SEBI can sell their shares to the public. Investing in these shares can result in great returns, but the opposite can happen too. Putting your money in the share market is a risky business. Nobody can exactly predict the rise or fall of shares, but one can study the traits, and then make a decision that has a great scope of profit.
Here’s how you can earn huge returns by investing in the stock market.
- Do Your Homework:
Educate yourself with the basic terms used in the trade market like IPO, portfolio, spread, volume, yield, index, volatility, etc. Gain a better understanding of the jargon used in the stock market, stay up to date with share market news, and do your groundwork before investing your money. Join online courses or find a mentor to learn more.
- Pick An Online Trading Account:
You need to have a Demat and trading account for investing in shares. You can easily open these accounts online without much hassle, all you need is your PAN card and you’re good to go. Before opening these accounts, do check the credentials of the broking firm.The interface of the trading platform should be secured for safe transactions.
- Use An Online Stock Simulator:
Using an online stock simulator will help you improve your skills, and understand the trends and traits of the stock market. Since most of these simulated stock games are synchronized with the current market indices and stock values, you get a real experience of trading shares using virtual money. This will help you understand the working of the stock market and improve your knowledge of investing strategies.
- Opt For Low- Risk High-Reward Method:
It is very tough to predict the ups and downs of the stock market. So, more often than not, newbies damage their share trading accounts by suffering losses due to high risks. Since risk is unavoidable, the low-risk high-reward trading process ensures that rewards are obtained while the risks are controlled.
- Follow Warren Buffett’s Advice:
The greatest investor of all time, Warren Buffett, suggested- ‘buy and hold the market’. This simply means that you buy the stocks of a company and hold it for a long time regardless of the fluctuations in the market. The investor can defer capital gains taxes on long-term investments by holding rather than selling.
Trading in the stock market is one of the most popular modes of investment in today’s world. Even though there are risks involved, investing prudently can fetch you great returns. Hope we helped you understand the basics of stock markets and how to open Demat account online.