Investors who deal in stocks dream of making a lot of money. You need a solid strategy to make money in stocks. This will allow you to protect your investment while still making good returns. If you want to make money in the stock market, it is important to have a solid understanding of its factors and how they work.
Many people ask the question "How to make 1 lakh per month in share market?". Before we answer that question, let's review the basics. Let's see what a stock market is. A sharemarket is an online marketplace where you can buy shares or stocks from a company. The words stock, equities, and cash all refer to the same thing in the sharemarket dictionary. The shares/stocks of a company refers to the company's shares that fluctuate every day (variations from Rs 10 up to 500).
You are tied to the company's business when you buy stock in a company. When a company makes profits, the stock prices will rise and you'll get more money than you invested.
On the other side, if the company's profit drops, or it is associated with unfair activities, then share prices could fall and you may lose some of your investment.
You need to keep your trades safe. A DEMAT account is the solution. A DEMAT account is a place where securities and shares are stored in electronic format. DEMAT is an acronym that stands for "dematerialized account." This account can be opened by traders when they purchase shares or dematerialize them. The process of converting physical shares certificates into electronic format is called dematerialization. There is no need to present complicated documentation anymore for shares. It is much easier to track, manage and access your shares from wherever you are. You will need to open a DEMAT (Depository Participant) account if you want to trade online. It is easier to track and trade them online, especially since trading shares is now done online.
- You can open a DEMAT account at any bank or sharebroking firm.
Trading of shares cannot be done with your bank or ordinary savings account.
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Intraday trading- You purchase stocks in a certain quantity and then you sell them off the next day. You purchase and then you sell. You can't make a permanent investment or blockage of your money. You lose if the stock price falls after you bought them. You make a profit if you sell them at a higher price before the day ends. You can do anything in a matter of hours.
Delivery Trading - Let's say you purchase 100 Axis Bank stock. They can be sold the same day, 30 days later, after a year, or even after 20+ years. You will need to invest money. Delivery trading refers to when you purchase shares and keep them for a set period of time. They will appear in your demat account once you have purchased them. You can then keep them as long as necessary.
Swing trading- In swing trading you aim to make stock gains within a short time span. You purchase a stock at a certain price today and then wait for it to rise. You sell the stock when it is high after a few months or weeks (sometimes up to 6-8 month).
Future and Option Trading- If trading options are in effect, you can trade shares at a specific price whenever you wish, provided that you do not have to. If your position is not closed by the date specified in the future, a futures contract will force you to purchase or sell shares on that date. A future will require you to purchase or sell an underlying stock on a predetermined date. An option allows you to sell or buy a stock at any time without any obligations. It is best to avoid dealing with options and trading if you are just starting out in the sharemarket business.
To make profit on shares already bought
Stocks can be sold to prevent loss if the stock was purchased at a higher cost. There is always an option to hold stocks and wait for prices to rise. However, if stock prices drop further, it will only make the loss worse.
In an attempt to save money, traders sell stocks primarily out of fear of losing more.
This question is too broad to provide a satisfactory answer. The amount of money you invest will determine how much you can make. A majority of trading systems will give you a margin of 10-15 times. A stock can be purchased and held for 3 to 3 years. You could get a return as high as 30% to 5 percent.
We all know that the stock market fluctuates every day. Prices can fluctuate depending on the stock. They can range from 10 paisa up to Rs 1000. Your skill is in identifying the lowest possible price, buying the share in delivery trading and then selling it when prices rise. While the waiting period may vary from a few days up to one year, your returns will be much higher. This type of trade is most popular among traders.
These are some guidelines that will help you keep on track.
It is important to have discipline Take the time to learn how to invest systematically in promising shares. Stock market volatility is a constant. No matter how well you plan, there will always be risks. You should take calculated risks and plan for the necessary actions against underlying stocks like hedging. You can be patient and disciplined to see the bigger picture and make informed decisions.
Do your homework- No one is able to trade stocks overnight. They have to work hard. Do your research on a company before you buy their stock. It is better to take time to research a company before investing. It will yield better results to invest in a company you are familiar with.
You should gradually build your portfolio by diversifying among different asset classes. This will allow you to maximize your returns while taking minimal risk. Your choice of level and type of diversification will depend on you and can vary greatly from investor to investor. It can help to keep market volatility under control.
Don't blindly follow the trends- Any decision that you make to purchase or sell stock should be yours. These decisions shouldn't be influenced by the opinions of family members or close friends, regardless how sincere they may sound. You should not let others influence your decisions or follow the trends. Rely on your instincts.
It is important to monitor the news regularly and keep up with the developments of companies that you are interested in. Stock prices can be affected by events at times. You can gain an advantage by following trends closely and making them more predictable. Sometimes, you will need to be able create causal links between events to determine the effect they have on shares. Good profit can also have a positive impact on stock prices.
Set realistic expectations - Expectations should always be grounded in reality. The equity market is known for its rapid returns. Investor patience will be tested time after time. There is no asset that can provide consistent large returns. Nature is controlled by the reversion to means. Incorrect assumptions can lead to unrealistic expectations, which can cause a lot grief in the form bad decisions.
The stock market offers traders regular entry and exit points. This is a consistent rule. It is not a good idea to invest all your money in a trade. Always reserve some for later. You can correct a stock to make it more affordable. This will allow you to get hefty returns if the trend reverses.
Only invest surplus funds- Another rule of thumb is that you should only invest surplus funds. This includes money that you don't need immediately. You are always at risk of losing money temporarily because the share market is volatile. Stock market trends are always changing. To understand trends, you need to be an expert in the field.
You don't need to worry about stock prices rising if you make your investments on time. It is important to be able to determine when the stock price reaches its bottom or close to it. You can then invest in stocks at this point. After that, prices will rise again and you can sell them.
This is the fundamental rule that governs all shares markets: buy when prices are low and sell when they rise. Although it may seem simple, this rule is the most difficult to keep in mind. It is difficult to determine the bottom. It is important to know when to sell and buy, and this should be something you work hard at.
These tips and tricks can help you make informed stock investments. It is easy to lose track of any strategy when the market moves in a confusing and random way. However, quality stocks will always pay off in the long-term if you make wise investments.
It is important to know when you should exit. You can save money today by exiting on time. This is equal to earning money. It is okay to leave if you feel that the terrain is becoming too uneven.