If you are a beginner and interested in investing in the stock market, then now, you must be thinking about where to begin.
Here is a complete guide on the process you should follow for stock trading.
Let’s get started.
Brief overview of the stock market
The stock market is a marketplace where securities such as stocks, bonds, and shares of public listed companies are bought and sold.
Investing in the stocks market means purchasing tiny shares of ownership in a public listed company. Those small units of shares are known as the company's stock.
Here, the steps are briefly described for beginners.
Open a demo account
Traders or investors have to create a Demat or brokerage account.
For example, you can't access Facebook until you open a Facebook Account, here it goes the same way you can't start your stock trading journey without a Demat account.
The Demat account works the same as a bank account, where you hold on to money for investing in trade.
In the Demat account, your purchased securities are electronically maintained.
Understand stock quotes
The value of a stock fluctuates based on any news, reports, fundamental issues, technical analysis, and the list goes on.
By studying these perspectives, you can increase your skill in stock and stock investment markets. It helps to figure out when to enter or exit the trade.
Biding price shows the maximum price you want to pay to purchase a stock.
The asking price is the exact opposite thing. It's the minimal price at which the seller is ready to sell the stock.
For assuring a beneficial trade, you have to set the correct bid and ask price.
Fundamental and technical knowledge of stock
Analyzing the fundamental and technical helps in planning stock trading. By fundamental analysis, you can compare its intrinsic worth. It examines several dynamics like earnings, expenses, assets, and liabilities.
And technical analysis estimates stock based on its past stock value and stock volume chart for predicting future potentials.
Learn to stop the loss
Fluctuation is a profound characteristic of the share market.
So, a beginner needs to understand the way to prevent heavy loss.
While trading in stocks, you need to fix a stop-loss price to minimize the loss. If you are unable to put a stop-loss, it may damage your capital to a great extent.
If you face a huge capital loss at the very beginning of stock trading, it might lower your confidence level. You may lose interest in stock trading.
The clever move is to start investing in less volatile stocks, maybe it will give slow results, but there is a high possibility that it will give back a great outcome even in adverse (uncertain market situations sounds better here) situations.
The stock market is complex. You can accomplish the first stage by successfully creating a Demat account. Afterward, start to work on developing sufficient knowledge of the stock market. It will help you work against the odds and overcome stock market volatility.
I hope all of you have a profitable trading experience in the future. It took many successful traders many years to get to where they are now so, if you want it, don’t give up.
And All the BEST!!!
