How to start trading-investing in stock market?

 

Nowadays many aspirants want to enter stock market, but they don’t know how to start? And they start in a wrong way, which results in failure. So, in this blog, I will tell you what should be the first step, when you trade.

Many aspirants open a demat account and start trading with no knowledge. They learn in 2-3 days about order execution, and they think they have learnt to trade. But order execution is very easy. The important thing is this that what to buy? And what to sell? When to buy? And when to sell? If you don’t know this, you will lose money.

To know what and when to buy? What and when to sell? Learn about Fundamental & Technical Analysis. Many traders investors also learn this analysis, but still things are getting complex for them. Because they miss their first step. The problem is there.

When you want to trade or invest in stock market. There are types of trading and investment, like scalping, intraday, swing, short term and long-term trading. Short term, medium term, and long-term investment. Choose anyone or two from that and focused on that type. Once you choose to become an intraday trader, then you should focus on that type and you have to develop your skill in that segment. Traders take positions for intraday and if it is not profitable, they convert it in to a swing trading, if not profitable in swing, they convert it for short term. And slowly, if they didn’t get profit, they become investors in that stock. They book small profit and hold those stocks which are in loss. Because it does not focus them on any type of trading. A person has taken stock like Reliance Power in 2008 at 400/- per share for short-term trading, hold that stock still in 2021 to get profit. Today Reliance Power rate is 4/- per share. So, in this way people lose money in stock market due to lack of knowledge.

It is very important to decide your role in stock market. Who you are? Trader or investor? What type of trader you are? Intraday or Swing? What type of investor you are? Short term or long term? Once you decide you have to follow the rules of trading or investing. Suppose you take a X stock at 500/- for intraday, and if your trade goes wrong, book your loss also on the same day. In trading, every trade is not a profitable trade, there are losses as well. But you must know how to minimize your losses and maximize your profits. Novice traders do exactly opposite, they are excited to book small profits and sit on loss positions in hope they will give profits.

Remember, if you want to become a professional cricketer, you must decide whether you have to focus on batting or bowling. If you want to become a bowler, you must decide what type of bowler. Spin, pace or swing? In a similar manner you must decide what type of trading or investment you want to do, if you want to become a professional trader or investor. 

Galli cricketer has all skills, he knows off spin, leg spin, pace, in swing and out swing, but plays only in galli. Professional cricketer like Harbhajan Singh, Kapil Dev, Sachin Tendulkar, Anil Kumble focused on one segment and become great cricketers. In a similar way, if you want to become a successful trader or investor, choose anyone or two segments and focused on that segment only.