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Share Market Tips

Tips for trading in Indian Share Market

Trading refers to the short-term investments made in the stock market. A holding period below 1 year is considered a short term. The period starts one day and may even include a few months. Thus, any investment bought for the sake of sale within a short period is considered as trading. The best idea is to gain optimal results from such short-term investment avenues. 

 

Basics of Trading in share market

To start to trade in the share market, an investor needs to register for a demat and trading account. Such an account must be linked to the bank account for money transfer. However, before opening an account, it is important to check the authenticity and the credentials of the brokerage firm. The trading account allows you to invest in mutual funds, IPO and equity shares. Such a trading account should have a safe and fast interface to help you with the transactions. The demat account is used to keep your purchased shares in custody. 

Trading in the share market today can be done using both online as well as offline channels. However, the online method is highly appreciated for short-term trading as it helps to save costs. 

Important steps for trading in stocks 

Firstly, it is necessary to shortlist a group of stocks in which you wish to trade-in. It is a good idea to focus on stocks that have low risk and give steady returns. Once you find such stocks, start by investing in smaller financial amounts. 

Likewise, trading requires good research to understand and shortlist these stocks. Focus on what the business is at and the industry as a whole. Do talk to other people who are into the investment to gain an insight into the process. 

Since you are looking for short term investment, the method of execution is an important part of share investment. Also, the total transaction cost and legal costs need to be measured to see if you can reach the break event point. These make a huge difference to your overall trading performance. 

 

Monitor the share investment

The traders spend a lot of time in monitoring their share investment and outcomes. These help you to understand how share market changes will impact your share value and stock prices. Also, factors like inflation can impact share performance. Hence as an investor, you need to have good patience to make the most of the investment and reduce the losses. 

 

Challenges in share trading

The exit is the biggest turning point of the share market live trading. The fact is that the best stocks will give you returns only on sale. Thus, you must know when to exit the investment in a particular share. 

If you exit early, you may miss a good deal and if you exit late you may earn losses. Thus, keep your risk in a tolerable limit and monitor the investment closely to avoid any losses. 

 

Understanding the trading rule book

A trading rulebook defines the exact manner to avoid losses and the method to earn the most from your shares. Likewise, you can easily manage risks associated with trading using the guidelines mentioned in this book. 

Another method is to keep a trading diary to record your trades in stocks. Each trade must be mentioned in the diary and associated reasons and returns must also be recorded. This will help you monitor and evaluate the share performance in the stock market for future trading. 

Use online stock simulators

A simulator helps you to practice with a hypothetical investment based on the principle of zero risks. This can be done using virtual financial management games and software available for use online. Also, market indices and stock values can be easily understood using virtual money. Thus, you can learn without risking actual money. 

 

Remember high returns come with higher risks!

The share market is highly volatile. You can damage your earnings by going greedy and investing in a huge risk share that offers equally good returns. While starting with the share trading, one needs to start with lower risk options and then work on the higher risk investment avenues. Also, take the help of the trade experts to have an ideal portfolio for risk and earning management.

Attend the trading seminars

The investment experts and brokers usually conduct discussions or seminars to help investors gain the right understanding of these products. This will help you to build a network as well as solve the various queries that you may have in mind through the help of experts in the field. This will boost your confidence in the process of share market trading and investment.