Tips to Invest in Stock Market – Beginners Guide

Everyone in his or her life heard about stock market. In India, People call it share bazaar as well. Everyone is curious to know about stock market, often people seen asking the following questions

How to trade or invest in this market?

How much money one should invest at initial level?

Which stock to buy Or How to choose the best stock?

Is stock market a gambling?

Let’s answer above questions in detail and try to eliminate your confusion –

How to Invest in stock market

In early 90’s investing in stock market is tough, at that there were no computers, mobile phones or internet connects. Trade transactions are recorded in paper form. But in this techy world stock trading is on your finger tips. Today you just need a mobile app to bid your trade. For this you need to stock broker to open a demat account. There are various reputed stock broking companies are present in the market like Anand Rathi securities, Zerodha, Upstockz for demat account. After Opening a demat account, you need a mobile application there you will download a app of the stock broker. While registering for demat account you need to submit your pan card, adhar card, driving license etc. Documents requirement may vary depending upon the broker to broker. With the help of this mobile app you can trade in the stock market.

How much money one should invest at initial level?

We often seen people asking this question. The answer is 5000 INR. At Initial level don’t invest more than this amount. First try to understand stock market with this money. Execute trades, learn from the losses. Try to calclulate brokerage charger your broker are charger for per trade or transaction.

You may lost this money in stock market initially but believe me you learn lot from this. Only invest in money if you have ample money to invest. Don’t invest in stock market if your are passing through  a financial crunch.

How many types of stocks are there in Indian Stock Market

There are three types of stocks in the market

• Large Cap (Blue Chip Stocks)
• Midcap Stocks
• Small cap stock Or Penny stocks

Stock type may depend upon the market capitalization of the stock. The stocks who has higher market capitalization marks its presence in large cap stock. Who has lower market capitalization comes under small cap stock. We also called these stocks as penny stocks. Read –  Penny stocks to buy

As per the market gurus, penny stock or small cap stocks are highly speculative whereas large cap or nifty 50 stocks are considered as safer for the investment.

Top Indian companies like reliance, tata, SBI marks its presence in Nifty 50. These stocks are no. 1 every aspect like market capitalization, in terms of sales or revenue etc.

As per the market gurus,

Which stock to buy?

Now you have a demat account and money to invest but the question is which stock to buy or how to best stock. For this, you need to research we will give you the fundamental rules to choose the best stocks.

As per the experts, there are two ways to choose the stock

First one is technical analysis and second one is fundamental analysis.

We will discuss about fundamental analysis later. First we will discuss about technical analysis –

Technical analysis is analyzing the past performance of the stock. In simple words stock 52 week high low, Average share traded volume.

Compare you stock performance with market trends as well. If market is up then your stock is also moving up or moving in the reverse direction.

Let’s discuss about fundamental analysis –

Initially it’s a bit difficult to understand fundamental analysis because we are not aware about these technical terms. Let’s give you a brief description about fundamental analysis what all is included in fundamental analysis

It include P/E ratio, Balance sheet analysis etc.

Is stock market a gambling?

This is misconception amongst masses that stock market is a gambling. Indian stock market is regulated by SEBI (Security and Exchange board of India), the role of sebi is to safeguard the interest of invetors. Those who don’t understand stock market and invest in it without doing proper research will loose their money in this market and give it a tag that it’s a gambling or speculation. As per our understanding stock market is not gambling. Invest free into it.