How To Start Trading in the Stock Market for Beginners?

How To Start Trading in the Stock Market for Beginners?

Trading is intriguing, and with increasing financial literacy, people are becoming inclined to learn trading like never before. Even a few years back, trading was thought to be too risky, but now people are realizing that with the right and best courses for the stock market, one can grasp the concepts of trading and have a passive income or even a full-time career out of it. But how to start trading in the stock market as a beginner is the most common question that people ask when they get interested in it. So, let’s address this today through this blog.

Here in this blog, we will be discussing the process of getting started with your trading journey without any hassle. We will start with the learning aspect and then other factors like opening a Demat account, risk management, starting slow, and lot more.

Learn The Basics of Trading

First things first, to begin your trading journey, you need to learn the basics of trading and the stock market. It is important to understand how the market works. Learning fundamental and technical analysis is crucial for your trading journey. You can learn these with Sock market courses for beginners, which are available online. You can find hundreds of these courses, but make sure you choose the right one that gets into the insights of the market and the trading techniques and tools.

Different Segments of the Share Market

The equity market is divided into certain segments. These segments differ in terms of investment.

• Equity Cash Segment: The first and most popular segment in the stock market is the equity cash segment. It is also known as the equity spot market or cash market. It is the segment where the buying and selling of stocks of different companies happen. The buyers and sellers of any stock openly buy and sell the security. One can either buy or sell the stocks in this segment in the same trading session, which is known as intraday trading, or take delivery.
• Derivatives: In this segment, the buyers and sellers do not directly purchase or sell the securities. Instead, they enter into a derivative contract to buy or sell assets at a specified rate on a specified date. The derivative contracts derive their value from the underlying asset’s price movement. So, here the buyer and the seller do not pay for the asset’s actual price for buying or selling it.
• Mutual Funds: Mutual Funds are one of the most common segments in today’s time, as they help in passive investment. Here, you do not invest in a single security; rather, you invest in a basket of different securities with the same objective or theme, or other criteria. Mutual Funds are offered by Mutual Fund Houses, Asset Management Companies, where fund managers build different schemes as per different investment goals, and you can pick the scheme that aligns with your investment goal. Here, you do not invest in stocks or other securities directly; instead, you invest a lump sum of money, which grows over time, or via the Systematic Investment Plan (SIP) method.
• IPOs: Finally, we have IPOs – Initial Public Offering. As the name suggests, it is the first instance when a company issues its shares to the general public. You need to subscribe to the IPOs, and then you can get allotted the shares of the company. IPOs take place in the primary market, unlike the above segments, which are part of the secondary market. Once you are allotted the shares you subscribed to in any IPO, then you can sell them in the secondary market, once the company gets listed on the stock exchange post IPO.

Once you are ready, it’s time to find your broker.

Choose a Reliable Brokerage House

For trading and investment, you need a brokerage house as they are the mediator between you and the stock exchange. So, choosing the right brokerage house is crucial for a beginner.

• You can check a reputable stock brokerage online
• Then check which brokerage houses are registered with the Securities and Exchange Board of India (SEBI)
• Now look into the brokerage charges, account opening and maintenance charges, facilities, tools, customer support, and research support they offer
• Shortlist a few of the top brokerage houses offering the best of these factors
• Then pick the one that aligns with your trading budget and plans

Open a Demat and Trading Account

Once you choose the brokerage house, it is time to open the Demat and trading account.

A Demat account is like a bank account where the shares and securities you purchase are stored in digitalized/ electronic format. On the other hand, a trading account helps in buying and selling these securities.

With digitization, you can now open a Free Demat Account online without any hassle.

All you will need are as follows –

• You will need to enter your details such as name, occupation, and address
• Enter your PAN card details, AADHAAR Card details
• Then add your bank account details
• And done, your account will be activated.

Funding your Trading account

The next step is to fund the trading account. So, it works like you deposit a certain amount in the trading account. Then, when you purchase stocks, the amount required for the purchase gets deducted from your trading account. On the other hand, when you sell stocks, the sale proceeds get credited to your trading account after the settlement period. Then you can send the amount to your bank account or keep the same in the trading account for future trades.

To fund the trading account, you can use UPI, Net banking, or any other options offered by your brokerage house.

Research, Analysis, and Risk Management

This is one of the crucial steps of trading. When you are starting as a beginner trader, you need to focus on the research and analysis as you are learning. You can use different free stock market courses to learn how to use the technical charts, to understand entry and exit points, market trend, momentum, and other such factors involved in trading.

For fundamental analysis, you can do an in-depth company profiling to understand the company’s prospects, future potential, and whether the company is undervalued or overpriced. All these you need to understand before trading stocks. To learn fundamental analysis, you can join an Equity research analyst course.

Picking the right stock, at the right time and right price, is important in trading. While no one can time the market, analyzing it can help you mitigate risk. This brings to risk management tools you need to learn to use to become a trader.

The available trading course online for free also helps you learn risk management, which you can apply while trading. For instance, you can learn how to use stop loss for your orders so that you can limit your losses.

Start Slowly but be Consistent

Finally, the most important thing you need to do as a beginner in the stock market is to be slow and consistent. Do not start with big trades, as if the trade ends in losses, then it can break your morale and also your pocket.

Start with a few stocks, understand what it working for you and what’s not. Then gradually increase your bets. Consistency is the key. If you just purchase a massive number of shares or buy some expensive shares and then it ends in losses, then you may be able to recover it. Rather, regularly buy and sell a few stocks according to their performance. If you are not able to find a good pick in a few days, don’t rush; wait for the right opportunity.

Find the Right Stock Market Course

To begin your journey in the stock market, you should take up a stock market basics course, and to help you find the best one, here are some tips –

• As you are beginning your journey, look for courses that are specifically designed for beginners in the stock market
• Once you shortlist a few share market free courses, you should read the course content in detail. Check which courses cover all the aspects of the stock market that you need to know as a beginner
• Next, read about the expert or mentor who will be your guide and instructor for the course. Choose instructors with more experience, with industry knowledge, and you can also check the reviews to find the best mentor
• Check the support offered by the team
• Compare the prices of the share market basic course, if they are not free
• And finally, pick the one that suits your goals the best.

Wrapping Up

So, trading can be lucrative only if you learn how to do it right and be consistent. Start with the best courses for the stock market, learn about the basics, and then go deep to understand the insights of the companies, the industries, and the overall market. Then start slow with small trades and slowly increase to mitigate risks.