We all know the attraction of the share market when the market is up and sentiments are positive. People are always attracted when the market is rising. The beginners always get confused on how to start and what would be the first step for the investment in the share market.
If you are an investor want to invest in the share market then the basic knowledge in the share market is required. But if you are a beginner or new entrants in the share market then you need to gain knowledge. You can't gain all knowledge in a day or two, it takes time. Your knowledge and experience in the market would count and can make you an investor or trader in the share market.
Here we would explain to you in details what would be your 3 important steps to enter into the share market.
Due to the lack of knowledge, most of the people having investable funds goes to the bank for FD/SB or post office deposits. People are actually ignorant about the power of the share market investment. In today's world if you want to beat the inflation and increase the standard of leaving then you can't ignore the share market investments. It has the potential of generating the highest revenue compared to other financial investment options. Knowledge, of course, is the first requisite for the market investment.
Share Market Knowledge
The first step that you should take as a beginner is gathering knowledge about the market, for this, you can start reading the share market page in the daily newspaper. You can go through what had happened on the previous day in the market, this will give you a fair idea about market activity. You can also gather knowledge from the business channels on television. In the evening all the business channel broadcast share market roundup/podcast, full days activities in half an hour, you can watch those type of program to gain knowledge.
Another important source of gathering share market knowledge is through websites/blogs. You can also gain knowledge by reading market-related blogs, watching youtube videos in your leisure time. The official website of BSE (bseindia.com) and NSE (nseindia.com) and moneycontrol.com can also enhance your share market knowledge.
You can also read How to choose a Stock Broker for Investment
Selection of Stocks for Knowledge
It is always better to focus 4/5 stocks in the initial days while gathering share market knowledge. The list should include the top Sensex or Nifty 50 stocks which are always in news like RIL, Infosys, HDFC Bank, Axis Bank, TCS etc. You may be working for a company or bank or may be doing business with any company having listed shares. You can also select such names. Likewise, you can select 4/5 stocks for tracking on a regular basis.
Virtual Trading for Knowledge
To make your trading knowledge into more practical you can predict the selected stock price for the next day. Whether it will go up or down, its daily levels and reasons behind the movement. You should spend daily 30-40 mins in the evening to read or watch the daily market happenings and predicting your selected stocks. You should always make a note of it for continuous monitoring and review your predictions.
Nowadays there many virtual trading websites and app and best one are Moneybhai its a website developed by moneycontrol.com and Moneyexcel it's an app. You can log in there, they will give you some virtual money to trade on shares and you can do buy and sell transactions on a dummy basis. You can also get reports like profit and loss, ledger etc.
If you continuously track the market and selected stocks at least for 3 months and start paper trading you would gain sufficient knowledge about the share market investment. But please remember that while gaining knowledge or at least in the initial days you should not open any real demat and trading account and should not invest any rupee into the share market.
While doing paper trading manually on a notebook or on website/app, it is very important to analyze each and every transaction you do, why your decision was correct or wrong. If a share market is moving one side into a positive direction you may be right in predicting your stock that's easy, but predicting in the sideways market is difficult. Please understand learning will happen only if you analyze the reason for the rise and fall of a particular stock. And if you successfully do this for at least 3 months then you would be ready to start investing in to share market.
Conclusions
Once you gathered knowledge and learned to predict stocks, done some paper trading then you can open an actual trading account through intermediaries (Brokers) with exchanges e.i NSE and BSE. It has become easy to open trading and demat account nowadays. You can open the trading account online with scan images. You need to be very careful and should read the Power of Attorney (POA) papers thoroughly before signing. You should only authorize for the delivery of shares in the POA not for anything else.
You may also like to read Want to open Online Share Trading Account? Here's what you should know
On submitting the completed set of documents, the broker will scrutinizes it and if everything is ok would allot a demat number and trading code. And then you would be ready to start the actual trading in the exchange BSE and NSE as per your choice.
We have mentioned 3 steps which you can follow if you are new or beginner in the share market investment. If you follow the process definitely you can start your share market investment without any training or mentor. It is advisable to start with a minimum amount or 1 to 10 shares first in the share market and after gaining full confidence you can increase the amount and quantity.
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Happy Investing!
Finogyan Team
