How to buy shares online as beginner in india  

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Sagar Shirsat
Member Admin
Joined:6 months  ago
Posts: 4
23/07/2017 7:06 pm  

how to buy shares online as beginner : You've now learned what a stock is and a little bit about the principles behind the stock market, but how do you actually go about buying stocks? Thankfully, you don't have to go down into the trading pit yelling and screaming your order.

Very important : 

There are two main ways to purchase stock:

1. Using a Brokerage

The most common method to buy stocks is to use a brokerage. Brokerages come in two different flavors. Full-service brokerages offer you (supposedly) expert advice and can manage your account; they also charge a lot. Discount brokerages offer little in the way of personal attention but are much cheaper. At one time, only the wealthy could afford a broker since only the expensive, full-service brokers were available. With the internet came the explosion of online discount brokers. Thanks to them nearly anybody can now afford to invest in the market.

Also read :

2. DRIPs & DIPs Dividend reinvestment plans (DRIPs) and direct investment plans (DIPs) :

are plans by which individual companies, for a minimal cost, allow shareholders to purchase stock directly from the company. Drips are a great way to invest small amounts of money at regular intervals.

this is how to buy shares online as beginner short post for you.


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Sagar Shirsat
Member Admin
Joined:6 months  ago
Posts: 4
23/07/2017 7:39 pm  

PART 1

Researching and Choosing Stock:

1. Perform a technical analysis: Technical analysis is an attempt to understand market psychology or, in other words, what investors as a whole feel about a company as reflected in the stock price. Technical analysts are normally short-term holders, concerned about the timing of their buys and sells.If you can detect a pattern, you might be able to predict when stock prices will fall and drop. This can inform you about when to purchase or sell certain stocks.

  • Technical analysis makes use of moving averages to track security prices. Moving averages measure the average price of the security over a set of period of time. This helps traders more easily identify trends.

2. Identify patterns: Patterns identified in a technical analysis include identifiable price boundaries in the market price of a stock. The high boundary, which the stock rarely surpasses, is known as the "resistance." The low boundary, which the stock rarely dips below, is called "support." Identifying these levels can let a trader know when to buy (at resistance) and when to sell (at support).

Some specific patterns are also detectable in stock charts. The most common one is known as "head and shoulders." This is a peak price then drop, followed by a taller peak then drop, and finally followed by a peak similar in height to the first. This pattern signals that an upwards price trend will end.

There are also inverse head and shoulders patterns, which signify the end to a downward price trend.

3. Understand the difference between a trader and an investor: An investor seeks to find a company with a competitive advantage in the market place that will provide sales and earning growth over a long period. A trader seeks to find companies with an identifiable price trend that can be exploited in the short-term. Traders typically use technical analysis to identify these price trends. In contrast, investors typically use another type of analysis, fundamental analysis, because of its focus on the long term.

4. Learn about different orders traders make: Orders are what traders use to specify the trades that they would like their brokers to make for them. There are numerous different types of orders that a trader can make.

For example, the simplest type of order is a market order, which purchases or sells a set number of shares of a security at the prevailing market price. In contrast, a limit order buys or sells a security when its price reaches a certain point.

For example, placing a buy limit order on a security would instruct the broker to only purchase the security if the price fell to a certain level. This allows a trader to specify the maximum amount he or she would be willing to pay this way, a limit order guarantees the price the trader will pay or be paid, but not that the trade will occur.

Similarly, a stop order instructs the broker to buy or sell a security if the price rises above or falls below a certain point. However, the price that the stop order will be filled at is not guaranteed (it is the current market price).

There is also a combination of stop and limit orders called a stop-limit order. When the price of the security passes a certain threshold, this order specifies that the order become a limit order rather than a market order (as it does in a regular stop order).

5. Understand short selling: Short selling is when a trader sells shares of security that they do not yet own or have borrowed. Short selling is typically done with the hope that the market price of the security will fall, which would result in the trader having the ability to purchase the security shares for a lower price than they sold them for in the short sale. Short selling can be used to make a profit or hedge against risk, however it is very risky. Short selling should only be done by experienced traders who understand the market thoroughly.

For example, imagine that you believe that a stock currently trading at $100 per share is going to decrease in value in the coming weeks. You borrow 10 shares and sell them at the current market price.

You are now "short," as you have sold shares that you didn't own and will eventually have to return them to the BROKER a few weeks, the price of the stock has indeed fallen to $90 per share. You purchase your 10 shares back at $90 and return them to the lender.

This means that you sold shares, that you didn't have, for $1,000 total and have now replaced them for $900, netting yourself a $100 profit. However, if the price rises, you are still responsible for returning the shares to the lender. This potentially unlimited risk exposure is what makes short selling so risky.


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Sagar Shirsat
Member Admin
Joined:6 months  ago
Posts: 4
23/07/2017 7:48 pm  

Now a day, buying a stock is as simple as recharging your mobile or transferring money. All you need is computer with internet connection, a bank account and some money in that account, obviously.

If you have seen movie Guru (in which Abhishek Bachchan was in leading role based on life of Dhirubhai Ambani), the scenario of stock market might scare you. But it was something like 50-60 years back. Now, no physical appearance, no much paper works are required. You can buy a stock sitting in your room in front of your laptop and that too within 2 minutes. How? That’s what I am going to teach you now. How to buy a stock in stock market? Just be with me for the next 5-10 minutes.

Buying shares online is the easy task, but I believe first you need to find that right stock that you should buy. There are few basic work which you should go through to find the best stock for you:

Read and Research:

There are tons of websites on the internet where you can get tutorials for stock market basics and about how to buy a stock in Stock Market? For beginners, I will recommend to follow websites of money-control, economic times and good investment.

There are few books which are must read for the beginners in stock market. They are:

  • The Intelligent Investor
  • One Up on the wall street
  • Beating the street
  • Common Stocks and uncommon profits

 

 

Get good financial knowledge:

A good financial knowledge is the key for the success in the stock market. You need to understand the fundamentals before entering the stock world. The basics ofEarnings per share(EPS), P/E Ratio, Book Value, P/BV, Dividend, Return on Equity(ROE), Return on capital employed(ROCE), debt/equity ratio etx should be known to you before you analyze a stock. You can read further about from these links: Investment BasicsSix Different Types of Stock in Indian Market according to Peter Lynch

Make your dummy portfolio:

A portfolio is nothing but your collection of stocks from different or same sectors. A portfolio shows how many shares you are owning from which sector. Generally, a good portfolio maximizes the profit and minimizes the rist. You can learn how to create your portfolio from this link: How to create your Stock Portfolio?

Follow the stock you’re interest in for few days:

The last step before buying a stock from stock market is to learn how to follow stocks in the stock market. You should know how to track stocks so that you can buy/sell them at the best time. I advice the beginners to at least follow the stocks for 1 month before buying them. You can learn how to follow a stock from this link: Learn how to follow Stock Market and trends- Trade Brains.

Now that you know all the basics for the stock market, you can move further for How to buy a stock in Stock Market?


How to buy a stock in Stock Market?

The basics requirements for buying a stock in stock market are:

  1. Stock broker: General people can’t go to a stock exchange and buy/sell stocks. Only members of the stock exchange can buy and sell and they are called the brokers. Every broker should be registered on the Securities and exchange board of India(SEBI). There are a number of brokers/ sub-brokers which you can choose for trading. Some online brokers are SharekhanKotak SecuritiesICICI Direct5paise and India Bulls.
  2. Saving Account: Obviously you need a saving account for trading in the stock market.
  3. Demat A/C: It’s very simple to open a demat account. Now a day, the banks even offer you to open 3-in-1 account, i.e. all three Saving+ Demat+ Trading account, by filling few forms just once. 3-in-1 account will save your timing a lot and I recommend you to open a 3-in-1 account if you want to start trading in the stocks. You can open it in banks like ICICI, SBI, Kotak etc.

    Note: If you open a 3-in-1 account you won’t need to find a stock broker as trading account is already included in it.

  4. Laptop and Internet connection: Obviously, the soul of modern era which is a must for all the online facilities.

NOTE:

The documents required to open a 3-in-1 account are PAN card, Aadhar Card (for address proof) and an ID proof (generally Aadhar/Pan card can also be used as ID card). Once you opened your demat account, you will receive your username and password, and then you can start trading using your account.

I hope this answer is useful for the readers. Further, if you want to read the complete post, you can find it here:


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