You do not need a big amount of investment to start investing in stock market .as a beginner it makes sense for you to start investment with a small amount or let say you can start your investment with only 10000 and gradually increase your investment as you gain more understanding of market . so in this blog we will see that how can we start investment with 10000 .
The service and service charge vary across the broker .
Indian stock market overview –
There are two types of exchanges in India namely Bombay stock exchange (BSE) and National stock exchange (NSE) .apart from these two there are also regional exchanges .However most of the trading happens through BSE and NSE ..
In India working market days are 5 .and the trading session is from 9.15 to 3.30.
Market Regulator – Securities and Exchange Board of India is the main governing bodies that regulates the functioning of all exchanges , brokers , depositors , mutual funds and all market participants in India .
Every company needs money to carry on its operations . for that purpose companies reach out to bank or investors for loan and to borrow money .
In this case the company must pays huge amount of interest .so to avoid huge costs of interest companies can raise money from the market by issuing its share to the public with no obligations of paying interest .
Share issue is the selling a part of the company to people or institutions who have money to invest . when you buy a share , you get share and give your money .
By investing your money in shares you will get an ownership of the company . the percentage of ownership will be proportional to the number of share you bought .
Income of the shareholders – shareholders enjoy capital appreciation . the share prices of the company increase as the company ‘s profit grows . Hence , you can sell your shareholding at a price greater than the purchase price and earn a profit .
Apart from price appreciation one can have also dividend income .
What should one need for investing in stock market ?
- Pan Card
- Bank Account
- Broker
- Demet account
- Trading account
Apart from the Bank account , you need to open a Demet Account to hold all your shares and securities in your name .you also need a trading account for buying and selling the shares .
Online Trading Platform – Online trading platform allow you to trade via the internet by using the trading software provided by the broker .
Features of the online trading platform
- Provides you with an independent automated trading platform .
- You can view the balances in your bank and demet accounts , and can transfer money from your bank to trading account , and vice versa .
- Provides access to various onlines tools to perform technical analysis of stocks .
- You can have full and direct control over portfolio .
- You can trade on both the markets i.e NSE & BSE by using the same account .
- Trading happens fast and without any significant delay .
- Online platform keeps you informed about the latest market news and movements .
What is market watch ?
It is essential screen in your trading account it gives you an insight about the current market position of the selected stocks in a tabular format .
It rows present the data regarding one share and displays the script name , the last traded price , last traded quantity best bid and ask rate , total volume traded etc .
All the information on the market watch window changes dynamically in the real time and gives you live market updates with refreshing the screen . understanding the market screen might sound intimidating in the beginning but you will find it easy to use when watch regularly . you can just trade in shares by just simply clicking on the market watch window .
What is charts?
All the trading platform provides the charting facillities now a days . these charts enable the investor to
- Create intraday charts with data for the only the current trading day.
- Create the historical charts with data of the past days .
- Open multiple charts simultaneously .
- Allow you to create different types of charts such as line ,bar , and candlestick .
- You can use technical analysis tool like RSI ,MACD ,etc and other indicators for analysing the stocks .
You can read more about line , bar and candlestick in later blog .
What are the various types of trading orders ?
There are various types of orders that can be placed in the market . you need to understand all the orders before you start buying and selling shares .Limit Orders – In this order you need to specifically enter the price at which you want to buy or sell the shares . if you decide to place a limit order you will have to expresly enter the price of your choice .
Market Orders – In the case of market order you donot needs to enter the specific price , instead you can get the order executed at the current market price that is prevailing in the market at the time of the trade .
Stop Loss Orders – In the stop loss order you need to enter the pricer to triggger the order . so such orders are activated when the trigger price in the order is reached . This order help in minimising the loss to a pre defined amount . such orders are always placed in the pairs . first you need to place the normal order then stop loss order to restrict the loss.
IOC Orders – IOC stands for immediate or cancel . in this case you place an order with the intention to execute instantly otherwise the order is cancelled. In this case if the order get partially traded then the remaining part of the order get cancelled automatically .
Things to keep in mind while placing the order is quantity box and order type . Once to enter all the information correctly you can go ahead by clicking on the submit buttons . It create an order and displays it to you .