The basics of stock market

Stock market is a very lucrative industry. However, only 1% of Indian population invest in the stock market. As more and more people enter this industry, money will flow like anything. In this article, we will help you clear all the basics of stock market.

Opening a demat account

The first thing to start with is opening your demat account. If you don’t have a demat account you would not be allowed to trade in the stock market. A trading account is very similar to your bank account. You keep money in your bank account and you keep shares in your demat account. The good news is that opening a demat account is very easy and hassle-free. All the process is online and you will not have to go anywhere. You should have all the documents required to open a demat account.

Trigger price, stop loss and target price

When you trade in the market you have to deal with three types of prices: trigger price, stop loss and target price. The price at which you want to buy the share is called the trigger price. You have to find out the trigger price of a stock as per your analysis. Stop loss is the price at which you are willing to sell the share if the stock moves against you. You should not sit on losses. You should have a plan where you would book your loss and move ahead. Target price is where you aim the price to reach.

Technical charts and indicators

To be successful in the stock market you have to master the art of chart reading. The chart will contain green and red candle that captures the price movement of the stock. These chart is the language of the market. The day you understand this language, you would be a successful trader. Indicators are devised by renowned trader to assist in trading. You have many different indicators like moving averages, relative strength index, moving average convergence divergence, etc. You should start reading more about indicators if you want to predict price movements.

The right psyche

Nothing can help you in the market if you don’t have the right mindset. The mindset of a trader is very different from common man. This is why it is said that you don’t need a very good IQ to trade in the stock market; all you need is the right attitude. Most of the new investors and traders want to master the market. You should understand that market is supreme. You would never be able to conquer it. The day you think that you have found the key to price action, market will change the lock. All you can do is master your mind. Have a trading strategy and follow it without fail.

To sum up

Before diving into this unknown you should spend considerable amount of time in learning about the market. The more you learn the more you would earn. You would need a trading account and Demat account to trade in the market. You should go ahead and open an account with 5paisa. They are one of the best brokers in the market.

About RJ Frometa

Head Honcho, Editor in Chief and writer here on VENTS. I don't like walking on the beach, but I love playing the guitar and geeking out about music. I am also a movie maniac and 6 hours sleeper.

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