What if I tell you that there is a way for you to retire early and become richer than your boss? All you need to do is start off trading properly.
Unfortunately in our society, being involved in the stock market meant gambling. Thankfully this attitude of ours is changing and we are finally using this genie at our disposal. If you wish to get rich using the stock market – follow the steps below and pick a technique to implement.
Step 1: Find a broker.
There are various brokerage houses available, and each of them charges differently. There are discount brokers such as Zerodha or various other brokers like Anand Rathi that charge you money. It is your personal decision to choose between the two. There are considerable costs involved, such as maintenance charges, etc., that you must factor in before making a judgment.
Step 2: Open a Demat and Trading account.
Your broker will guide you through the process. You will have to fill a form online for discount brokerages, and some other brokerage houses might send an employee to your residence to get the formalities done.
A Demat account holds your securities with a depository while a trading account lets you place orders.
Step 3: Transfer money and start on your trading journey.
Then finally, all you need to do is transfer money and start trading. The minimum amount required might be different for different brokerages. This is the final step. You can transfer the funds by check, NEFT, or any other method at your convenience.
Note of Caution: We advise you to be careful while choosing a broker and do your due diligence. There have been situations where stockbrokers have gone bust, and SEBI has ousted them. It would be beneficial to choose a reputed established brokerage house(whether discount or otherwise) with a strong corporate governance history.
Strategies to help you start trading
Once you’ve completed the steps mentioned above, it is time for you to get familiar with some of the techniques and use them to generate returns from the stock market. Below we have explained 2 strategies to help you start trading.
- News Based Trading – this is an easy and commonly used trading strategy. It involves trading on basis of favourable/adverse news that directly/indirectly might affect a company.
For Example, Short-Selling HDFC Bank when Aditya Puri reportedly sold his shares.
While it is easy to implement, you need to understand how much effect the news is priced into the stock already. You will not make money on a stock with favourable news if the price already accounts for it.
- Basic Support-Resistance based Trading – again, this is very common in beginners because of how simple it is. You call your broker to find out the support and resistance level of a stock and trade accordingly. In case you use a discount brokerage, you can use the internet to find out Support and Resistance levels. You can use websites such as TradeView to find out these levels yourself.
- Trend-Based Trading – this is not at simple as the two techniques mentioned above. Trend-Based Trading basically involves you buying a stock that is already moving upwards. Irrespective of the corrections in the stock, you will ultimately have more money because you are moving with the trend. – “The trend is your friend”, as they say.
Apps you can use to help you trade
You probably have never traded before and if you wish to get some hands-on experience on what that feels like, you can use stock market simulators like StockGro and decide if trading is for you or not. You can test your existing strategies or try out the ones mentioned above at your convenience.
If you’re interested in calculating levels for yourself or if there is some other strategy you wish to use – you can use Tradeview(website) to access charts of various companies.
Requirements for Successful Trading
Trading/Investing can act like your way to financial freedom. As you progress with your journey, you will get better.
The steps at the top are ways to get an account started.
The techniques following that are proven strategies that are easy to use.
The apps mentioned can help you utilize your brains effectively.
Successful trading requires discipline, intellect, and patience – more so than most other activities. Successful trading can help you fulfill your dreams. All you need to do is follow what has been mentioned above and start your journey.