Investing in stocks is very popular in the digital age we live in. But it can be difficult to make sense of the stock market if you’re a beginner. This is why before you invest, it’s good to consider expanding your basic knowledge on how the stock market works. To begin with, let’s understand the meaning of the stock market.
What is a stock market?
A stock market is a marketplace where investors come to buy and sell shares in public companies listed on it. The National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) are the two largest stock markets in India.
Why Investing In The Stock Market Is Becoming Popular These Days?
There’s potential to build your money - Investing in the stock market is a good career option for young girls and women to smartly learn to grow money. You can then use those funds to invest in your own dreams, like opening your own business. But think of stocks as an option to do alongside completing your studies or doing a regular job.
You don’t need a large sum of money to start investing in the stock market - If you’re a student or a stay-at-home mom and don’t have large earnings, there’s no need to walk away from investing in stocks. You can still start by putting in small amounts like rupees 100, 200 or even 500. We’d also like to advise you that investing in stocks comes with risk; this is why it’s better to start investing in small amounts to avoid making huge losses.
It’s easily accessible - Having a degree in finance is always great, but there are many stock investors who do not have a degree but are still successful after learning. There are also plenty of online tools available that make investing in stocks fairly easy. To invest, you’d need a DEMAT account, and there are several online platforms that have made it simple to open this type of account.
Why Take A Stock Market Trading Course?
1. You Learn The Difference Between Technical And Fundamental Analysis
Two terms that you’ll come across often when you invest in stocks are Fundamental and Technical Analysis.
Fundamental analysis is about knowing the reputation of the company you’re going to buy a share in. If the company’s fundamentals are strong, then the stock price will be strong. Learning if the company is reliable and mature enough is something you can learn in a stock trading course.
Technical analysis is about seeing data on how the company money is distributed and utilised. For this type of analysis, it’s necessary to learn the price patterns of the share of a company by studying charts. How to read different types of charts and what indicators to look for can be understood in a fundamentals of technical analysis course.
2. It Increases Your Knowledge On The Basics Of Trading
It is necessary to study the market and know which stock to buy and when. There are certain techniques that must be kept in mind to get a profit. There are many different types of indicators to look out for when investing in the stock market. You need to make predictions, but to do so you have to find patterns in the stock price. There are the types of things that you can learn in a stock market trading course.
3. You Understand How To Manage Risks
Investing in stocks can get you profit, but there is quite a lot of risk involved. You could lose your money if you don’t invest wisely. It’s necessary to reduce risks and increase the potential for profit. For this, it’s important to take a course on the fundamentals of the market structure, so your foundation information on investing in stocks is strong.
4. You Learn It At Your Own Pace
A stock market trading course is a great option for women and girls looking for a new career because you can do the course in your own time. If you don’t understand a concept, you can replay that part and learn it all over it. A course also provides you with information in a structural manner, so you begin to understand and think technically about investing in the stock market.
Increasing your probability of success when learning how to trade stocks
Traders can dramatically increase their probability of success if they spend more time working on managing their trades and where to exit. That's because trading for profit is about using sound money management rules and good exit strategies, which in essence, is about following the golden rule of let your profits run and cut your losses short.
When setting a stop loss it needs to be far enough away from your entry price to allow the trade to settle in to the trend, but close enough so as to protect your capital. Regardless of whether you are trading or investing, everyone needs to use a stop loss or have an exit strategy each and every time they trade. Failure to do so will result in taking unnecessary risks, less profits and larger losses.
There are various stop losses you can use depending on what you are trading. For example, the stop loss I use for blue chip shares is different to the one I would apply for a speculative share. As a general rule of thumb, I always set my stop loss 15 per cent below my purchase price when trading blue chip shares although this will vary depending on the volatility of the stock.
No matter what your goal is when it comes to trading, it is essential to your long-term success as a trader to not follow the herd or the 90 per cent of traders who fail, instead follow the rules and principles of the successful 10 per cent. To finish up I will leave you with my top 10 share tips for traders and investors to profit from when learning how to trade stocks.
- Don’t dollar cost average
- Don’t buy stocks just because they appear cheap
- Don’t buy and hold
- Don’t over use leverage
- Don’t be affected by the herd mentality
- Use stop losses to protect capital and always manage your risk
- Buy only top quality stocks
- Trade well, not often
- Diversify but not too much
- Lastly and most importantly - educate yourself!
Join the Spiking Alpha Conference
We are finally hosting a live event where you get to see Dr. Clemen Chiang live in action! A very specially curated goodie bag is made for this event where we include 6 precious items carefully thought of by us. This meet and greet is a special one as you get to attend live market updates that you will not want to miss out on from Dr. Clemen Chiang. For more information, you can click here!
For overseas students who are not able to join the event physically but wish to get the goodie bag, you can still purchase your ticket, and we will post the goodie bag to your home address! Do drop us a message or WhatsApp us so that we can send you the form to fill up your details!