How to Learn Share Market
How to Learn Share Market
The stock market holds great intrigue within our economy, with discussions of its rises and falls permeating news and workplaces.
With the enticing prospect of promising profits, you may find yourself interested in delving into trading within the stock market.
However, your lack of knowledge about the market and its mechanisms might be holding you back. Don’t worry, as we provide a comprehensive guide for anyone seeking to learn about the share market.
First and foremost, let’s grasp the concept of a share market. The share market serves as a centralized platform where buyers and sellers convene to trade shares of various companies.
Traders can participate in offline trading at physical stock markets or conduct their trades online through trading platforms. If you choose offline trading, you’ll need to place your trades through a registered broker.
The terms “share market” and “stock market” are interchangeable. In India, there are two primary share markets: the Bombay Stock Exchange and the National Stock Exchange.
Only publicly listed companies, those that have undergone an Initial Public Offering (IPO), have shares available for trading.
Distinguishing between trading and investing lies in the duration for which you hold shares.
Trading involves buying and selling shares in the short term, while investing entails holding onto shares for an extended period and liquidating them in the long term.
Whether you choose to trade or invest in the share market, it is crucial to make informed decisions. Ensure that you invest money you can afford to lose, rather than risking your life savings.
There are guidelines and strategies to help you stay focused and increase your chances of profitability, but exercise caution when engaging in share market trading or investing.
Now that you have a grasp of the fundamentals of the share market, let’s explore some ways to learn about trading and investing in the stock market.
Open a Trading Account
A practical approach to grasp the functioning of trading is to open a trading account with a reputable financial firm.
If you don’t already have a trading account, it is a straightforward process to create a new one. Choose the financial firm of your preference, complete an application along with the required documentation, and once the verification process is complete, your trading account will be activated.
Online applications often offer a seamless and paperless experience, allowing you to start trading in less than half an hour.
Through the online trading platform and your trading account dashboard, you can familiarize yourself with various trading options, types of orders, and the layout and components involved in trading.
Depending on the financial firm you choose for your trading account, you will have access to various free tools that aid in understanding the market and assist in strategizing your trades.
Get Knowledge From Books
Reading is always a reliable choice for learning. There is a wide selection of books available that cater to both beginner and experienced traders.
When choosing a book as a novice, prioritize those with simple language to avoid getting overwhelmed by jargon.
You can ask your peers for book recommendations or conduct a simple online search to find the right book that suits your needs. Books serve as a treasure trove of valuable information and can be a cost-effective learning resource.
Read Blogs and Articles
There is an abundance of articles available online about the share market, authored by a diverse range of writers.
From investment experts like Vishal Dhawan, Suresh Sadagopan, Renu Maheshwari, Vivek Rege, Kalpesh Ashar, Lovaii Navlakhi etc, to amateur investors located across the globe, you can find articles that provide valuable information and guidance.
It is valuable to read about the experiences of renowned figures like Mr. Buffet, but it is equally important to learn from the experiences of other novice investors.
Both perspectives offer unique insights. You can set up Google alerts to stay updated on articles published by well-known writers in the share market or on specific topics, ensuring that you don’t miss out on any relevant information.
Learn With a Study Buddy
Understanding the intricacies of the share market can be a daunting task. Having a study buddy can provide the necessary motivation to tackle this challenge together and vice versa.
It also enables you to engage in discussions, share insights, and learn from each other’s perspectives.
Additionally, you can consider splitting the costs of books and other resources with your study buddy, making your investment in learning more affordable and cost-effective.
Get Help From a Mentor
The world of the share market can appear intricate and complex for those who are new to it. To navigate through this maze, seeking a mentor can be immensely beneficial.
A mentor can be someone with experience in the share market, such as a friend, family member, colleague, professor, or any trustworthy individual.
It is important to choose a mentor who is willing to answer your queries and provide clarifications whenever needed.
They can offer personal insights and anecdotes that provide a unique understanding of the share market. A mentor can also recommend valuable learning resources, such as books or articles, and assist you in identifying potentially valuable resources.
However, it is important to be cautious of individuals who claim to possess extensive knowledge about the share market without actual trading experience.
Avoid relying on guidance from online forums and chat rooms, as they often lack credibility and can lead to trouble.
Watch Successful Investor
It is valuable to follow individuals who have achieved success in the share market. While the share market is often a “learn from mistakes” environment, you can also gain insights from experienced investors like Vishal Dhawan, Suresh Sadagopan, Renu Maheshwari, Vivek Rege, Kalpesh Ashar, Lovaii Navlakhi etc.
Whether they share advice in a tweet or write a book about it, every lesson they offer can contribute to your learning. However, it is important to exercise discretion and not blindly follow their recommendations.
News channels and TV shows provide a wealth of knowledge about local and global market events. Panel discussions on investment strategies, market opportunities, and timing can be informative.
Not every TV show will provide useful advice, but watching these programs can help you understand the language of the share market and familiarize yourself with key players and companies.
Channels like CNBC and ZEE Business are reputable sources of information. Dedicate a daily 20-minute session to listen or read about share market news and the economy.
Over time, you will develop an understanding of how various factors, such as oil prices, political stability, foreign investments, and performance of other markets, influence the share market you intend to trade in.
Examining past trends and news articles will also provide insights into the history of companies and their stocks.
By reading the daily headlines of leading financial news platforms, you can gain a better understanding of the share market.
Discussing the news with your mentor or study buddy can help you delve deeper into understanding the implications and significance of ongoing events.
Learn Share Market Online
For individuals dedicated to understanding the share market, investing in an online course or workshops conducted by economists, traders, or investors can be highly beneficial.
These educational programs offer a comprehensive understanding of how the share market operates.
Attending seminars focused on specific aspects of the share market, such as intraday trading techniques or identifying safe stocks, can also be advantageous.
However, it is crucial to exercise caution. Before enrolling in any course or workshop, thoroughly evaluate the credentials and background of the instructors to ensure the learning experience will be valuable.
Read reviews from past participants regarding the speaker’s expertise, the material taught, the provided resources, and the overall value of the course.
One negative encounter with an ill-informed speaker can be demotivating, so it is important to choose wisely and make an informed decision.
Finally, Buy Your First Stock
Utilize your trading account by purchasing a few shares to gain practical experience in the share market. You don’t have to invest a significant amount or buy expensive shares.
Even with a few hundred rupees, you can learn a great deal about the share market through trading.
This is an opportunity to apply the knowledge you’ve acquired. You’ll learn which shares to buy, how to place orders, when to sell, and when to buy. Trading with real shares will provide answers to these questions.
Additionally, there are virtual trading platforms available that simulate the trading experience. While the process remains the same, you don’t need to invest real money to buy shares.
This allows you to learn about the share market in a financially risk-free environment, further enhancing your understanding of trading dynamics.
