How to take first step to make money in share market?

People are attracted to share market because they think they can make good and fast money. But in reality, there are only a few people who did. It is not easy that any Tom, Dick or Harry can make huge money. The people who make money are one who is disciplined and have a lot of patience and a lot of research. Deep understanding of the market is also necessary. Knowing an overview of Indian stock market is appreciable.

How to take first step to make money in share market

In the last few years, it has seen that share market is being quite volatile. Investors and traders are unable to decide their future strategy. Should they sell, buy or hold? It is hard to predict market movement. One should take precaution to get a fair share of profit making stocks, compare to loss-making stocks.

There are certain rules and observation which can help to make a profit in this volatile share market. In other words, it is necessary to know the money making tricks from share market.

How to make money in Indian share market?

  1. Trade with surplus funds only

Many people take a loan and they invest in share market. When they lose, they are unable to even pay interest on the loaned amount. This is especially more true for new traders. The best way is to start with a small amount. Small amount means an amount which, if lost will not create a great disturbance in your financial condition. Turbulence in your smooth going life.

Once you start earning, in the initial phase you can reinvest profit earned. You should not take a loan for investing in share market whatever the market condition is.

Must Read: How Do You Invest in Stocks for the First Time?

2. Do not go with the crowd

If possible avoid herd mentality. The decision to buy, sell or hold depends upon what you hear in the market. In some cases, family or friends may influence your decision. If your friends or colleagues are buying/selling certain stocks, you do not go with the same. You should use your own research before buying or selling any stock. Going with the crowd strategy does not work for a long time.

Warren Buffet once said, “One needs to be fearful when others are greedy and greedy when others are fearful”. That is, move opposite of the market trends. When everyone is selling then buy. When everyone is buying then sell.

  1. Identifying the kind of trader you are

Broadly speaking there are two types of traders. One kind of trader is who go with fundamental investing. They are usually called investors. They give less importance to day to day price fluctuation. They also give little importance to the price. They are usually long-term players. They are more concerned with the fundamental strength of the company.

Other types of traders are speculative one. They are day traders. They give high importance to day to day price fluctuation. They are short-term players. Their gain/loss depends on the violent fluctuation of the market.

You should decide which one is the best fit for you.

Must Read: How to make a winning trading plan in just 11 steps?

 

  1. Never let greed influence you

When during the bull run people keep holding or buy new script in expectation of making more and more money. When market collapses suddenly, then they lose not only what they were to gain. But also a part of capital they have invested.

  1. Timing the share market

To gain good profit, the thumb rule is to buy when very low, to sell when very high. It is practically not possible to predict the high and low of the script. This is called timing the market in local parlance. Never ever try to time the market. Do not employ this strategy to earn. Because chances are you may lose more than gain. On consolidating your accounts you will see yourself at a loss.

  1. Disciplined approach

Even during the best bull run period, share market has given shivering moments to traders. Traders have panicked and sold/bought shares. That is even in bullish trend numbers of investors sell their stocks on hearing rumors and do not make much profit. Even they have made the loss.

One should have long-term gain in mind. For this, they should follow a disciplined and systematic approach. They should have a definite plan. Plan regarding the price of purchase. Plan regarding the price of a sale. The profit they expect. Disciplined approach generates outstanding returns.

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