If you ask a man on street how are you going to become rich in few months? Well! He’s going to answer there’re two ways one is a lottery and other is stock market.
Here we’re not going to talk about lottery because you know what it is, but you don’t have any idea about stock markets.
Hence, in this blog we shall discuss how you can make money in stock markets.
Stock market is an over-heard term but still no one has clear idea about it.
Before you start piling up cash from investing in stock market you need to know some facts about it.
Who Should Invest in Stock Markets?
First thing you need to understand about stock market is who all can invest in it. Stock markets could be a risky business.
Anyone cannot take risk of investing his or her hard-earned money without realizing serious consequences.
A man or a woman investing in stock markets must’ve sound financial background. You can’t risk your money in a venture which is totally unknown to you.
You can’t wake up one morning and invest all your money in buying stocks hoping it will make you millionaire overnight.
Therefore, stock trading is not for everyone as you need a strong financial background as well as some degree of intellect.
Deep Knowledge Understanding of Markets
Stock trading is all about knowledge and understanding of markets, both domestic as well as foreign markets.
Just elementary knowledge is not going to work, rather you need to have in-depth insight about the behavior of markets at any particular time.
The challenge is how you are going to develop this knowledge because it is a vast area. You might’ve seen companies listed on BSE or NSE.
I am talking of those companies. The inner details like what’s going on inside the company, who all are the board members and what’s there background.
Moreover, you’ve to know the history and background of a company. Researching data like how a share of a particular company has gone up or down in last 10 years.
More the knowledge the better it is.
Choosing Your Stock Broker
If you feel you’re smart enough and have all the in-depth knowledge of a company then you can move on to choosing your stock broker.
In simple words, stock brokers are the middle man between you companies whose shares you’re going to buy.
If you’re interested in buying a stock of a particular company then they’ll do it for you however you’ve to give a commission or a fee.
While choosing a stock broker you must confirm that he or she is licensed one.
Stock brokers are present in every city of the country. You can contact them anytime.
But the best thing is you could ask your friends who’ve gone to stock brokers because they could tell you better.
Day Trading or Long Term Trading
Stock trading is of two types day trading and long term trading.
As a beginner you’ve to make a decision which one you’re going to choose.
I don’t think it’s going to be difficult for you. Let me explain.
Day trading is where you invest money for stock and you lose or gain in that particular day. If you bought a stock of a particular company then you’ve to sell it that day only.
However in long term trading you can wait and sell a stock whenever you want. You can wait and see if the price of the stock is going high then you can sell it otherwise wait for the right time.
Hence, it’s very clear about day trading and long term trading.
Day trading is very, very risky but that’s where you make money.
Long term is very less risky but money you make is smaller than day trading.
How to Choose a Right Stock at Right Time
If you’re clear about investing in day or long term trading then next is choosing a right stock that can make you millionaire.
Before buying a stock you’ve to analyze its prize, volume and time of it. You’ve to choose a stock that has right price in right volume and currently its momentum is very high.
Three things price, volume and momentum are factors to consider before you choose a stock.
Well! This is highly tough job as you’ve to analyze how a stock is behaving for some time. You have to keep a close eye on it.
Then you’re going to buy a right stock.
Analyzing Technical Charts
Analyzing charts could really help you in choosing a right stock. With the help of technical chart you understand complete history of a stock.
You could analyze a stock scientifically because it’s just technical.
However, technical charts could be manipulated. When a stock has a low lucidity and controlled by few people then it might be manipulated.
Therefore, in that case you can’t depend upon charts for choosing a stock.
Developing Your Sixth Sense for the Markets
For choosing a stock that can pay you millions you’ve to develop a deep insight about the markets.
You must cut down the noise that you listen daily. You might’ve listened to so-called stock gurus or experts on TV channels like CNBC, Bloomberg etc.
It’s really not necessary that you should choose a stock advised by these gurus or experts.
You should use your own brain and analyze the market. Self-education is the best way to succeed in stock trading.
Risk Involved in Stock Market
Finally, before you take a plunge into stock markets you must consider risk involved in this line.
It is my responsibility to tell you that stock trading is very risking business and a lot of people have lost everything.
Do not invest in this business if you’re not sure and know basics of it. You’ll repent later because you’re not going to get your money back.
Stock markets could make you a lot of money but you need an understanding and thorough experience of market, without it stock trading is just a lottery. If you win its good otherwise you’ll be on the road.
