Stock Market - Basics to Guaranteed Profits in Long Term

Stock market like any other trade should be respected and taken seriously. There are many profit gurus online who will influence you with their opinion about trade and limits of the stock market but with a disclaimer “Please study the market before investing “.

One of the biggest influence - Friends who want to make an impression by suggesting you to buy certain stocks which they have read in newspapers, apparently already read by million others. So why are not everybody raking in the moolah from the profits of the stock market.

One simple suggestion for people who want to become rich overnight is that share market is NOT for you. The attractiveness of the lucrative green figures you see on the screen is actually not for everyone. You simply cannot earn money without putting in the hard yards. An easier & a better probability of booking a profit would be to purchase a lottery ticket at a very cheap price.

Very simple tips from an average hard working guy to another:

1. Learn about the basic working of a Stock Market. It is always better to learn to fly a plane before sitting in the cockpit.

2. Learn about the company’s nature of business, its sector and most important its influence in that industry - is it major or minor ?

3. If you don’t have accounting knowledge, do not worry, most people don’t. Many blogs , Youtube tutorials are available online to get a basic understanding of company financials, stock market terminology, etc. Maybe in future, I would try to delve in some basic terminology & company financials to look out for.

4. After having some clarity on basic principles of stock market and fundamentals of a company, start to trade with virtual money on various platforms available online. For example, I started practicing on www.moneycontrol.com .

5. Use the same amount of virtual money that you will invest in stock market actually. It will give you a proper forecast of profit and loss. If people want to build fake confidence then Zynga Poker is a brilliant game where you can go all in millions.

6. Have patience and try this virtual practice for at least 4 months because 1- 2 months is a very narrow term to give a proper image of market as its better to go through both bullish and bearish phases of the market.

7. Start your trade once you are confident enough. Consider it like running a real life business & treat the capital as if you have borrowed it from your in-laws. It helps being a conservative investor.

8. VALUE YOUR TIME - Working in equity market requires a lot of time because one has to dedicatedly follow news, industry reports, quarterly or annual earnings of the company. You should never try to invest just because a friend earned some profit. The entry-exit for him was different for his investment. Every minute is different in stock market, so don’t just copy & paste. You will maybe earn less, but save a lot by not making hasty losses.

9. Set aside all the greed and temptation to always earn a jackpot. Most people think of doubling their value and end up losing the little profit their share was giving earlier. Set a profit level limit. Keep it nominal. Compound profit of many such transactions will be more than single profit which you will hardly earn in one script.

10. Always keep a stop-loss because you never know few uncertain situations can reduce the share prices drastically.

Thank you for reading this. I will keep giving insights on the stock market to enhance your basic way of thinking which will unearth your analytic prowess to take decisive calls of buying & selling shares in the equity market without anyone’s help.