How to Learn Stock Market -

Basics and Importance of Stock Market.

Before start how to learn stock market? First understand the Basic and Importance of stock market. All companies need money to run their business, so, companies invite normal people like you and me called Investors to put some money into their company so that they can run it efficiently and in return, investors get a share of whatever profit they make.
Investors have the opportunity to grow their wealth by participating in the stock market. Stock market is not just trading platform, change in stocks price are closely tied to economic performance. A rising market can indicate economic growth, while a declining market may signal economic challenges.

Now lets understand, How to Learn Stock Market?

Process of learning how to trade in stocks can be exciting and challenging experience. We will lead you through the fundamentals of beginning stock market trading in this article step-by-step. As a trader or investor, you will experience highs and lows along the way, as well as periods of success and loss. Thus, it is essential to have a firm understanding of both the primary and secondary markets.

Primary Market

A primary market is where companies issue new securities and offer them to the public. Where we invest through IPO (Initial Public Offering), we apply for companies IPO and get allotted. So, the transaction happens between issuers and buyers.

Secondary Market

In the secondary market, you can buy and sell shares that are issued in the primary market. The transaction takes place between the seller and buyer. Secondary market transactions are in which one investor buys shares from another investor at the current market price or at a price agreed upon by both parties.

The stock exchange or broker acts as an intermediary in the secondary market. There are a lot of term use in stock market. Here is a list of some commonly used terms when talking about the stock market.

NSE : National Stock Exchange was the first to implement screen-based or electronic trading in India. It is the fourth largest stock exchange in the world in terms of equity trading volume, as per the World Federation of Exchanges (WFE).

BSE : Bombay Stock Exchange (BSE) is the largest and first securities exchange market in India. It was established in 1875 as the Native Share and Stock Brokers’ Association. It is also the first stock exchange in India and provides an equities trading platform for small-and-medium enterprises.

Sensex : Sensex is a collection of top 30 stocks listed on BSE (Bombay Stock Exchange) according to market capitalisation.
Nifty 50 : Nifty 50 is collection of top 50 companies listed on NSE (National Stock Exchange)

SEBI : The securities and Exchange Board of India (Sebi) is the securities market regulator to oversee any fraudulent transactions and activities made by any of the parties: companies, investors, traders, brokers and the like

Stock Market Broker : A stock broker is an investment advisor who executes transactions such as the buying and selling of stocks on behalf of their clients.

Demat : Demat account, or dematerialised account, is a form of an online portfolio that holds a customer’s shares and other securities in an electronic (dematerialised) format.

Trading : It is the process of buying or selling shares in a company.

Equity : Equity is the value that would be received by the shareholder if all of the company’s assets were liquidated and all of the company’s debts were paid off.

Dividend : A dividend refers to cash or reward that a company provides to its shareholders. It can be issued in various forms, such as cash payment, stocks or any other form.

What is trading and investing in the share market?

The difference between trading and investing is the duration for which you will hold the shares. If you are trading, you will buy and sell the shares in the short term, while investment means holding on to shares for an extended period of time and liquidating them only in the long term.

Now that you understand the basics of the share market are, here are some ways to know how to learn share market.

Read books : Reading books about any subject is an excellent way to become knowledgeable about it. Similar to this, reading books about various financial instruments, investment methods, and even the autobiographies of famous investors can teach you a lot about the stock market.
With reading, you can never go wrong. A variety of books are available to suit both novice and experienced traders. Go through related articles.

It is a widely acclaimed book on value investing. the book aims at preventing potential investors from substantial errors and also teaches them strategies to achieve long-term investment goals.

Learn to Grow

Several authors have written countless pieces regarding the share market. Anywhere in the country, from expert investors like Warren Buffet to an unknown blogger, you may find guidance and information on the internet. Reading about the experiences of successful individuals such as Mr. Buffet is crucial, but it’s also necessary to learn about the experiences of regular investors. You may learn a great deal from each of them. To ensure you don’t miss anything.

Analyse the market : A lot of the strategies applied in the stock market stem from market analysis. You can learn a lot about which securities to pick and at what price by simply observing market trends. You can also read technical analysis charts to get a better picture of a particular stock.

Fundamental and technical knowledge of stock :
Study the fundamental and technical analyses of the stock to plan your trading. Fundamental analysis evaluates security by measuring its intrinsic value. It considers various factors such as earnings, expenses, assets, and liabilities. Meanwhile, the technical analysis predicts future possibilities for the stock by analyzing its historical price and volume history.

Keeping track of market news and events

News channels and TV shows are a great source of knowledge on what is happening locally and worldwide.

Note : You are advised to never invest in a share that has been recommended to you by someone on TV. At present this is a kind of manipulation.
It is good to watch these shows to understand the language of the share market, you will soon have an idea of how the different variables such as oil prices, political stability, foreign investments, performance of other share markets, etc. influence the share market you wish to trade in. Look at past trends and past news articles to know the history of companies and their stock.

In next article we will cover the proper path of how to trade or invest in share market