Investing in the stock market can make you a lot of money, but only if you know what you’re doing. Here’s what you should know before taking your first step into the market
First step in the Stock Market
But just by following some very basic stock market knowledge, one can avoid risks and can survive in the domain. People make the market vulnerable by investing without sufficient knowledge. So it is important to make oneself fully prepared in all senses before the actual investment.
Before investing in the market, it is very important to gather information about the market. By making yourself aware of the stock market investing history, you will be able to formulate your investment plans properly. Basic stock market knowledge could keep you away from the risks of continuous ups and downs of the stock market.
Know how the market works
A modus operandi of the stock market depends on the basic relation of supply and demand. The technical jargons like equity shares, preference shares, debentures which are frequently used, will not cause problems if you acquire prior knowledge. The investor interacts in the market through a stock broker who works as an agent of the investor.
Investor instructs him to buy or sell a share after analyzing the market conditions. All transactions will be made through a D-mat account which will be operated by the broking agency. To buy or sell a stock you can either specify the price limit to the broker, or you can tell him to buy or sell at a best ‘fixed rate’. However, in a market which changes its conditions rapidly, it is advised to be more flexible in terms of price limits else you can miss good opportunities.
What and what to buy or sell
It is always advised to buy shares of an industry which is potentially good but yet to make its mark in the market. To do so, one has to be acquainted with the basic stock market knowledge of how an industry works, and how to determine its potential. One has to be very cautious of not to hold back on an industry by misjudging its potential.
One has to be very cautious of not to hold back on an industry by misjudging its potential. The time is crucial too, when it comes to buying or selling. By doing a thorough research of the ups and downs, one has to determine a stabilized period roughly. Then you have to wait for the right moment when the prices will go high, and you can hit the bull’s eye.
Points to Remember
1. Educate yourself about the market professionally before any kind of investment.
2. Always try to read the market and the minds of other investors
3. Do not become too much impatient or too reluctant when it comes to selling or holding back the stocks.