Tips For Share Trading For A Beginner

By Author: NiravSinghaniya
Total Articles: 27
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With electronic screen based trading, there are a large number of people who do online trading. These traders are either intraday traders, who buy and sell a share on the same day or are short term traders who will make investments for the short term.

If you’re a beginner who wants to start share market trading, then there are a few things you need to know before you make your first trades.

Here are tips for online share trading for a beginner:

Returns are uncertain:

Whether you do intraday trading or short term online trading, you need to understand that the returns are uncertain. The returns depend on a range of different factors. But it may not be possible for you to predict in which way the market will go. However, online share trading often depends on the calls you take and stocks you pick. This is why the stock selection is the most important part of these trades.

Pick liquid stocks:

When you pick a stock for share market trading, ...
... you need to make sure that it is a liquid stock which has a demand in the market. This is especially true for intraday trading. When you pick a stock that does not have liquidity, then exiting it can be a problem. This is why it is better to pick a stock that is frequently traded and that has a lot of buyers and sellers. When you open your trading account and select a stock for online trading, you can see the buyers and sellers for the stock. This can help you make a decision.

Decide an entry and exit price:

Knowing the entry and exit price is crucial to online trading India. The entry price guides you to when you need to make a purchase and the exit price helps you decide when to make gains from the investment. Any notional gain is not realised till the time you sell the investment. You can input the entry and exit price when you do online share trading, especially intraday trading. The trading account will automatically square off positions when the exit point is reached.

Pick a stop-loss price:

Along with the entry and exit price, another price you need to decide is the stop loss. The stop loss is an important number when you do share trading. The stop loss is the maximum loss you can bear on a particular trade. When you enter the stop-loss limit, if the share reaches the stop-loss price, the system automatically squares off the position and exits it so that your losses are limited. This price is important even for short term trades so that you can limit your losses.

Research your companies:

Before you make any investment, it is imperative to research the company. There is a lot of financial information available online with regards to the company. There are a lot of opinions online about whether to make investments or not and before you put any of your hard earned money in the stock market, you need to make sure to research the companies thoroughly.

You can start doing share market trading once you open a demat account and trading account with a reputed broker like IndiaNivesh who can provide the required backend support for making these trades.