Learn share trading, how it works, and how to develop your own share trading strategy. Read the tutorial and follow a step-by-step checklist to get started today.
Share market may seem like activity of chaos. However, it an efficient process that utilizes the buying and selling of securities. Before you make an investment through shares, you have to understand them. Learn share trading basics including what is share market, how to trade, and more.
Share trading explained
Share trading is a technique to build wealth. The process of trading shares has become a common word. You may have heard the jargon enough times. But What is share trading?
When you trade shares, you are buying or selling a company segment in the financial market. This process is also referred to as a stock exchange. Each share has a value. While a share value determines the company existing performance. However, future performance can impact share price as well.
What is Share Market?
Share market is a place where traders can buy sell ownership of investible assets. These shares trade on a stock exchange or over the counter. Shares are also known as stocks and equities. They represent fractional ownership in a company. However, share market efficiently functioning is critical for economic developing. Because gives companies the potential to access capital from the public in short-time.
Share Market Basics for Beginners
Share market for beginners can be a bit overwhelming. It is always wise to learn the basics of the share market. Whether it is the National Stock Exchange (NSE) or Bombay Stock Exchange (BSE), it is always important to learn share market jargons to get started.
- Blue Chip: A blue chip company is with a national reputation for quality, reliability, and ability to generate profits. For instance, Commonwealth Bank, Telstra, BHP Billiton, SEBI, Reliance, and more.
- IPO: An Initial Public Operating (IPO) is a very first stock sale used by a company to the public.
- Income shares: Income shares is a class of capital stock offered by a company that pays a dividend to shareholders.
- Growth-Share: Companies that re-invest profits for long-term growth:
- Rights Issues: A right issue is a dividend of the company right to buy additional securities at a discounted rate.
- Market Capitalisation: It is a term used to define the market value of a public traded company outstanding shares.
- Bull Market: A bull market is a sustained period when the stock market value is growing.
- Bear Market: A bear market is a market condition when the securities price is failing.
- Day Trading: A day trading is an act of buying and selling of securities within the same times. Indeed, is a stock trading strategies where shares are purchased for short-term capital gains.
- Sectors: A sector is a similar group of companies. For instance, the agriculture sector is comprised of pesticides and agro shares.
- Capital Growth: Capital growth is a situation when an asset increases in value over time.
- Settlement Date: A date when a person has to make payment for trade purchased.
How to Learn Stock Trading?
Stock trading is an excellent way to grow wealth. But how to invest in stocks? Follow these basics steps below to learn how to trade shares:
- Get Educated: The initial step toward becoming a competent share trader is education. IFMC Institute is the best institute for share training courses in India. The institute offers both free and premium courses. These courses are very affordable. Your training shall encompass NSE Technical Analysis as well as Fundamental Analysis. Additionally, you will require to build experience in share trading techniques, portfolio, and money management.
- Choose an Investing Style: There are several approaches to share trading. Comprehensive training in share trading will help you build your own investing style. Everyone like free online courses for share trading. IFMC Institute offers one-to-one free lessons.
- Fastrack your Learning: Here comes alternative to free courses including in-person classroom classes and online courses. For premium online trading, training can join IFMC stock market course for traders. Going for online premium courses will help to learn faster and can get hands-on higher-quality content. Thus, you can save time and money. Similarly, a classroom stock market course for traders offers a facility of a mentor. A mentor will guide you with practice on live trading sessions
- Choose a Share Trading Method: The two basic share trading methods are Electronic Traders and Exchange Floor Traders. Electronic trading is an online mode of trading. Whereas floor trading is an offline mode of trading.
- Avoid Trading Scams: Avoid to be a part of an investment scam. It’s easier than you think for scammers to take your hard-earn money. In fact, investment scams come in a different form, besides, the internet has made it easier. Thus, formal education to analyze investment scams can help you avoid uncertainties.
How to Make Profits from Share Trading?
As discussed, share trading is a way to create wealth. Here are three way to make money through share trading:
- Capital growth: Capital growth is a common way to make money from share trading. This is simply when you sell shares from more than you paid.
- Dividends: Another way to earn profits is through Dividends. This is when the company directors choose to pay company profits to shareholders. Although, Dividend payments are the basis of the number of shares you own. This type of shares is referred to as income shares. Moreover, not all companies pay divides, thereby, the directors can reinvest profits rather than paying a dividend. These types of shares are called growth shares.
- Tax benefits: A share can be stamped officially. You can also use franking credits in order to reduce the tax on other income.
What are the Benefits of Share Trading?
- Share trading allows investors to make money in both short-term and long-term. Additionally, it offers a provision to save tax.
- Share is a liquid investment, thus, an easy way to get your money in two days after you make a trade.
- Shares are a proven way to invest for long-term capital growth.
- Receive a capital gain tax discount after holding on to the shares for more than 12 months.
- As a shareholder, get the right to vote in company decision and attend annual general meetings.
What Else You Need to Learn?
If you’re planning to manage your own investment and make an independent trading decision, you need to learn the following concepts:
- How to set stock prices?
- Ways to understand stock quotes?
- How to determine a stock value?
- How to protect stock profits?
- Things to avoid investment scams?
Share Trading Course for Beginners
Share trading course for beginners gives you the flexibility to learn share trading. It is a must do a program for traders. Become a stock trading expert with IFMC Institute. IFMC is an award-winning institute for Stock market education. During the course, You get the knowledge of Intraday Trade and Options Trade. Students looking for an NSE, NISM, NCFM certification can also apply. After completing this course students can pursue a career in stock market India.