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For beginners, the stock market can seem incredibly lucrative, risky and confusing. Following a few stock market basics can protect you from common pitfalls and keep you excited about learning to invest.
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Stock Market Basics For Beginners
Agenda • Share market basics • Terminology • How to Trade • Practice on virtual terminal • Doubt clearing
Share market basics Share market : Buying and selling of shares is done
Major Stock exchanges In India NSE(National Stock Exchange) It is the largest stock exchange in India in terms of daily turnover and number of trades, for both equities and derivative trading NSE.(9:00 to 3:30)NIFTY BSE( Bombay Stock Exchange) It is the oldest stock exchange in Asia and has the largest number of listed stocks. It is located at Dalal Street, Mumbai.(9:00 to 3:30)SENSEX MCX(Multi Commodity Exchange of India Ltd.) Silver ,Gold, Copper & Natural Gas and Crude Oil (10:00 to 11:30) MCX
Why to invest in stock market? • You want to maximise your returns. • You want to beat inflation.
Why to invest in stock market? • Keep pace with inflation. • Reach your financial goals with the right mix of investments.
Why to invest in stock market? • Reduce investing risk with a solid asset allocation strategy. • Reduce risk with a well-planned strategy for buying and selling stocks.
Why to invest in stock market? • Use dollar-cost averaging to stay in the market when stock valuations are high. • High-frequency traders aren't hurting returns for regular investors.
Brokers A broker is a party that mediates between a buyer and a seller. A stock broker or stockbroker is a regulated professional broker who buys and sells shares and other securities through agency firms on behalf of investors.
Demat account The term Demat, in India, refers to a dematerialized account. In a Demat account shares and securities are held in electronic form instead of taking actual possession of certificates.
Index • Mirror of the market • How the top companies are performing • Calculated by assigning weights to specific securities. Examples: Nifty 50 , Sensex , Bank Nifty, etc
Delivery Vs Day Trading • When you purchase stocks with the purpose to hold them for more than a day is termed as Delivery trading. • When you buy or sell stocks for intraday with an obligation to square off your position in the market on the same day is known as Day trading.
Price • Last trading price • Open price • Close price • Day high • Day low • 52 week high/low
Order & Trade • Order: Bids you are putting into terminal. • Trade: Bids which are executed.
Important Terms • Market Price • Limit Price • Margin • Short Selling • Short Covering • Stop Loss
Basis of Trading • Fundamental basis: Analysing company accounts, business profitability by using ratios like EPS, PE, Book value to PE etc. • Technical basis: Analyzing the historical price movements on the charts for identifying patterns in share prices.
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5 Ways Of Growing Money • Business • Real Estate • Give Loan To Some One • Invest In Bank, Post Office • Invest In Securities ( Share Market)
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