The stock market on the surface sounds very simple right – “Buy Low, Sell High”; isn’t it?
But it’s easier said than done – identifying what to buy, when to buy (low) and when to sell (high) requires a sound understanding of the markets and a lot of practice. So, where do you start?
Image credit – www.LendingMemo.com
1. Know your trading personality first!
Its very important to understand your trading personality which basically boils down to one thing – how much risk you can tolerate? No matter if you’re new to the market or an expert – your risk-taking capabilities will define what kind of investor you are!
2.Start with Investing in Yourself – Read, Practice, Repeat!
My chemistry professor in high school used to say “little knowledge is dangerous knowledge” especially in labs – you can blow up something by mixing the wrong chemicals😊. And in the stock market, you can lose your hard-earned money.
Before you pick up your reading glasses, let’s take a quick look at the 2 most important investing strategies used by the experts (Warren Buffet, Rakesh JhunJunwala et al) :
- Fundamental Investing – Traditionally, investors just relied on fundamental analysis, which focuses on the economies of the company like its management structure, competitors, industry position, growth potential, sales, and profit data.
This technique requires you to have a good understanding of accounting and finance and will take time and a lot of effort to master if you’re not a finance graduate
- Technical Analysis – has become more popular in recent times, especially with the advent of technology & availability of data (crazy fact: we produce 2.5 quintillion bytes of data every day!). It assumes that market sentiments and any publicly available information is already factored in the pricing of stock and FOCUSES on statistical analysis of price movements (data).
Bottom line is “ you don’t need to have a master’s in finance to be a “Master Investor/Trader ”. If you’re decent with math & diligent with right training & practice you can make a living out of it.
3. Read, Read, Read
Regardless of what investing strategies you choose, don’t shy, pick up your phone and download some e-books on Amazon. There are plenty of books you can read, my personal favorite is “The Intelligent Investor” by the godfather of value investing “Benjamin Graham” , Technical Analysis for Dummies by Barbara Rockefeller & Trade Like a Stock Market Wizard: How to Achieve Super Performance in Stocks in Any Market by Mark Minervini.
4.Take Online Courses :
If you don’t enjoy reading, then you can take online/offline courses, they’re plenty of them out there. At TradeGyani, we are launching a learning app for new investors that will allow you to:
- Learn from the finest and most experienced market experts in India.
- Get access to live and recorded training session on technical and fundamental analysis right on your phone or tablet!
- Get 1-year handholding on your investment journey by our experts!
5.Get your feet wet before investing your money –
As it goes with everything, practice makes a man perfect. TradeGyani has a FREE virtual trading engine, which allows you to test the waters without risking your hard-earned money. You can buy and sell stock using virtual money & real-time market data.
Bottom Line is “Not Investing is because of the fear of Not Knowing”
The stock market is not gambling – it’s not rigged. It’s not only for people with deep pockets or bankers! It’s for everyone who is willing to invest in themselves!
I hope you find all the TradeGyani resources helpful, please share your comments below if you have any suggestions and feedback!
Happy Investing! Hope to see you on the other side.