Stock Market Basics for Beginners (Like me)


Basics

  1. Before start trading with real trading account – start with “Paper Trading”. Even many broker’s applications allows paper trading.
  2. Learn what is “Fundamentals Analysis” and “Technical Analysis” of stock market.
  3. You can use sites like www.moneycontrol.com or www.finance.yahoo.com to monitor/watch stocks. Certain “Paid” sites also provides updates by Mobile SMS/Text (Alert when stock is above certain price)
  4. Metastock:
    1. Use Metastock (or similar) to monitor stock, patters
    2. You can
  5. Two types of trading
    1. Intraday Trading
    2. EOD Trading (I like this)
  6. Investment Areas
    1. Stocks
    2. Stock IPOs
    3. Stock Options
    4. Mutual Funds / ULIPs
    5. Currency a.k.a Forex
    6. Gold
    7. Bonds
    8. Fixed Deposits

    I typically use Stocks, Mutual Fund, Fixed Deposits

     

  7. Trading Pattern / Method I use
    1. I use fundamentals to invest – such as Yearly Results, Quarterly Results, Price Book Ratio, EPS etc
    2. I follow Stock Advice & Research Report and verify it’s fundamentals and invest.
    3. Still not successful in trading using Techinicals such as Candle pattern, MACD patterns, etc.

Lessons Learned:

  1. As beginner, don’t jump into trading right away. Gain experience only by Paper Trading, at least for 1year.
  2. Once you know you are ready (after paper trading), invest small and improve your experience with real money – your target is 15% (which is better than Fixed Deposits)
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