Trading in the share market can seem intimidating to beginners, but with the right knowledge and strategy, anyone can start trading with confidence. In this blog, we will break down the basics of trading in the stock market and help you get started on your investing journey.
Table of Contents
What is Trading in the Share Market?
Trading in the share market involves buying and selling of stocks, options or futures with the aim of making a profit. Unlike long-term investing, where investors hold stocks for years, trading focuses on short-term price movements. Traders analyse market trends, company performance, and economic factors to make informed decisions.
Types of Trading
Intraday Trading – Buying and selling stocks on the same day to take advantage of short-term price fluctuations.
Example: A trader buys 100 shares of KLM Ltd. at ₹500 in the morning and sells them at ₹520 by the afternoon, making a profit of ₹2,000.
Pro Tip: Avoid jumping into F&O purely for excitement. Leverage can amplify both profits and losses.
Swing Trading – In Swing trading buy a stocks and holding stocks for a few days or weeks to capture short-term market trends.
Example: A trader notices an upward trend in ABC Ltd. and buys shares at ₹200. After a week, when the price reaches ₹230, they sell, making a profit.
Positional Trading – Holding stocks for weeks or months based on strong market analysis.
Example: A trader buys shares of DEF Ltd. at ₹1,000 per share based on fundamental analysis and holds them for three months until the price reaches ₹1,300 before selling.
Scalping – Making multiple trades within a day to profit from small price movements.
Example: A trader buys and sells shares of NML Ltd. multiple times within an hour or day earning small profits of ₹10-₹15 per share that accumulate over the day.
Steps to Start Trading
1. Learn the Basics – Understand stock market terminology, trading strategies, and financial news. Before entering into the trade, you should do fundamental and technical analysis of selected stock or Index.
2. Open a Demat and Trading Account – To enter into the share market as a trader or an investor, you must open a demat or a brokerage account. If you don’t have a demat account, you cannot trade in the market. A demat account works as a bank account.
3. Research and Select Stocks – While doing investing or trading in the share market analyse companies performance, market trends, and financial reports before investing or trading.
4. Develop a Trading Strategy
- A successful trader operates on a defined system, not on gut feeling.
- Your strategy should include:
- Entry rules: Based on indicators or chart patterns (e.g., breakout, retracement).
- Exit rules: Set profit targets and stop-loss levels.
- Position sizing: Decide how much capital to risk per trade (ideally <2%).
Example of a simple swing strategy:
Buy when price crosses the 20-day moving average and RSI > 55.
Exit when price falls below 20-day MA or RSI drops below 45.
Consistency beats complexity. Stick to one tested strategy and refine it with experience.
5. Use Stop-Loss Orders – Limit potential losses by setting stop-loss orders to automatically sell stocks at a predefined price. As a beginner you should know how to prevent a big loss.
Remember: In trading, capital protection is the first priority; profit is the second.
6. Monitor and Adapt – Stay updated with market news and adjust your strategy accordingly.
Continuous Learning and Back testing
Every trader evolves. Keep learning from both your wins and mistakes.
- Back test your strategy using historical data.
- Review your trades weekly — find patterns in your behavior.
- Follow market news, quarterly results, and macroeconomic events.
Stay humble. The market rewards discipline, not ego.
Risks and Rewards
Doing trading in the share market can be profitable, but it comes with calculated risks. Stock prices fluctuate due to market sentiment, economic conditions, and company performance. To minimize risks:
- Never invest more than you can afford to lose. i.e. Doesn’t affect your normal life.
- Avoid emotional trading decisions. Be neutral while trading.
- Continuously educate yourself about market trends and strategies.
Final Thoughts
Trading in the share market can be a powerful wealth-building skill — but only if approached with education and patience.
Trading in the share market requires patience, research, and discipline. While profits can be rewarding, it is essential to understand the risks and trade responsibly. If you’re a beginner, start with small investments, practice with virtual trading, and gradually build your confidence in the market.
Your trading journey is not a race; it’s a skill-building marathon.
So stay focused, stay informed, and keep improving with each trade.
The content on this platform is for informational and educational purposes only and should not be considered financial, investment, or legal advice. While we strive to provide accurate and up-to-date information, we do not guarantee the completeness, reliability, or suitability of the information provided
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