Basic of Stock Market and Technical Analysis

Stock/Share Market Trading

Share Market Trading is a business of buying and selling securities as per market conditions with maintaining the ratio of small losses and big profits. Proper Planning, discipline and consistency is a real key of success in stock market trading whether you are doing intraday trading, swing trading or positional trading.

 

Mechanism of Stock market

First step towards earning money in the stock market is to understand the stock market process/procedure. You have to place an order to buy and sell the shares. Once you place the order with a broker or can place it by using an online trading system, the message goes to the exchanges as per your script selection. Then the order will be in the queue of exchanges’s other orders and will be executed if the order is triggered to the price placed by you. Once getting confirmation of the shares purchased, it will be sent to your demat account. The demat account is a place where your shares are stored safely in electronic format. 

 

Is the demat account must ?

As per the SEBI (the Securities and Exchange Board of India) rules and regulations, it is compulsory to have demat account to trade shares in Indian stock market. So a demat account is must for trading / investing in the stock market.

 

How to open a Demat and trading account ?

You can directly open a demat account with a Depository Participant. Some of the banks are also DP participants, you can open a demat account with them. It is better to open a demat and trading account with a broker so that your trading transactions get smooth while doing online trading. You can also contact us to open a demat and trading account with the following brokers. You can get our premium intraday trading membership if you open demat and trading account with us by using below registration links :

 

>>ZERODHA REGISTRATION WITH US :-

https://zerodha.com/open-account?c=ZMPQOI

Referral Id :- ZMPQOI

 

>>UPSTOX REGISTRATION WITH US (Zero Charges for Account opening) 

http://upstox.com/open-account/?f=MERW

UCC Code :- 232525

 

>>5PAISA  REGISTRATION WITH US (Zero Charges for Account opening) 

https://www.5paisa.com/landing/partners-elite?rcode=NTI3MTQ1NjI

Referral Id :- SAME027

 

>>ANGEL BROKING  REGISTRATION WITH US (Zero Charges for Account opening) 

https://online.angelbroking.com/Diykyc/SubbrokerLead?SbTag=QVNETkQ=

Referral Id :- ASDND

 

There are very nominal charges to open demat and trading accounts. Most of the discount brokers offer free of cost account opening. Brokers charge an annual fee for demat account maintenance charges. It may differ to each broker. You need the following documents to open a demat and trading account online.

  1. Your PAN card 
  2. Your Aadhaar (you can open your account via the offline route if you don’t want to use your Aadhaar details)
  3. To complete the e-Sign process, you will have to authenticate it with an OTP. So, make sure you have the mobile number linked to your Aadhaar handy. If not, you will not be able to complete the process. If the number linked to your Aadhaar is inactive, or if you don’t have any number linked, then you can visit your nearest Aadhaar Seva Kendra to get it updated.
  4. Cancelled cheque/Bank statement to link your bank account – If your cheque is not personalized then the bank statement you upload should have both the IFSC and MICR code printed on it. If not then your application will be rejected. 
  5. A photo or scanned copy of your signature proof will be required to be uploaded. 
  6. Income proof – It is mandatory to submit income proof if you wish to trade in Futures and options – Equity, Commodity, and Currency. You can submit any one of the below documents:
  1. Form-16
  2. Income Tax Return Acknowledgment
  3. 6-month Bank statement
  4. Latest salary slip
  5. Demat holding statement, or
  6. Networth certificate from a CA

 

Stock Exchanges in India

There are 3 main exchanges in India namely NSE (National Stock Exchange), BSE (Bombay Stock Exchange), MCX (Multi Commodity Exchange). You can do Buying and selling of shares in NSE and BSE. In MCX, you can do futures trading of more than 40 commodities like Silver, Gold, Platinum, and Copper, Energy – Crude oil, Natural gas, Gasoline, and Heating oil.

 

Index of Share Market

A stock index or stock market index is a calculated price based on a particular group of shares in the stock market. Index works as an indicator to show the directions of the entire market. 

There are mainly 3 indices which most of the traders used to trade namely Sensex, Nifty and Banknifty. Sensex consists of a group of 30 shares of BSE and Nifty consist of a group of 50 shares of NSE. Bank Nifty consists of the 12 most liquid and large capitalised stocks from the banking sector of NSE.

 

Stock Market Trader and Investor

Traders do buying and selling of shares, indices, commodities based on technical analysis study or with the market flow/trend for a very short time period like from a single day to a couple of days. Investors buy shares based on fundamental studies or market scenarios for a long time frame like a few months or years.

 
We are going to talk about intraday trading in the stock market. There are few important things understood to become a successful trader. Traders mostly do intraday trade based on technical analysis so it is better to trade on what we see in the price chart of the stock instead of what we think. Patience is the key to success in the stock market. A successful trader waits for a good trading opportunity and then pulls the trigger.

Features of Profitable Intraday Traders
Does not trade just for excitement
Does the daily homework necessary to improve their trading skills
Understands the importance of risk management
Train continuously
Identify a signal or market opportunity
Feel good whether he wins or losses
Accept to take a loss
Makes Trading goals
Put stop loss and trailing stop loss


Technical Analysis for Freshers

This video is all about Price action analysis. Price action of stocks or Index or commodity allows a trader to read the market trend and make trading decisions based on the past and actual price fluctuations. It starts from the basics of technical analysis i.e. types of charts, chart reading, price action methodology. It is better to follow Price action first for making trading plans rather than relying on technical indicators. Technical indicators are made by price action parameters.  Most of the traders analyze price action for recognizing trading patterns, entry and exit levels, stop-loss. Price action with the help of supportive indicators may give proper entry and exit levels. We get historical price action data with current movement-um to make decisions about future probabilities of stock price move. It ignores the fundamental factors and only matters about recent and past price movement.