Investing in the Indian Share Market can be intimidating, especially if you are a beginner. To avoid getting overwhelmed, you must equip yourself with adequate knowledge. That way, you can navigate the market confidently and make informed decisions.
- What is the Share Market?
The Indian Share Market is a platform where publicly listed companies buy and sell shares. It consists of two primary exchanges –
- National Stock Exchange (NSE)
- Bombay Stock Exchange (BSE)
These platforms allow individuals and institutional investors to participate in companies’ growth and generate returns by trading in stocks, derivatives, and other financial instruments.
- How does the Indian Share Market work?
The Share Market today operates on the principles of supply and demand. Buyers and sellers interact through intermediaries called stockbrokers, who execute trades on behalf of investors. The market functions on a bid-ask system, where buyers place bids at a specific price, and sellers set asking prices. When a bid and ask match, a trade occurs.
- What factors influence the Share Market?
Various factors influence the market. These include company performance, economic indicators, global events, and your investing sentiment. Understanding market dynamics, such as indices, trading hours, and trading segments, is equally crucial for active participation. For instance, you wish to invest in Yes Bank shares. Now, you should consider the abovementioned aspects and then look into the Yes Bank share price. Once convinced, you can go ahead with the investment.
- How to invest in the Share Market?
To start investing in the Indian Share Market, you need a Demat Account, a Trading Account, and a linked bank account. Start by selecting a reliable stockbroker or brokerage firm that offers online trading services. Open both accounts with the chosen broker by submitting the required documents and completing the account opening process.
Once the accounts are activated, you transfer funds into your Trading Account and begin buying and selling shares through the broker’s trading platform or mobile app. For example, upon getting access to the account, you can buy Infosys shares after reviewing the Infosys share price.
- What are the different types of orders in the Share Market?
In the Share Market, you can place various orders to execute trades. Some commonly used order types include market orders, limit orders, stop-loss orders, and stop-loss limit orders. Market orders are executed immediately at the prevailing market price. Limit orders let you set a particular price at which you want to buy or sell shares.
Stop-loss and stop-loss limit orders are designed to limit potential losses by triggering a sale order when the stock price reaches a predetermined level.
Key points to note while investing
- Diversification helps you spread investments across different sectors and asset classes. It enables you to reduce your risk exposure.
- Conduct detailed research before making any investment decisions and set realistic expectations.
- Focus on company fundamentals, industry trends, financial indicators, and other relevant aspects.
