How To Make Money In Stock Market

How To Make Money In Stock Market

Chapters

1. Introduction.

2. What you will Need to Get Started.

3. Different type of way for investing in stock market.

4. What is day trading and how its work ?

5. What is short term Investment and how its work ?

6. What is long term Investment and how its work ?

7. How to select the right share for investing in stock market.



Introduction
Many people dream of making money in stock market but very less people become succesfull in fullfilling there dream of making money in stock market. The biggest reson for the people having unsuccesfull in stock market is that they start investments in stock market without firstly taking proper knowledge of stock market. Always remember making money by investing in stock market is not the work of child, It’s a tough job. Its an “Art” of making money in stock market and takes years of experience to get Expert in stock market.

If you are reading this , then you have at least some desire to actually make money in the stock market, whether your current strategy has been “Buy and Hold,” “Buy Low, Sell High” (!), or “Day Trading.” Notice
I placed day trading in quotes. That is because I am now of an opinion that nowhere has a more laughable, emotionalist mentality been applied to the system of stock picking than is practiced by the majority of today’s day
traders. I know. I was one of them.

If you have doubts about whether yet another stock trading strategy can benefit you, then congratulations. You have all the rationality and sense you need to actually stop searching for one and begin using one that works.
If that describes you, read on. You have nothing to lose; this article is not long, it will not appropriate very much of your time. And along the way, be prepared for a discovery that will surprise you, the skeptic, most of all.

Today I am going to tell you about following :

1. Different types of way for investing in stock market.
2. How to start investing in stock market.
3. How to select the right share for investing in stock market.

What you will Need to Get Started

To begin, you will need a computer. It is likely you have already achieved this step. If not, I recommend that you purchase a computer with as fast a chip and as much memory as you can afford. While the share Trading system is not memory intensive, the faster your computer is the less likely you are to encounter problems trading online.
Next, you will need an internet connection. I cannot stress strongly enough how important it is for you to access the web using a DSL (Digital Subscriber Line) connection or faster. DSL has come down in price, is available in more areas than ever, and is practically unbeatable for speed and reliability online.
Speed is critical when placing trades online. If you insist on using a standard modem connection, at least try to get the fastest one made and sign up for the most reliable dial-up internet service you can find. Again, my recommendation is to get a DSL connection. You will be glad you did.
Next, you will need an online trading account. In my experience with online brokers, I have ried all of these: Sharekhan, Indiabulls, ICICI Direct, Religare, Hdfc Security, Kodak Security. Of them, I use all and recommend Sharekhan. You can choose according to your closest facility available.

Different type of way for investing in stock market.

There are three different ways of Investing in stock market as following:

1. Day trading or Intraday : Buying and selling share in a single day by making small amount of profit

2. Short term investment : Buying and selling share in more then single day and less then a single month by making reasonable amount of profit

3. Long term investment : Buying and selling share in more then month by making Big amount of profit

What is Intraday or day trading and how its work ?

Intra means internal of something. Thus intraday means trading in a day. Day trading or intraday is way of making money from stock market in a single day. Buying and selling share in a single day by making small profit. You buy a share in the starting of day in expectation that price of share will slightly rise and at the end of market hour you sell the share by making the small amount of profit on that share. At that night you have no share remain in your account and you start your next day from scrach.

For Example :
You buy the 1000 share of the company name xyz in the staring of day in Rs. 112, so which means we have to multiply “number of share*Value of share = Price of volume share”, which is 1000*112 = Rs. 1,12,000 and at the end of day the share value rise for Rs. 1 which means to Rs. 113, So you make the profit of Rs. 1 on single share you bought , so if you buy 1000 share, which mean you have to multiply “number of share * profit on single share = Net Profit” which is 1000*1= 1000, So your net profit is equal to Rs. 1000. And your brokerage charge and taxes is equal to Rs. 500. So you minus brokerage charges and taxes from net profit which is Rs. 1000 – 500 = Rs. 500, so your gross profit is Rs. 500.
So in this way, if you make Rs. 500 Profit in every single day of 20 days of one month by removing market holidays and other free days means you make profit in one month by multiply “Profit single day*Numbers of days= profit you make in one month” which is Rs. 500*20 = 10,000, So this means You can make profit of minimum Rs. 10,000 in one month. And as you increase the numbers of share you buy on single session, your profit will also increase, that means the more number of share makes more number of profit.

What is short term investment and how its work ?
Short term investment is way of making money from stock market in more then a single day and less then single month. Buying and selling share in more then a single day by making reasonable amount of profit on it. You buy a share in the Expectation that price of share will rise and after the rising of share value to a reasonable amount in more then a days to week you sell the share with making the reasonable amount of profit on that share.

For Example :
You buy the 1000 share of the company name xyz in Rs. 110 so which means we have to multiply “number of share*Value of share = Price of volume share”, which is 1000*110 = Rs. 1,10,000 and at the end of two day to month, the share value rise for Rs. 15 which means to Rs. 125, So you make the profit of Rs. 15 on single share you bought , so if you buy 1000 share, which mean you have to multiply “number of share * profit on single share = Net Profit” which is 1000*15= 15000, So your net profit is equal to Rs. 15,000. And your brokerage charge and taxes is equal to Rs. 1000. So you minus brokerage charges and taxes from net profit which is Rs. 15,000 – 1000 = Rs. 14,000, so your gross profit is Rs. 14,000.
So in this way, if you make Rs. 14,000 Profit in every single day of 10 days of one month by removing market holidays and other free days means you make profit in one month by multiply “Profit single day*Numbers of days = profit you make in one month” which is Rs. 1,40,00*10 = Rs. 1,40,000, So this means You can make profit of minimum Rs. 1,40,000 in one month, And as you increase the numbers of share you buy on single session , your profit will also increase, that means the more number of share makes more number of profit.

What is Long Term investment and how its work ?
Long term investment is way of making money from stock market in more then a month to years. Buying and selling share in more then a single month to years by making big amount of profit on it. In Long term investment you does not have any problem in a small fluctuation in share price because you are looking for long term increase in share price. You buy a share in the Expectation that price of share will rise and after the rising of share value to a big amount in more then a month to years, you sell the share with making the big amount of profit on that share.
For Example :
You buy the 1000 share of the company name xyz in Rs. 200 so which means we have to multiply “number of share*Value of share = Price of volume share”, which is 1000*200 = Rs. 2,00,000 and at the end of month to year, the share value rise for Rs. 200 which means to Rs. 400, So you make the profit of Rs. 200 on single share you bought , so if you buy 1000 share, which mean you have to multiply “number of share * profit on single share = Net Profit” which is 1000*200= Rs. 2,00,000, So your net profit is equal to Rs. 2,00,000. And your brokerage charge and taxes is equal to Rs. 2000. So you minus brokerage charges and taxes from net profit which is Rs. 20,0000 – 2000 = 1,98,000, so your gross profit is Rs. 1,98,000.
So in this way, if you make Rs. 1,98,000 Profit in every single month to years. And as you increase the numbers of share you buy on single session , your profit will also increase, that means the more number of share makes more number of profit.


How to select the right share for investing in stock market ?

1. First, check the upgrade/downgrade listing to be sure the stock was not simultaneously downgraded. Then, copy down the ticker symbols of the upgrades onto a paper list in order to facilitate the elimination of the disqualified stocks one at a time.

2. Next, one at time, copy and paste each of the symbols from the on-screen upgrade list into an online financial website such as Yahoo! Finance. Be sure to select a 1-Year Chart view .

3. Next, visually examine the stock chart for acceptable (rising) performance over the year, and make sure the stock is at least one year old, trades at 15 or more, and has earnings. Also, check its recent News headlines to be sure it wasn’t downgraded any time in the past few business days.

4. Then disqualify the stocks which do not meet the previous fundamental examination test by crossing them from your list.

5. This test and the one that follows are the most important: for the remaining stocks on the list, check Earnings Growth Estimates for the current quarter. This can be found in he Research link of the company in Yahoo! Finance, along with the other financial Information. Make sure that the estimated Percentage figure under the Company's column is : a) not zero or a negative number b) greater than the figure presented for its Industry (not to be confused with its Sector).

6. Check EPS Trends & Revisions. Make sure that the EPS Trend for This Quarter from 90 days, 60 days, 30 days, 7 days, and Current display flat or rising Earnings Per Share going forward, as in the example on the left above. (The amounts must be the same or become larger as they become more recent, rising up the chart). The example on the left above displays an acceptable EPS Trends & Revisions reading on a stock. The example on the right is unacceptable and the stock should be disqualified.

7. Next, check the Target Consensus and Recommending Brokers of the remaining companies. The total of Buy and Buy/Hold simply must be greater than the total of all the other recommendations. Use the reater of either the Mean Target or Median Target. The target price must be greater than the current price plus 1%. If no targets are shown, disqualify the stock. Write down the info beside each entry in your list, and then reduce your choices to one last stock.

8. Calculate the number of shares to purchase by dividing your cash position by the share price at precisely 10:00 AM, and place your buy order for the stock. Don’t anticipate: wait until exactly 10:00 AM before pressing the button to place the order. Be sure to round off to the nearest 100 shares (a round lot). For example, you don’t place an order to buy 243 shares. You buy 200.

9. When you receive a fill report by the broker, usually in only a few minutes, immediately place your limit sell order, GTC, for 1% greater than your buy price. Be sure to enable the sell trade for the Extended Hours session. In this example, the sell order would be for 40.30. Be careful to get the number of shares right.

10. Check the stock again at the day’s end to see if you completed the sale. If not, just hold the stock until it does sell. Above all, don’t worry about it, particularly if it has fallen and even if you get stuck with it for a long time. Upgrades are very forgiving, and it is the long-term average interim time that matters, not any one trade. NEVER TAKE A LOSS.