Basics of Trading

Hi Friends,

People now days are getting interested in Trading. Even people are making career in stock market or in Trading. As it might be the faster way of becoming rich. Guys I am going to tell you very basic things of about Trading. If you wish to invest in Trading or in stocks you can start with these things. But before starting gain some knowledge regarding Trading that where and when we should invest. So lets start guys with very basic things for beginners.

I often listen people saying that we should invest in real estate. But I suggest you stock market. As to invest in real estate you need you always need a big amount. Where as you can start Trading with a minimum amount. Before starting investment in stocks you need to ask three questions to yourself. Those are:-
why? What? When?

Why? Of course for money. Every person likes more and more money.

What?  How much amount to invest and in which scheme to invest?
So you can start with a very little amount i.e 1000/- and there are many schemes,  yes i'll say schemes in which you can start Trading.
There is equity market, Futures, Index Futures, Commodities, options and Forex. So these are the schemes where you can invest. I'll not tell you in detail that how to invest in these, how indexes under schemes are maintained etc. But i'll give you an overview. Remember terms which I use because these would be beneficial in future. I'll tell in detail in my up coming blogs. Because this is for beginners.

In equity if you invest 1 Rs. then you can buy 1 Rs. Stock.
In futures if you invest 1 Rs. then you can buy 5 Rs. Stocks means you get leverage of 4 more Rs. (leverage=investing with borrowed money as a way to amplify potential gains).
In index futures if you invest 1 Rs. then you can get leverage of 10 Rs.
In commodities if you invest 1 Rs. then you get leverage of Rs. 20 means you can buy 20 Rs. Stocks.
In options you get 50 Rs. Leverage on investing 1 Rs.
And in Forex you get 400 Rs. Leverage on investing 1 Rs.

I sounds good to buy 400 Rs. Products on investing 1 Rs. But I suggest you to never start with Forex if you are a naive trader. You are new to Trading. As in Forex there is a high risk of loss, you are not an expert. You will 100% lose.
So always start with equities for at least 4 to 6 years. If you invest for this duration you will definitely gain profit. If you got some knowledge then come to futures then come to index future then on commodities and so on.

When? When to invest? Is there any specific time? Yes. Try to invest in stocks just before when new budget is going to implement.

So start Trading or investing in stock market with a positive thinking. Sone people think it is gambling. This is not a gambling. If you have some knowledge then you can make it your profession as well.

Guys please share your knowledge on Trading in comments. As I am also a learner. I wish to learn from you also. So please share your thoughts, knowledge and views.

Thanks
Happy Trading