If you want to learn the stock market step by step, then you have come to the right place. In fact, you have come to the right platform, because in this article, you will get to learn the stock market step by step. What is important is that you will learn everything in a sequence. If you are a beginner then it is a must read article.
I meet a lot of people who want to earn money from the stock market. And you also want to earn, that’s why you have come to this platform seeking some guides to help you understand stock market. So that you can easily earn money from the stock market.
I heard that a lot of people earn a lot of money from the market, but how do they earn? But you have to understand one fact that most of the people lose money in the stock market. I do not take the example of anyone else.
Lesson from my friend who made mistake on investing in stock market
First of all, I take the example of my friend. My friend used to trade in the commodity market at one time. He used to trade in gold. And I am telling you genuinely that the charts that you are seeing in the screenshot, maybe many of you are familiar with this chart.
My friend had no idea what candlesticks were. In fact, he did not even know what is the significance of a red candle and what is the significance of a green candle. I remember that he had a phone. There was an E-series of Nokia at that time.
And I am talking about this at least 15 years ago. It must have been around 15 years. So the Nokia phone had a QWERTY keyboard and it became very famous because it had a full QWERTY keyboard. And there was a screen on top.
I still remember that phone. He bought it. And at that time, there was a phone of 10,000. So he used to install a software in it.
In that software, only the price was visible. Price means like you are seeing this plus or minus. Some such figures were visible. This chart and this candlestick, nothing was visible.
So he used to see the price and used to talk to his broker over the phone. That brother would say, ‘buy it, sell it’. Then he did trading accordingly. So he used to trade in a lot of leverage. And what is leverage? Trading in more quantity than your capacity.
So there can be a big advantage and a big loss in it. In one night, the commodity market is also open at night. So in one night, he had a loss of 5 lakhs. Which was a very big amount for him at that time.
I would like to tell you that because of that loss, my friend had to take a loan. And the repayment of his loan, He did it himself for many years. So people start from zero. I too started my journey from minus.
I said, my friend struggled a lot. Because he had no idea. So I personally feel that this is not just my friend’s story. I am sure that there must be someone around you.
Whose hands must have been burnt. Who must have caused a loss in trading. Someone will be found. And if you ask those people, then it becomes psychology.
Lose little and profit more from the market
What does it mean? You have to loss but that much teach you and make you master over trading to profit more. If we lost money in the market, then we will earn from the market. Meaning, people think that someone lost 5 lakhs. My friend lost 5 lakhs. So someone must have made a profit of 5 lakhs.
We can also make a profit of 5 lakhs from the market. You can do it but with proper knowledge and skill. If you try to do anything without learning you are in loosing your money. You must know the stock market is like a two-edged sword that can kill both traders.
Means your own loss can happen first. Its probability is very high. So that’s why it is very important to learn it step by step.
How do I do Investing?
You want to know how do I do investing? How will you make a good profit in investing in the long term? What are my own favorite investing strategies? The people who are trading in the market and making money. What are their strategies? Those who are trading with big capital. And it is important that they are constantly making money.
What do they do? So all this is going to be revealed. Maybe you will also get some good strategies. If you get stuck in any strategy. Maybe you do Intraday today.
You trade in options. You take positional trades. And you get stuck somewhere. You start losing.
So how can that loss trade be brought in profit? We are going to discuss all this. So we will go step by step. But I am very sure that after reading this article. I can say this before that you are going to thank me.
Because we will learn everything step by step in this blog post. Even if you give lakhs of rupees for this. Maybe it would have been less. I can tell you before.
But yes. You are watching on YouTube or reading on the blog. One benefit for us is that. It is free! I don’t say that everything is free.
Money does not go out of your pocket. This is a very important thing. So it is free for me to say. But yes.
There are some benefits that I have told you before. But what is important is that. A person sitting in a shop. Who starts a job today.
Starts earning some money. He can invest it properly. He can build his capital in the long term. And if he wants to trade.
Then he will understand what to do and what not to do. So you must have understood by now. That this guide is going to be very beneficial for you. Now let’s start.
Understanding Stock Market
As I said. There are many people in the market. Who do not even know the S of the stock market. So let’s assume.
Maybe you do not even know today. You are new today. And you want to learn. So how will you start? We will come to this chart.
We will come to this candlestick. We will come to the patterns. This nifty, bank nifty. Fin nifty.
What can be done in stocks? How to trade? How to make money? We will talk about everything. And we are going to go deep too. What you will learn this time. We will go a little one level deep.
What is stock market?
We will go a little fast too. But you stay with me. So let’s start with the stock market. Now what is the stock market? Many people do not even know this.
So let me tell you. It is a market where there is a trade of stocks. Now what are these stocks? You must have heard. There is a stock of Reliance.
There is a stock of Tata Motors. There is a stock of ITC. What is this? To run any company, the most important thing is money. You need money. Where will this money come from? This money. One can come by borrowing. It may be your own money. What if the company has to grow but there is no money? Then it will come with a loan.
Second is that we sell the shares of our company. And in return for the shares, we take money from the market. So here in the stock market, the companies, they take money in return for their shares. When the first time any company comes and takes money from the market then it is called IPO.
In which the company tells, how much money am I giving my share? If any of you want. If any person wants then he can buy the stock..
You say share. You say stock. In the beginning. The concept is the same.
If you buy a share of a company. We say you have bought a stock of a company. It is one of the same thing. Don’t get confused.
What is IPO?
If a company asks for money. Then it is called IPO. IPO means ‘Initial Public Offering’. Now let’s start with IPO. You must have heard, many companies bring their IPO. Recently, a Tata Technologies IPO came in which people benefited a lot. Because in IPO the company says; for example of my share.
It is worth 1000. One share you will get in 1000 rupees. The stock is listed in IPO. The share is listed. It means ultimately there will be an exchange. On which people can buy and sell. An exchange is called. NSE or BSE. Bombay Stock Exchange, National Stock Exchange etc.
All IPOs are listed on NSE or BSE. After being listed, what is the price of it. If it is increased. If the share is increased in 1500. Then it is called. 50% listing gain. People invest money in IPOs.
But you must have heard Paytm IPO came in which if the share is worth 1000, and it is increased in 700. Then it is called 300 rupees discount, 30% discount. Discount means. Loss. Paytm IPO. Loss.
It is not that in the market everything is right. There are many people who invest money in IPOs. They get good listing gains. There are many IPOs in which the company wants to take money from the market. Like Paytm. But ultimately people do not benefit.
We have covered many things. If you are new. There is an exchange. What is the job of it. To get the buyer and seller. You want to buy a stock. For 1000 rupees. But the seller wants to sell it for 1000 rupees. So, how to get the buyer and seller. That is the job of the exchange. So on the exchange there is a concept. It is not necessary to understand.
What is ‘Bid and Ask’?
Now I will tell you. The buyer and seller. This is about ‘bid and ask’. The buyer always puts a bid. He put a bid for 1000 rupees to ask for 1000 rupees. There is a difference. Liquidity is good. Now what I am saying. Maybe you are going fast.
What does it mean. If someone wants to buy for 1000 rupees. and someone wants to sell in 1000 only. So buyer and seller will immediately do a transaction. So this is called good liquidity. Now let me show you how it looks. So what you should do, you should trade in such stocks. In fact, if you trade in options in future, then you should trade in such options where you get full liquidity.
Now what does bid mean? It means that the buyer in the market is ready to give maximum money to buy a share or to buy an option. So for example, it is 1000 rupees and the seller has asked that I will sell it in 1005. Now see the difference of 5 rupees here. What is it called? It is called spread.
This spread is big. The smaller the spread, the bigger it is. If the bid of 1000 is coming and the example is 1000.1 ask.
So what happened is that the spread has become very small. It has become a spread of 10 paise. So it is important to understand this spread. It doesn’t matter if you are new because what we are going to do in the future, these small things people ignore and don’t even talk about it.
But it is important. I will tell you the reason for this. So recently a man was trading in the options of stocks. Now if you are new, then listen to me.
You will understand. So what are these options? These are derivatives. We will talk about this. So one is the options of nifty, bank nifty.
These are very liquid. You get great liquidity in this. Means there is not much difference in your bid and ask. Spreads are very small.
But a man was working in the options of stocks. So there can be options of stocks like Reins, ITC, HDFC bank. So he was trading in such a stock in which his profit was coming. I will give you the name.
His profit was coming in Havels. So there is F&O trading in Havels stocks. He was trading in the options. So his profit was coming in the options.
Now he executed the market order. Now what is this market order? All these things that I am saying may be going over the head of a new person. But I am telling you genuinely that we are talking about very basic things. If you are old, then you will think what is this? But understand what I am telling you.
A man was trading in the options of Havels and he was in profit. Now he executed the market order and to book this profit, he secured off his position. So to secure off means to cut the position. He cut the position and his position decreased in loss.
How does this happen to you? We trade in nifty. Whatever profit is coming, we cut it there. The same profit comes. Example, if I am showing you a profit of 5,000, you will get a profit of 5,000.
But here in Havels, in the options, he was standing in profit and he secured off his position. He cut the position on the market order and he came in negative. His loss has come in reverse. The profit has gone.
You will say what is this? That is why I told you the concept of bid and ask here. That if he was running in profit, that option was an example, when he is showing you a rate, that option is of Rs. 100. But the man who is ready to buy it, you are going to sell that option.
So the one who is ready to buy, he is saying that I will give Rs. 92 for it. I will give less than Rs. 8.
So that loss of Rs. 8 was there because there was no liquidity there. So you should not trade in such stocks or such options where there is less liquidity. Example, if you trade in the commodity market, you tell me by commenting.
We are talking about the stock market, but if you are interested in the commodity market, then in this post, because we have not told you how to trade in crude oil, how to trade in natural oil, how to trade in gold, how to trade in silver. We have not told you this. So if you want to learn, then comment.
If you want, then comment. If there is no interest, then we will ignore it. So let’s continue from here. I was giving you an example.
For example, you trade in gold. So if you trade in the futures of gold, then the matter is over. There is no problem of liquidity there. But if you trade in the options of gold, there will be the same problem.
Liquidity is less. Spreads are very big. The thing I want to buy, you understand it like this. You have a property, you have an extra house. You want to sell it for 1 crore. But the buyer is saying that I will buy it for 90 lakhs.
So this difference of 10 lakhs will be called spread. So this is spread. Okay, understood so far. Now let’s move forward.
So what have we understood so far? We understood that the stocks that have liquidity or the stocks that have liquidity in the options, we will trade in it. This is important if we do. The second thing is that we have understood liquidity, spread, bid-ask. We have understood the exchange.
We have understood IPO. If you have understood the concept so far, then there is a question that you have to answer. This is a very simple question, but with this, you do a little research. Now we have talked about two exchanges, NSE and BSE.
National Stock Exchange and Bombay Stock Exchange. You have to comment and tell in the comment below that which one is old. Is BSE old or NSE old? And then you have to tell how many stocks are listed in BSE and how many stocks are listed on NSE. How many companies are listed, you have to comment and tell.
So what will happen, you will google a little, you will read a little. So this homework is done and your curiosity will also arise to know a little more. So now we are going to move forward from here.
Way to Earn in Stock Market
We will go a little fast, but it will be fun. Okay. When we are talking about the stock market, then we come to the topic of stocks.
Now if you go, you will see that there are 4000 companies. We don’t have money to buy stocks. We have limited money. We all have limited money. In fact, Ambani also has limited money. No one has unlimited money. So if we have limited money, then we can’t lose our money. And we can’t invest our money everywhere.
When you have to buy a house, then you go out to buy a house. We don’t buy a house like a potato or okra here. What I mean to say is that when you are buying a house, then you do all your research because you are investing a lot of money. But when people come to the stock market, they buy stocks at the behest of a friend.
These stocks are not your potato or okra. Money is being invested. Hard earned money is being invested. So here comes the concept of how people earn money from the stock market.
Methods to earn money from Stock Market
There are many ways to earn money. Let’s learn method number one.
That’s it. If you lose, then it happens in everything. What are the new things in stocks? What does stocks mean? If there is a share of a company in the market, for example, you bought the share for 100 rupees and it grows as much as it can. Let’s assume that after a few years, you sold it for 1000 rupees. So here the growth of your money is about 10 times.
You can find many of these stocks in the market. But do you know what the problem is? You will find many people in the market.
If you invested in Titan, it would be more than that.
Had you invested in Wipro, it would have been very profitable. If you had invested in Aishwarya Motor, it would have been so much more. You got so much return. I mean, let’s assume you invest.
So how much have you invested? I meet a lot of people who say we bought stocks. Our money had doubled. I would say, very good, double your money. But how much have you invested? If you spend Rs.
And you tell me with great joy that your money has doubled. Your money has become Rs. So what have you done? You didn’t do anything. Returns as a percentage of 100%.
But if you ever imagine stocks where your money could double in 1 month, 2 months, 3 months. Would you sell your home and put the money in a place like this? You will say, who does this? No one does this. I am not selling my house and investing the money. Now let me take you right back to reality from here.
It will be a lot of fun. So I was talking to my wife yesterday. So I have, as I am an active investor. So I buy real estate.
I am saving money. With savings, I buy real estate. So we are doing this and by the grace of God we have been working for many years. So we built the right buildings.
So yesterday I was talking to my wife. I got a call back from a real estate agent. He pointed to a property. So there’s a lot of quality, X amount of quality.
And it is good, it is open on all three sides. Everything is looking good. But I will not buy this time. So she says, what happened? Why won’t you buy? Every time you get a good property, you don’t leave it.
You buy it. When you buy a property, there is pressure. What is the pressure? What is the pressure? There is no money left in the account. So if you genuinely, I say this for myself.
I have no liquidity in the accounts. Because when I make a big investment, it is over. Then slowly, slowly, slowly, we earn again. Slowly, slowly, slowly, we save 100, 200, 500, 1000, 10,000 rupees from different sources.
In the same way, whatever we do, we earn money slowly. And when you make a big investment, you go into a liquidity crunch. So my wife said, if you have saved money this time, this time, why are you not buying that property? So I explained to her in terms of returns. I said, look, now we have a decent portfolio of real estate.
We have enough properties, we have land. Now let’s talk about what returns will be produced from here. And I have a strategy with which I can produce good returns. So I told her how many returns.
So she herself said that at this time, you have to invest in real estate. should not do anything. I tell you that what is the strategy which I am using with which you can also use it yourself and make money. Now see what happened.
I said that will someone buy a house and invest money. If I buy a house and buy a stock market, I can buy a house now, but if I am not buying a house and I am investing that money in the stock market, then it means that the house is sold and invested in the stock market. Both are the same thing. I am telling you that will people ever get so much confidence that they sell their house.
I don’t say you have to do this ever, but let’s say you have an extra property, you sell it and invest money in the stock market. You will say that the whole world will call you crazy. Till that time you don’t have confidence, the world will call you crazy. But I am saying that I did not buy this house and I am saying that we will invest this money in the stock market, but where? This is a great thing.
From here, what we are going to learn, you are going to enjoy a lot and what I will tell you, you will say that it is fun to hear. So now I will tell you a great thing. We are talking about the stock market.
So many people will say that buy this share, buy that share, this share is good. This can happen in 10 years, it can happen in 2 years, it can happen in 1 year, everyone will say.
Maybe it’s been 6 months, I have sold all my stocks. Whatever profit was coming, I sold it all, but immediately invested that money in the stock market. Where did I do it? No, no, not mutual funds.
Now we are just talking about stocks. So there are no stocks and everybody says that there is nothing better than stocks. Now you understand what I want to tell you. All those people who advise you to invest in stocks, I will ask them only one question and the matter will end here.
You buy your favorite stock, whatever you want. You say that this is my X stock and this is going to be the next titan. This stock of mine will be the next titan. My question will be that will you invest money by selling the house in it.
If you are going to buy a property of 5 crores and 10 crores, you leave that property of 10 crores and buy a stock of 10 crores. Do you have so much confidence? The guy will say no, no, no, this is not it. It is diversification. I will buy 10 stocks or 20 stocks like this and out of those 20 stocks, 2-4 are gone.
Then you are playing lottery. I should know for sure that money will increase. If our country will increase, then our money will increase. If we cannot invest so much money in a stock with so much confidence, even after all the analysis, then what is the use.
If that stock is 10 times more and if I had invested 1 lakh, then 1 lakh will be 10 lakhs. But if I have invested 1 crore and only 10% return came, then also 10 lakhs came. So if you understand this today. Look, I know that most of you, our India is very young.
Japan is getting old. Europe is getting old. In our India, there are a lot of young youth and youth have a lot of talent. He has a lot of time.
He has a lot of skills. So the chances of his growth are exponential. If you are earning 10-20 thousand rupees today, then you can grow exponentially. It is not necessary that you will earn 20,000-22,000 rupees.
You can jump from 20,000 to 40,000 rupees. You can jump from 40,000 to 60,000 rupees. You can jump from 60,000 to 1 lakh. So these jumps are happening.
This was not possible before. But what is happening now is that the good people who are making themselves skilled will bring exponential growth in themselves. Whatever business you are doing, whatever profession you are in, if you get exponential growth there, then the money you earn today, you will invest it somewhere. So I personally feel that you are going to do very well.
So what I am telling you now is very important to learn. So I told you a very important thing that today there is no stock in my own portfolio. Why don’t I invest in stocks? First I will tell you this and then I will tell you where I invest. I invest in the stock market.
But I invest with so much confidence that if I have 100 crore rupees tomorrow, then I can invest 100 crores. Without thinking about what will happen of this money. But there is a way to do it so that we do not have a loss. It should not happen that you put 1 crore rupees and the next day there is a correction Then you will get a heart attack that if there is a correction of 10% in the market, then you will say that there is a loss of 10 lakhs.
We don’t have to do this. We will understand this. So we are talking about stocks. See, there are two or three problems with stocks.
Also read: Top 10 Investment Tips for New Investors
One is that whatever analysis you do, we will learn fundamental analysis in this guide. There are definitely some good stocks that you will always see outperforming 50 and producing alpha. There are a lot of good stocks. There are a lot of good companies in the market.
But when you have stocks, what is important is that no man does concentrated investments that I will invest a lot in one or two stocks. He invests money in 10 or 20 stocks. So when someone is investing money in 10 or 20 stocks, you have a portfolio, then you call it a diversified portfolio. That my portfolio is diversified.
I have invested money in some banks. I have invested money in some IT. I have invested money in some pharma. You have invested money in different sectors.
So if you have invested a little money, then it does not matter. But if you have invested a lot of money, then you actively monitor these stocks. You see which one is going up, which one is going down, which one should I take out, which one should I rebalance, you will see a lot of things and you will keep doing this. If you keep doing this, then it will take a lot of time because you will take out a stock.
If the news is wrong in a stock market, the stock has fallen due to its management change, then that stock will keep running in your mind. When that stock will keep running in your mind, you are looking at it again and again, then whatever main work you do, you take out time from it and you are spending time on it. And the second thing is that no matter how good a stock is, no man does a lot of investment in it. He does limited investment and you are getting diversified anyway.
So this is my own belief that if I have to do this, if I have to invest money in 10-20 stocks, then why should I invest money in these 10-20 stocks. At the same time, I buy an ETF. Now you will say, what is this? What is this ETF? What is this new thing? And after this, we will talk about mutual funds. We will not do it now.
So I invest in mutual funds too. I invest in ETF too. But what is the difference? Active Investing, Active Monitoring, Active Tracking has been stopped. And I will show you, I will tell you the name of all the ETFs and I will tell you their strategy.
You will understand that your portfolio will always look green. All the diversified investments that you talk about, out of their 10-20 stocks, there will be some stocks that are dead. There are 2-4 stocks like this. If you want to invest in blue chip, then do it in nifty.
They will find a high growth company. They will bring it out of mid caps and small caps. But if they bring it out of the bottom, then if they have a portfolio of 10-20 companies, then 2-4 of them will be dead. They will be lying.
They will keep thinking about it. What investment did I do? I did it wrong. And after that, you can’t do anything because once you invest money, it’s over.
There is no need for stock market investing, but I have bought India’s and the world’s top stocks. There is investment in India’s and the world’s top companies. How is it and what is the strategy? It’s going to be a lot of fun. Because I am telling you the truth, I will tell you the stock market as I understand it.
In addition to this guide, I would like to tell you one more way to earn money is about trading, online trading. There are numerous trading platform like IQ Option and Olymp Trade. I prefer Olymo Trade. It is very simple to start trading. If you are new to it, you can start with demo account for which you don’t need to deposit any money. You can simply practice with your demo account. Once you are sure of making profit then you can deposit money for real trading. If you want try it now, then create an account for free with Olymp Trade.
Final Step (Compulsory)
If you are new in the stock market and you want to invest, want to trade, want to invest in ETF, want to invest in mutual funds, then you need a Demat account for that. You can open your Demat account for free. And one more important thing is that you are not getting annual maintenance charges.
You don’t have to pay any charges to open an account. And there are discount brokers, so you get very little brokerage. Once you get into it, step by step, you will be able to open your Demat account for free. Then only you will be able to do investing and trading. Demat account is must. Without it you cannot invest or trade. Go here for opening your Demat Account now for free.
Looking for one app to research, analyse, invest? Join Upstox!*
Opening an Upstox account is easy-peasy. All you need is your PAN + Aadhaar. You can sign-up online using my link within the next 7 days: Upstox.
Upstox makes investing fun and it feels just like online shopping!
With special filters + smartlists they make the search for the right investment simple
They’ve got SIP modes for both Mutual Funds & Stocks
They’re easy to understand with news, research & insights on all investments
And have a separate app for traders with TradingView, GTT orders, Option Chain