Options Trading Tutorial

Wants to Invest in Stock Market?

Hi, Friends I want to start investment in Stock market in short & Long term (both) depending upon market fluctuations Want to start trading Online Which option is best for me - through HDFC securities, ICICI direct.com, Or from Brokers like Sharekhan, Fortis I'm concerned abt. Commission rate they charge us for buying & Selling, Which has less Commission/brokerage rate. please give me detail information, i'm new in this & have keen interest in it. how Do i start & what next step i wud have to opt. for ?? Thanx in Advance :) Best Regards, Pankaj Kumar

Public Comments

1. Some companies have what are known as "Direct Stock Purchase Plans". They are the easiest way to invest your money for the LONG TERM. Many do not charge a commission and those that do only charge a very small "service fee". You can also reinvest your dividends and this allows you to dollar cost average. Do an online search for "direct stock purchase plans" and see what it reveals.
2. No, I think he's looking after online brokerages. For Americans like me; Scottrade, E-Trade and Ameritrade are fairly popular. Do a search for "online brokerage reviews in India" or "online investing comparisons". The most important thing is to ***completely looking into the fees***. You don't want to be surprised by any hidden transfer fees (in and out of the company), daily balance requirements, or trading fees. I personally use Scottrade, which is an American company. It's $7 USD per trade (thus $14 for buy and sell) and has free trading for some qualified mutual funds. Beyond that, it has all that you can imagine in terms of derivatives, commodities, bonds and such.
3. Hi Pankaj, Its difficult to give you any specific advice, since I don't know how much you may (or may not - as the case be), already know about investing. You stated that you 'want to start investment in Stock market' (sic) - so my assumption is that you are relatively new to the markets. If my assumption is incorrect (i.e. you are not a beginner), then atleast my answer would hopefully be useful to people who are taking their first tentative steps into the financial markets. My advice to such a person (a beginner) is to take your time to learn the basics first, before you actually start investing. I know that does not sound as 'glamarous' as someone promising to reveal a 'market secret' (by email no less) - but if you really want to know how to make money and survive in the markets - the three most useful lessons you will have to learn is: 1. DONT TRUST ANYONE 2. GET YOUR INFORMATION FROM MORE THAN ONE PERSON (Beware of 'gurus' who cannot be verified by a third party) 3. NEVER TAKE ADVICE FROM SOMEONE WHO HAS NOT BEEN 'VOUCHED FOR' BY AN UNAFFILIATED THIRD PARTY Making money in the markets is possible, but it requires work (research done by YOU) and discipline. Many people fall into the trap of thinking that the markets provide an easy and quick way for becoming wealthy. I hate to be a 'wet towel' to your understandble enthusiasm. Your best chance for survival in the financial markets (especially when starting out) is to follow the following simple steps: STEP 1: learn from people who have been vouched by others STEP 2: use the information/advice given, to guide YOUR OWN research STEP 3: Test out your research (paper trading), and ask more questions (STEP 1), if you are not happy with the results of your paper trading/testing Continue STEPS1 to STEP3 iteratively (i.e. over and over), until you have YOUR OWN SYSTEM, which you are satisfied with. THEN and only then should you think about entering the markets, as the probability of your success is much higher. The steps above are a basic guideline, but they give the general outline of what a beginner investor should do BEFORE foraying into the financial markets (forex, equities, fixed income, commodities etc)
4. First and most important: Do NOT worry more about commissions you may pay. It is a very negligible part of the entire transaction. And with intense competition, the brokerage rates are very very minimal. And almost all brokers charge the same brokerage. Start worrying more and more about - capital loss - the money you may be losing due to price fluctuation against you. One loses lots of money because of this and not because of commissions. Intra Day - buying and selling for short term / day trades is sure shot recipe for losing your capital, if you don't know swings in the markets. Start studying - technical analysis - to overcome this. Long term usually will give you lots of money profits, if you pick up your stocks with care. For this, you need to study - fundamental analysis - as well as keep updated about economy, company workings, macro picture of general markets etc. The best way will be to read a lot, to learn a lot and to discuss a lot with experienced people and learn from them. Do not mind even paying fees to learn the ropes. Treat it as an investment. Wish you all the best.