There are many instances of individuals becoming millenaries and billionaires only by trading in the share market. In India, there are many famous investors like Rakesh Jhunjhunwala, Ramesh Damani, Vijay Kedia, Nemish Shah etc. Beside this there are many day traders who are successfully earning their bread and butter from the share market. Obviously, making money by share trading is not a one day job. One needs to have the proper knowledge about shares and market movement. Sometimes gaining knowledge on your own is not sufficient. You may choose professional organizations for better guidance. Nowadays there are plenty of training courses available all over India and you may find stock market course in Kolkata and other Indian Metro cities.
In this article, we are going to discuss all possible ways of becoming rich by trading in Indian share market. As we know there are mainly two types of trading i.e. short term and long term. The article will cover both types of trading and explain the points of building wealth from the share market.
How to Become Rich by Day Trading in the Share Market?
Day trading is such a platform where some traders can make a fortune and some may also lose all their money. If you want to make money by day trading, you must follow a system. Here, are few points you should always keep in mind while doing day trading or intraday.
Points to Remember
- Intraday trading is always riskier than long-term investment as traders have to close their trading position within a single day. Therefore, the loss-making chance is huge in day trading; as such traders need to be disciplined.
- Never do over trading. It may cause loss. Stick to a single plan. Trade only when your trading conditions are met.
- Besides having share market knowledge, you must understand the trading psychology very well. To become a successful trader, understanding the market psychology is very important.
- As in intraday trading, to deal with volatility, always use stop loss and target order, especially stop-loss to limit your loss in trading.
How to make money by day trading?
1. Find Liquid and High Volume Stocks
For intraday trading, the time factor is too short. As you have to close your position before market closing time, search for the most liquid stocks for trading. By trading the most liquid shares, your profit making chances will be higher. You can find liquid stocks by watching the volume.
2. Trade only when You Understand
Trade only when your trading conditions are met. Suppose, you decide to buy SBI shares for intraday. On that day, you see that the SBI share volume is too low. On the other side, TCS has a great volume but you are unsure about TCS, you cannot understand its price movement. Now, what should you do?
A novice trader will buy TCS instantly but and an experienced trader will avoid it as he doesn’t have any idea on that trade. Therefore, trade only when your conditions are met. Do not trade shares which you don’t understand.
3. Always stick to your Decision
Try to stick to your decision until and unless any mishap happens. Suppose, you buy Tata motors 100 quantity shares at Rs.300/share. Your target is 310 and your stop loss is 290. Now, after reaching rs.305, the stock price suddenly drops to 292, near your stop loss. Lastly, it reverses back to uptrend and hits the target at Rs.310.
If you sell your shares out of fear before hitting the stop loss, you may lose the trade. On the other side, if you stick to your decision and be confident, you will hold the shares and able to book your profit.
4. Get rid of Greed and Fear
To become a profitable day trader, you have to win the two psychological dilemma, greed and fear. Before opening a position, take trading decision by analyzing the technical price action. You should be confident on your analysis and avoid the traps of greed and fear. Book your profit once your target is reached, do not be greedy and over trade. Do not sell the shares out of fear.
How to Make Money by Long-term Investment?
Long term investment is different from the day trading. So, for obvious reason, investors have to follow different paths to make money from the long term investment. Here are the few important points on the long term investment.
- For long term investment, investors need to have high level of patience. To build wealth in long term investment, one needs to follow the market thoroughly. Research and analyse the country’s economic condition, sectors and companies prior to investment.
A novice trader will buy TCS instantly but and an experienced trader will avoid it as he doesn’t have any idea on that trade. Therefore, trade only when your conditions are met. Do not trade shares which you don’t understand.
- Always remember the basic rule, buy low and sell high. Do not hesitate to buy shares when the market is down and sell the shares when the market is up. Never go with the crowd, trust yourself and your analysis.
- Do not hold shares which are making loss since a long time. Always book partial profits if you achieve your 1st target.
Conclusion
Making money from the stock market is not an easy job. So, you need to educate yourself on intraday trading, long term investment, basics of share market, and more by joining share market training in Kolkata, Mumbai, Delhi, and other places. You need to gather knowledge and experience to become a successful trader. You can become rich by share trading in India with dedication and experience. Define your investment goal and plan accordingly to become a successful trader.
