Share Market for Beginners | Part 1






What is Share Market?


"Share market is basically a Place where Companies list their share for raising funds through public." 

For example: Whenever you Take shares of the XYZ company; You become Shareholder of XYZ company and whenever company performs well, then you also get benefitted So for this you need to select the right stock that will perform better in future and gives you returns on your invested money.
(Selection of right stocks will be covered in the upcoming points)


Let's Understand Share market in a Simpler Way!

  • Consider Share market as a Snake and ladder Game.
  • Many times you get the Good Share which is performing well and giving you returns just like you get ladder in Snake and ladders Game, which moves you up!
  • As the ladder work in snake and ladder game same this share will give you high returns in Less time.
  • Also, many time you get the bad share which pushes you backwards just like Snake. It means this share will cause you to loose your Invested money.
  • In this game of Snake & Ladder your Luck makes you win; But in case of Share Market right analysis of stock makes you win the game.

Types of Share Market:

There are two types of market :

    1. Primary Market 
    • In this Market Company comes for issuing their shares to Public.    
    • Companies have to do Initial Public Offering (IPO) for listing their shares in Share market. 
    • For issuing IPO; Companies have to eligible and fit in criteria with SEBI's Rules and regulations.{SEBI- (Securities & Exchange Board of India)

    2. Secondary Market
    • In this market, trading of shares takes place.
    • After the IPO listing some people sell their shares in Secondary market for listing gains.

Stock Exchanges:

"Stock exchange is the place where the actual Buying and Selling action takes place."

There are two Stock Exchanges in India, Those are-
        
        1) NSE (National Stock Exchange)

        2) BSE (Bombay Stock Exchange)


Comparison NSE vs BSE:


NIFTY 50:

Nifty is index of National Stock Exchange. It is the Index of top 50 listed companies in NSE. The term Nifty is derived from the combination of National and Fifty. Nifty consists of 50 actively traded stocks. In April 21, 1996 Nifty was introduced by National Stock Exchange as an equity benchmark index.

SENSEX :

Sensex is index for Bombay Stock Exchange. It is the benchmark index of 30 most actively traded companies representing whole BSE. 

Why Companies List in Share Market?

As we have seen in recent points that In share market companies sell their Shares & take funds from the public. But then the question comes why only from share market why not from Banks?
  • Companies can take funds from bank also, but in case if they get into a loss, then bank will ask them for repayment along with the interest.
  • They will not leave that company until and unless they repay loan amount; & if the company is not able to pay their loan on time then Banks will acquire their assets to recover their money.
  • Banks don't think about the future of the company, it only cares about its loan.
  • In this situation the share market comes into picture; Whenever a company gets listed into the Share market it provides its shareholding to the Investors. 
  • And that company takes the funds from investors in return for providing shareholding in their company.
  • Investors or Public take participation in Share market because if  that company Performs better then the share price of the company will rise  and this will also increase the value of shares they have.
In the absence of share market, Companies will not able to take money for their growth without paying interest; And this is the major reason why companies enter into the share market, to raise the funds at the time of requirement.

Share Price Fluctuations:

You might be wondering why Share Price changes? Below is in detailed explanation for your Question!
  • In Vegetable Market you may have observed the price of potatoes, onions and other vegetables are at Low price and Sometimes at Higher price. 
  • This Price fluctuations in Vegetable market happens because of Supply and Demand scenario.
  • Whenever there is rainy season price of vegetables increases as of low Supply and High demand.
You might be wondering that how the Share Market is related with Vegetable Market?
So let me clear that In Share market & in vegetable market you have to use the same fundamentals.

Importance of Analysis :

We have seen that many of the people thinking that the Share market is pure Speculation and Gambling kind of thing. But its not actually depending on that; people who do their own analysis depending upon company performance takes the right decision to invest in a company or not! So the people who are not able to analyze data and are dependent on any others 'TIP' will always say Share market as Gambling and Speculative type thing.

There are two Types of Analysis:

            1) Fundamental Analysis:

                    It is mostly dependent on Following factors
        • Company Management 
        • Competitive advantage 
        • Business Model
        • Balance Sheet 
        • Corporate Actions                      

 
           2)Technical Analysis         
                
                It is done on the charts with indicators. Some of them are:
        • Trend Line
        • RSI (Relative Strength Index)
        • Bollinger Band
        • DMA(Daily Moving Averages)
        • EMA (Exponential Moving Averages)
        •  Candle Stick                                   
                        

How to Invest in Share Market?

For investing in Share market you require De-mat account that is De- materialized account. De-mat account is the place where all your shares are stored, Just like your Bank account; Where all your money is stored. You can open your De-mat account with your broker at the time of account opening.



 
You can invest in Share market through Different Brokerage firms. You can not directly buy and sell in Stock Exchanges without any Brokerage firm; So you need one Brokerage firm to Invest or Trade in Share Market. 



Brokerage firms are the mediators between you and Stock Exchanges; Brokerage firms give you interface through their app or website to buy and sell and charges some brokerage for giving you service through every transactions.

So for Every Investor and Trader we require one Broker who gives us:
  • Free De-mat Account
  • Best interface, 
  • Low brokerage  
  • Good customer support. 
Here is the  quick tip for you all to start your Share Market Journey!

I have found one Brokerage firm called Angel Broking Pvt. Ltd. that met all the parameters and also I have been actively Investing and Trading in Share Market with this Brokerage firm from past one year.


Angel Broking Provides
  •  Zero Brokerage for Investing and 20Rs/Order for Trading.
  • One month Free Advisory on Which Stock to Buy.
  • Also you get additional Free Webinars and Courses on different Topics.
  • You also get Free access to smartmoney for learning Share Market on Your own.
That's What New Share Market Learner Requires! And all this is available in one place.

If you want to Open your account to get all these Benefits You can Click on the Link Below!

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