Indian equity market is quite volatile. Many Indians take interest in this equity market either as full time profession or sometimes for time pass with aim of generating some profits with marginal investment. Those who want to play big by investing huge amounts and stocking also have good scope in Indian market in the long run. In either case one can work out positive figures only if they keep in mind following 10 things about the Indian equity market:
- Knowledge of Shares: Before beginning trade in Indian equity market, it is a pre-requisite to have knowledge of listed companies and their shares.
- Introduction with technical terms: Anyone entering into stock market live must be very well familiar with terms like face value, market value, dividend, portfolio investment, mutual fund, market index, bull, bear etc. Needless to mention that this will help to understand the trade in a better way.
- Awareness about Indian Stock Exchanges: A trader could work more efficiently if he could deal in multiple Indian exchanges like NSE and BSE.
- Trend Analysis: Those who can judge market movement trend over a period of time of one share or multiple shares, it becomes easier for predicting share’s future course of action. Accordingly, right decision for investment or de-investment can be made.
- Fund Management: It is wise to divide your investment in multiple funds rather than investing whole sum in one company’s shares. This will decrease the chances of losses in case a company’s share price falls too much or the company gets delisted.
- Set a target: When you trade in equity you must set a target in terms of expected profit. This will help you define purchase of number of shares and set amount of investment so as to get expected return on investment in desired duration.
- Book Stop Loss: In expectation of higher profits, it is certainly not always right to purchase higher quantities when prices are falling. Sharp analysis of past, current and future of particular company’s shares’ movement will let you identify the right time to sell or buy the shares so as to book minimum losses in case of adverse situation.
- Demat Account: If you are trading independently for part time job or as a hobby, it is compulsory to open a demat account for trading in equity. Demat account is opened with depository participants (DPO).
- Broker: If you are looking forward to take equity trading as a profession either by way of arbitraging or by way of client portfolio management then you must join best stock broker. Popular brokers are able to serve traders sound infrastructure, high speed internet and large scale of operations which ultimately enhances chances of striking every opportunity.
- Policy Change: Any major or even minor change in country’s political affairs or socio-economic policy affects movement of many company’s shares. Thus, one must have in-depth understanding of foreign investment policy, loan policies, RBI’s other financial policies, elections etc. and how they may affect equity market.
Those who are aware of all mentioned above are likely to give higher productivity in Indian Equity Market.