Well, it won’t be incorrect to talk about how to buy stocks in India; especially if you are planning to invest in the Indian market and unfortunately are unaware of the same.
So, let us give you a quick glimpse of Indian Stock Market and its various parts.
Indian Stock Market is monitored and handled by Security Exchange, namely SEBI(Securities and Exchange of India) and within the market, there are 11 different sectors such as automobile, IT, industry, pharmaceuticals, etc.
In addition to this, an investor or a day trader can buy stocks and other securities listed in Indian exchanges including BSE, NSE, NCDEX, and MCX. Besides this, there are other regional and national exchanges as well.
To buy stocks or to sell them, one must have a demat account with a stockbroker registered with CDSL and NSDL. It can be internally seen as a CDSL Demat account or an NSDL Demat account but it must be opened via a stockbroker only.
Besides this, make sure that your trading objective is clear and you got an idea of how the stock market works.
Once you are ready with a demat and trading account and have deposited sufficient funds to make your first trade, it’s time to follow certain vital tips. These tips to buy stocks are listed below:
Start with small chunks
Pick the right segment and sector
Learn the risks associated with the chosen segment and sector
Define a trading strategy
Choose the appropriate order placement
By following these tips, you can follow two successful ways that can guide you on how to buy stocks as a beginner. These ways are underneath:
Buy stocks for long term
Buy stocks for short term
This might seem to be pretty complicated but it’s fairly straightforward. Let’s find more about these!
How to Buy Stocks as a Beginner?
If you are a beginner, then picking the right stock for investment is quite a cumbersome process. But if you plan to invest in the stock market, don’t step your foot blindly.
Rather besides understanding the market, make sure you understand the following key points too:
⭐ Understanding of how the stock market works
⭐ Knows when to buy stocks or sell them off
⭐ Have in-depth knowledge of placement orders
⭐ Know about the market volatility and fluctuations causing bull and bear conditions
⭐ Have a goal that meets your trading requirements and a lot more!
If you successfully fulfill all these basic needs, then the stock market journey is just a step away.
As earlier, there are two different methods in which a beginner can buy stocks online, namely research and tips.
Research is generally well suitable for the long-term investors where they can themselves perform technical and fundamental analysis of stocks.
Contrary, tips, and recommendations are perfect tools for short-term investors who are unable to give time and effort while researching the great stock for them.
Let us have a quick start with a beginner who wants to buy stocks for the long term!
How to Buy Stocks for Long Term?
New stock market traders and investors might also want to consider the research method for long-term investment. As a newbie, it’s surely a complex way to buy stocks, however, it’s more personalized and assists you in building better decisions based on your requirements and goals.
So, if you wish to know “how to buy stocks for the long term”, then it surely is the way of analysis where a beginner has to perform technical and fundamental analysis using trading tools, charts, etc. to buy shares in India.
Once you have stepped into the stock market, it’s time to dive into the process of picking the right stock without the assistance of any advisory.
Begin with a simple and clear objective: to find better companies to join. But, make sure you don’t let the flood of information and live market fluctuations overwhelm you while carrying research.
As it is said by Warren Buffett- “Buy into a company because you want to own it, not because you want the stock to go up.” And you know how his trading journey has been an example for many investors.
The right way to buy stocks will be to search for profitable companies after selecting the desired sector and segment. A good start will be to choose certain companies with whom you are familiar and have their business understanding.
Once you have identified these companies, it’s time to begin with little research. To buy stocks as long term, start with a fundamental analysis of the company and take the below reports into your account:
▶️ Financial Report including total assets, income, expenses, and profits after taxes.
▶️ Industry analysis by peer competition
▶️ Evaluating performance by measuring ratios such as RoNW, P/E, PEG, EV, P/B, and many more!
This analysis will be greatly effective and useful while determining how well the company is working through the numbers.
According to the famous quote of Luís Alberto Urrea “Numbers never lie, after all: they simply tell different stories depending on the math of the tellers.”
In the stock market, where profits are earned on a little number of fluctuations, fundamental analysis can prove to be an excellent door to long-term investors.
There are some full-service and discount brokers who offer complete fundamental analysis on a stock or shares. Depending on your requirement, you can have easy access to this tool too!
After doing fundamental analysis and selecting the right stock, make sure you build a successful career in buying your first stock by using different market order types.
They are a perfect tool to minimize risks that can occur due to major fluctuations in the market and stock.
Now, let’s understand the second way of how to buy stocks in the share market!
How to Buy Stocks for Short Term?
Along with the long-term investment, you can go for the short-term traders like intraday or swing trading. Also, you can go for trade-in derivatives segments as well.
The simplest way to buy stocks for the short term is by following the valuable buying tips offered by Industry experts.
If you want to make a short-term investment in equity, commodities, mutual funds, or even in currencies and derivatives, there are various leading stockbrokers in the market that can offer you useful and personalized tips on each one of them.
After having access to a stockbroker’s trading platform, you can get free tips or recommendations and even you can avail a pre-loaded basket of various stocks that can meet your short-term requirement.
Hence, you won’t be required to perform the complex research and analysis, rather you can choose the profitable stocks listed by the experts.
In order to buy stocks, some stockbrokers charge a certain amount to provide their tips and recommendations services, while there are others who don’t charge any fee from their customers such as Samco.
Therefore, you can select such brokers who can offer you readymade baskets of stocks that can give enormous returns in the short run. If you want to use these tips for the long-term goal, even then you can opt for them.
You will feel absolutely no pressure to buy stocks when you don’t have to follow in-depth research on companies and stocks; which is generally exhausting for a newbie.
Now, isn’t it important that in order to buy stocks you must choose the stockbroker with 3R’s? Well,3R’s means a broker who is right, reputed, and reliable.
Perhaps, with a plethora of brokers in the market, it’s a bit exhausting to choose the valid one without any research.
So, to make your process easy and fun, we have considered some points to know how to find a broker to buy stocks in India. Let’s begin!
How to Find a Broker to Buy Stocks?
Well, there are a lot of fancy key conditions of the broker with three 3R’s but we believe that the right broker choice should be made solely on three parameters:
Broker offering the lowest and affordable brokerage with advanced trading platforms.
Stockbroker offers free tips, research, and recommendations after analyses done by industry experts.
Impeccable trading and analytical tools to monitor risk and calculate fundamental ratios.
If you feel that you are going through rough patches while selecting such a broker, then let us name one for you!
Samco, a leading and among the rarest discount brokers who provide an excellent recommendation, stocks basket, portfolio risk management tools, and even conducts technical analysis of the stocks.
Besides this, Samco is one of the prominent brokers that charge a convenient price of FLAT Rs. 20 per order executed across currency, commodity, derivatives, and equities segment!
The charges or the brokerage in options and other segments are completely transparent and the value is fairly calculated without imposing any hidden prices!
Being one of the few discount brokers to offer a reliable and highly advanced GIGA trading engine that has a perfect combination of AI (Artificial Intelligence), Samco makes your trading process quicker and smoother!
Brokers offer different trading platforms as per the needs of customers and some of them are listed as below:
They have an app named RankMF, which is a dedicated application for Mutual Funds investors. Through their free tips, advanced analysis, experienced advisory, and over 20 million data points in evaluating mutual funds, one can make a correct decision.
Samco Trader is a perfect desktop trading application for individuals to buy shares in India who desire lightning order speed, advanced chart patterns with over 100 indicators, quick shortcuts, bulk ordering, advanced order types, a facility of multiple watchlists, and much more!
With over 1 lakh installs, StockNote is a mobile trading application to execute orders at your fingertips. Through the app, get quick alerts, notifications, tips, news, economic calendar, and can even perform technical and fundamental analysis of stocks at a go!
If you are a newbie in the stock market or a seasoned investor who wishes to buy stocks and can’t waste time and effort on choosing the profitable stock, then make sure you give StockBasket an opportunity. Through the application, buy industry expert’s selected stocks showcased by examining 25 Intelligent Stock Rating Parameters. Pick any stock from ready-made baskets and meet your financial goals!
Not just this, the firm offers one to deploy customized Algo Trading techniques and ideas by using FREE StockNote APIs. These APIs make your journey powerful, flexible, endless and you get to execute trades seamlessly at a higher quantity.