The right approach to Stock market training for beginners
Can I get the best stock market training for beginners?
If you are having the same question, then this article can be the best place to seek the answer. Doesn’t matter if you are a beginner in the stock market or you are already a market participant of the market, the article will clear all of your doubts and myths about the stock market. As there is a saying that the start-up of any business if done with the right approach, then half the work is done.
To succeed up to 50% at the beginning of stock market training, one should understand the basics of the stock market in a very depth and psychological way. The psychology of the market plays a role in more than 60% to generate the profits from the share market.
In this article, you will get all the summaries of what a beginner should do while entering the stock market.
— — — — — — — — — — — — — —
The first step for beginners to start the stock market training?
First, Open a Demat account from which a trader can make orders. A broker is needed who can make you interact with the National Stock Exchange and Bombay Stock Exchange. NSE and BSE don’t give you direct access to trade with them. So, there are two types of brokers ‘Discount brokers’ and ‘Full-Time Brokers’.
Full-Time brokers
If a trader wants all kinds of 24*7 customer service facilities, then he can go with the ‘full-time broker’. He will surely charge a little high as compared to discount broker but you can rely on his service as a Calling facility, Trading portal hang and many more.
A few examples of Full-time brokers are Findoc, Sharekhan and Anand Rathi.
Discount brokers
As there were only full-time brokers, recently some brokers have introduced themselves as discount brokers. They reduce their services as they felt are not much needed by the traders, such as Calling trades.
When a trader can put an order of Buy and Sell from the internet by the portal of the broker, then it is convenient for brokers as they are not giving the full service. They obviously charge less than Full-time brokers.
A few examples of Discount brokers are Zerodha, Upstox and Angel Broking.
— — — — — — — — — — -
The second step for beginners to do in stock market training
In the stock market training, after opening the Demat account the next step is how to read the price action chart. The best portal to study and analyze the chart is tradingview. It is available on the desktop and in mobile as an application also. To go to the chart click on the “Tradingview”.
To analyze the stock market charts, a trader or an investor should know the terms of technical analysis. I am touching on some basic concepts of technical aspects of the stock market which can help you analyze the price charts technically.
Support Resistance in technical analysis
The basic knowledge of Support and Resistance is necessary to go into the depth of technical analysis as they show the supply and demand of the price. Before going into the price-based indicators, a trader should study the naked price action as the Support and Resistance is the simple line we draw horizontally to analyze the charts.
For example — An I phone people are expecting to launch at 500$ and it has launched at the price of 600$. Now the 500$ is a psychological number is 500 in the price chart because whenever the price will come near 500, it will jump again because many buyers want to buy the I phone at this price.
If the selling is much more powerful than buying, and the price will break 500$ then the same psychological number will react as resistance or supply.
So, to study the basics of price, a trader should study the supply and demand of price.
Few more technical aspects such as Candlestick Patterns, Head and Shoulders patterns, and Indicators like RSI and Volume are good to analyze the price.
Elliott wave principle
The Elliott wave patterns are discovered by R. N. Elliott in the 1930s. Elliott discovered the wave theory in which he studied all kinds of patterns a price can make based on the historical price data.
Elliott found that the price if shows a trend, then it can act as an impulsive move which should be a 5 wave move. also, if the price shows the retracement, the price corrects itself in a 3 wave move.
The best thing Elliott discovered is that all the waves are formed because of the emotions of the market participants. It reflects the Greed and Fear of the market participants.
Elliott decodes mass psychology and it is a very good way to forecast the market. Main tools are used in Fibonnacci retracement, Fibonacci extensions, trendlines and Support plus resistance.
The third step for beginners to do in Stock market training
The third and main step is to understand market psychology. A trader should know how his emotions are working in the unstructured market.
Sometimes a trader after his analysis wants to buy the stock, but his emotions tell them to wait. After some time the stock flies up and doesn’t give them time to buy trade. Same, next time when the trader sees an opportunity and wants to buy the stock. Now, the analysis demands confirmation but the trader triggers the buy button because he doesn’t want to skip the profitable trade again.
This is called the Fear of missing out. A trader is trigged by his emotions all the time until he set the right approach to the process and sticks to it as a disciplined trader.
Many other situations come when a trader loses his sane and reacts to his emotions. Such as, exiting a position by watching the live price coming down. It scares a trader and made him feel like the world is going to an end but the fall is actually not more than 1%.
From the participant’s emotions to a trader’s emotion, a good trader experience all those emotional possibilities and design his disciplined process, in which no matter what he should stick to his process.
From Beginner Stock market training to professional level
After going through these basic points, a beginner can only become a mature trader only if he took these points seriously. He should work on them and have a good level of experience observing them.
The stock market is not a difficult game if a trader does it in the right process with the right approach. Let the price be your friend. Spend some time with him and let the time do his work. The market definitely rewards the trader who does the hard work consciously and believes in the learning without getting biased.
Books of Stock Market Training for beginners
A few books I would like to share for beginners of the Stock market are
