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Posted on  June 20, 2022 under : by Team Lakshmishree

Best Way To Earn Money From Equity Market

How To Earn Money From The Equity Market?

Investing in the equity markets comes with its share of risks but has the potential to create handsome profits too. A few tips and tricks will help you understand how to earn from the equity market. It is not rocket science! Thorough research and discipline are the keys to profit. Equity markets are the best option to compound your earnings and beat inflation.

Read on to learn how to make money from the stock market.

Understanding your attitude about the equity market

There are two types of investors in the equity market - Fundamental and speculator. They have different risk appetites and approach the equity market differently. They are focused on the strength of the stock rather than the price.

Discipline is key. You need to identify your investment style before you dip your toes in equity trading. It is best to deep dive into research rather than follow tips if you want to earn money in the equity market. A systematic approach to investing will help you generate profits in the long term.

Equity trading needs a fixed strategy.

You need to have a fixed strategy if you want to make money. It is not wise to jump from one plan to another if it is not working. Speculators have short-term or daily strategies, while value investing is generally a long-term strategy. Some investors also follow the growth strategy to maximize long-term profits. They invest in companies that have the potential to grow rapidly in the near term.

It would be best if you thought long term. Here are some tips to help you invest in equity trading in India and earn money.

  • Following the trend and trading in stocks with high volume is generally safe. It is not a smart move to spread yourself too thin. Select a few scripts and study them thoroughly.
  • The key factors are the price-to-earnings ratio, debt-to-equity ratio, price-to-book ratio, the moving average, and the price/earnings to growth ratio. Studying these indicators for a month is wise to be a value investor.
  • Fix the entry and exit point before you start trading. You must fix a price target before you invest in a share. The price target is determined by the history and the projected value of the share. This practice sets you free from the fear and greed cycle that stops you from making money in the stock market.
  • Always set a stop-loss order when you buy stocks. A stop loss is an instruction that automatically sells the shares when a price level has been breached. For example, if you purchased a share for Rs 1000, a stop-loss order at 5% will ensure that the stock is automatically sold if the price dips to Rs 950. This is crucial for beginners as it will help you minimize risk.

Long-term value investing is the safest option if you want to participate in equity trading in India. It is foolhardy to time the market as no one metric can accurately predict the movement of stock prices. Form a cohesive plan and follow it diligently to make decent profits.

How to start equity trading?

You need to Open a Demat Account and a trading account to start equity trading in India. The trading account will allow you to participate in intraday trading while a Demat account stores stocks electronically. As a long-term value investor, you would need both to start investing. It generally takes two working days to get the accounts functional. Look for the best equity trading platform to handle the requirements.

Once these accounts are linked to your bank account, you can start buying and selling shares in the equity market.

Bottom Line

Smart value investments can help you earn money in the stock market. Investing in stocks is dynamic. You stand to make smart profits, but there is also the potential to lose money on some days. Keeping calm and having the patience to create wealth from equity trading is crucial. Diversifying your stock portfolio will help mitigate risk to a large extent.

Investing through the best equity trading platform is wise to ensure guidance and ease when investing in the equity markets.

Written by Team Lakshmishree

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