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See, if you are like me then you think about
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earning money all the time.
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So that you can get a good education,
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secure your family's future
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and also save enough money to travel, enjoy life.
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And I am guessing that is why you are interested in the Stock Market.
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But the problem is,
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whenever you go to any financial expert, they will give you
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the same advice that they will give 30 other people
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without understanding what are your specific requirements.
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So you can listen to all the experts
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but the only person you need to trust for
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Stock Market advice is....you.
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And here's the best part...
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learning it is not rocket science
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and today I am going to tell you where you need to start.
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So Ladies and Gentlemen, welcome to Part 3 of
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Stock Market for Beginners.
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If you have not watched Part 1 and Part 2 on my channel,
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please watch them first otherwise
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a few things in this video might go over your head.
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But in case you've watched them already, then
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what are you waiting for?
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In today's video we are going to discuss,
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How to make the best Stock Market decisions?
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Step-by-Step procedure on how to buy your first share using KITE.
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But most importantly, towards the end, I'll give you a Bonus Tip
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so that you don't make the same mistakes that beginners make in the Stock Market.
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But before that, if you like my work
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make sure you hit that 'Like' button
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because it tells me that I should make the next video soon.
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Let's begin.
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In order to make the best Stock Market decisions,
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you need to do two things.
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#1: Stay Updated
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The best Stock Market decisions are made by people who are
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aware of what is happening around them.
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Because local, national and international news have a huge impact
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on the Stock Market like
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changes in oil and gas prices,
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Rupee vs Dollar rate,
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Union budget, elections, even any rain related prediction
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because most of India's agricultural production depends on the monsoons.
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So staying updated with what's happening around you
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will help you decide what is the right time
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to buy or sell stocks.
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Let me give you an example.
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After our Director General of Military Operations announced
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that surgical strikes happened, it rekindled
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war tensions between 2 nations.
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Whenever there is negative news like this, it causes a
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knee-jerk reaction among people who sell their shares
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causing the share prices to go down.
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When surgical strikes were announced,
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Nifty dropped as much as 2.1 percent.
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So everybody who thinks that war is the answer to everything,
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...think again.
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Because not only does it gravely affect our Jawans who are standing on the border
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but it also affects our Indian Economy as a whole.
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Nifty recovered later but staying updated with the news
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and reaction to that news is crucial especially when
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you are involved in intra-day trading.
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Now, how to stay updated?
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You can read financial newspapers like Economic Times,
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magazines like Forbes India.
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The more you read, the better sources you will find.
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You can also follow me on Instagram because
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I keep posting interesting news items on my Insta stories.
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To make the best Stock Market decisions, you need to #2 Research about the companies.
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See, whenever you go for grocery shopping
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before deciding which packet to buy, you check various parameters
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like Energy, Carbs, Protein, Fats ..
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Similarly, whenever you go for company shopping
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you need to check a few things like their
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Annual Report, Financial Data, Past performance,
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how innovative that company is,
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customer satisfaction, what news are they making..
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Are they launching a new product?
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Doing some merger?
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Changing their management?
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Or are they in news for some scandals?
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These and many other parameters will help you decide
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whether a company is doing well or
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will it do well in the future?
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I know it is sounding complicated but trust me,
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the more you analyse companies, the easier it will get.
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Let me give you an example.
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In the Stock Market, you can even invest your money in a particular sector like
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the Pharma Sector, Automotive Sector, Banking Sector etc..
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So in the recent months, the Automotive Sector, which includes
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companies like TVS Motors, Mahindra and Mahindra, Ashok Leyland etc..
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have noticed a huge drop in their sales. So they were hoping
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that when our FM Nirmala Sitharaman will announce the Union Budget 2019,
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there will be some good news for the auto industry.
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But in the Union Budget, there was nothing for them.
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Infact, diesel and petrol prices have increased.
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Now there are 2 investors.
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A and B.
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A thinks that the prices of Auto company shares will go further down,
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so he decides to sell all of his Auto company shares.
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But B notices that our FM has given good news for
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Electrical Vehicles (EV)
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in the form of GST cut, tax reduction for EV car loans.
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So, B does further research to find out
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which of the auto companies are making a shift to EV in future.
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Let's assume it's Maruti.
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So, B checks other parameters of Maruti and her intuition says
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that even though Maruti sales prices have dropped for the past few months,
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when they will release the electrical Wagon-R, their share prices will go back up again.
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So, B decides to buy the shares of Maruti.
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Isn't it interesting?
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This is just a simple example of how you combine
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news with company research and your intuition
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to make a decision.
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Now, only time will tell whose decision is best.
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A or B's.
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If B has made the right decision then she is going to make a lot of money in the future.
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Making the right decision in the Stock Market comes from
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knowledge and experience.
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And to gain experience, you need to invest small amounts
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to stay in the Stock Market long term so that
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you can learn from your success and your failures.
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Now, if you want to gain the right knowledge
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then I have some courses for you to start with.
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As I mentioned in my previous videos, only if you
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use the link below in the description and
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open an account with Zerodha, then you will receive
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these 7 trading and investment educational courses worth Rs. 31,500 for free!
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One of these courses also teaches you how to invest in a basket of stocks
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depending on your age and your risk taking ability.
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So if you think Zerodha is right for you, then
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complete your registration and start learning!
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Finally, we have arrived at the section you have been waiting for.
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For you to understand how to use Zerodha's trading terminal,
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today as an example, I am going to buy 1 share of ITC.
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You can do this both on your desktop as well as on your mobile phone using the KITE app.
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As mentioned in the Part 2 of this video series,
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after completing your Zerodha's registration process
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you will be sent your KITE login details.
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So first, you need to login to KITE by
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entering your UserID, Password and Pin.
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I am going to show you what a brand new account looks like.
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As soon as you login, this is the screen that will be displayed.
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On the left hand side, you will find the Market Watch.
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This is where you can add the companies that you are interested in following
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so that you can Buy, Sell or Query Information about them right from here.
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Now because we want to buy ITC, let's first add ITC to our Market Watch
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by searching for 'ITC' and clicking on the '+' sign.
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This is the last traded price which tells us
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how much the stock is trading at, at the very moment.
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If you click on the 'Market Depth' button, you will see
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these numbers. The 'Open', 'High', 'Low', 'Close' ranges
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give you an idea of at what price point the stock opened,
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the highest point it was at throughout the day etc..
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If you want more clarification about these numbers
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I'll tell you what to do in a minute.
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Now, our goal is to buy 1 share of ITC
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but before we do that, let's add some funds to our account.
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I will go to the 'Funds' tab and transfer some
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Rs. 1000 to my account here.
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You can transfer how much ever amount you want
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depending on the shares you want to buy.
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After the transfer is complete, let's go back to the dashboard.
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Since we want to buy 1 share of ITC, lets click on the
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Buy 'B' button next to ITC.
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And this order form will appear on the screen.
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Here, you will see 'Order Type' which has 4 options.
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Market, Limit, StopLoss and StopLoss-Market.
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Let's understand what these options are.
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You can place a 'Limit' order when you are particular
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about the price you want to buy the stock at.
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As you can see, the last traded price of ITC is 249.70
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But say, I want to buy this share only when it falls to 248.
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In such a situation, you can opt for 'Limit' order.
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But the problem is, if the price doesn't fall to 248 or below
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then you will not get the shares.
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But suppose you want to buy the share at
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whatever market price it's available at right now,
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then select 'Market'.
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Right now, the market price is 249.55. But the issue with this is
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if you are placing the order and at the same time
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the market price also goes up to say, Rs. 252
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then you will get ITC at Rs. 252/-
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This means, when you place a market order
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you can never be sure of at what price you will
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undergo a transaction.
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CNC, Cash and Carry is for Delivery Trade i.e
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if you want to hold the shares for a few days, weeks or years.
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And MIS is if you want to trade intra-day i.e if you want to buy and sell on the same day.
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So I want to buy one share of ITC,
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at Market price and I want to hold it, so I am selecting 'CNC'.
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Now I hit 'Buy'.
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As soon as you hit buy, your order gets transmitted
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to the exchange. You can go to the 'Orders' tab
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and check your details in the Order book.
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If your order has been executed, the status will say 'Complete'
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and now you can see an entry in the 'Trade Book'
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which is right below the order book.
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So now I officially own 1 share of ITC and this will
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remain in my DEMAT account until I decide to sell it.
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And that's all it takes.
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I would highly recommend that you first read KITE User Manual links
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that I have mentioned in the description
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so that you understand all the options available
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before you buy your first share.
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Finally, it is time for the Bonus Tip
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but before that, if you want to receive a notification
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everytime I make a Career or Spoken English or Finance related video
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then on my YouTube channel, make sure you
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hit that 'Subscribe' button and click on that 'Bell' icon.
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Investment guru, Warren Buffett has said
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and nobody else has put it better.
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Stock Market is not one big, right or wrong decision.
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It is a combination of small decisions (right or wrong)
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that will teach you how to identify good companies.
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As you saw, both A and B made different decisions
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to Buy and Sell.
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So who do you think will make the most money?
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I'll tell you.
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The one who will keep learning
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by investing small amounts.
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So today's Bonus Tip is this
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Start small.
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Please don't invest huge amounts on your first day.
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Take advices from everybody, experts, stock brokers.
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But only you can make the best Stock Market decision
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by learning, working hard and gaining experience
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which is the only way to generate long-term wealth.
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Are you interested in learning more about how to make money?
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If yes, then type 'YES' in the comments below or type 'No' so that
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I know whether I should make more finance-related videos or not.
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On that note, I promise to see you again in the next video
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until then, keep fighting The Urban Fight to be Fit!