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  • Category: Stock Market

    How to earn money daily from share trading


    Interested in share trading? Looking out for advice to regarding equity, mutual funds, IPO etc? Scroll through this Ask Expert page for inputs and decide how to start share trading.

    There are various options from Share (Market) Trading. Equity, Mutual Funds and IPO etc. and we just knew them by name only without practically investing in it or dealing as scuh.

    As a layman, what are the best option in share market to invest and earn little money daily? Kindly let us know step by step on this.
  • Answers

    6 Answers found.
  • The capital market or popularly known as the share market is a lucrative destination for genuine investors as well as other speculators. There are various ways of investing in the share markets. In general, there are two types, the first one is the market of the primary issue and the other is the market of a secondary issue.

    Investing through the primary market:
    The primary market is the market of the first issue when companies launch shares for the first time in the market. It's popularly known as IPO(Initial Public Offer). When a company launches its shares in the market it not only benefit new investors but also existing investors and even the whole market. For instance, when coal India launched its 15200 crores IPO in 2010 whole market prices of securities were rising and investors gain a lot. So investors can invest in IPO and hold the shares for a reasonable time until the price rise or can even retain them for a lifetime for earning regular dividends, in case of companies declare a good yearly dividend if the credibility of the company is high.

    2) Secondary market: In the secondary market purchase and sales of securities are done regularly and hence investors gain by way of square-off transactions and other methods. It is sometimes risky and requires good analysis of investors but a windfall gain from such investing is sometimes very high.

    3) Investing in loaned funds of companies: Companies operate on two things, first, is owned funds and second its owned funds. Loaned funds primarily consist of debentures and which are safer instruments and you can earn annual interest payments. Shareholder enjoys residual income and company only pay them in case of profits but interest on debentures is compulsory and even debenture holders can earn cumulative interests in case of cumulative debentures. So these are minimal risk instruments.

    Mutual funds are investing in the equity of separate industries in proportionate amounts and the biggest advantage is that if one industry falls then even it can be cushioned by another industry and hence our investment loss minimises.

    So, you can go for any type, if you desire to earn in a fast manner then day trading and seeing trading are better options but there you have to face a lot of risks but remember profit is a reward for risk taking and slow and steady but secure investing for the long term can also help you make good sum.

  • Share market is a place where one can buy or sell company shares, subscribe to new issues (IPO), buy or sell mutual fund units, buy or sell many other financial instruments etc. For doing these operations seamlessly and in a continuous manner on a daily basis or on a time gap basis, one has to have a Demat account which can be opened in any bank or the financial entity which provide this online service on a fee basis. Whenever you do a transaction they will be deducting some small percentage from the proceedings which is called brokerage. Different banks/companies have different schemes of deducting brokerage and charging annual fees and one can select as where to open an Demat account on that basis.

    Let us now go one by one to these investments in greater details to understand the modalities and subtleties of the subject. Companies raise money by issuing equity shares to the investors and many people apply for them at the time of IPO and at that time shares are available either on the face value or with some premium on it depending on the company profitability, reputation, and goodwill in the market. Once those shares are sold to the investors then they can sell them in the market depending on the price they are quoting in the share market. I have seen cases when people bought shares through IPO and within no time they started quoting very high and investors made profit by selling them. But it does not happen like that every time and many times shares quote at lower than the issue price and investor loses money or keeps them for a long time waiting for the rise. There are so many companies whose shares are quoted in the market and their prices change with time depending on the company performance as well as market sentiments. Market sentiments can drastically change with the political scenarios and war and peace like situations. Then the economic progress is also one factor which fuels the share market. Making money in share market is not an easy job as one has to study about a particular share and that company and speculate about its future based on that knowledge. It is generally believed that if one invests in good companies (known as blue chip companies also) then the chances of losing money are minimised and in long run, generally people make a handsome amount. This would require patience to hold them for a long time. These top companies generally reward the investors through bonus shares, right shares, good amount of dividend etc which adds to the return on investment.

    Let us now come to the Mutual Fund (MF). We buy the Mutual Fund units from the Mutual Fund house either as a new issue or based on the market price. The Mutual Fund companies invest this amount in shares as well as debt instruments depending upon the type of scheme. An equity scheme will invest only in equity while a balanced scheme will invest say 60% in equity and 40% in debt instruments. What we mean by debt instrument is like company deposits, debentures etc where return is fixed and low but risk is also less. On the other hand shares are always a risky investment. So, many MF schemes will invest in a balanced way also. There are also some pure debt schemes which provide low return with less risk. Those people who cannot do the share trading directly go for the MF route as MF companies will be doing same thing for them in a more knowledgeable manner as per their experience. The effort of the MF scheme is to give the maximum return to the investor. One point to note is that if share market goes down then the MF unit value (known as NAV) also goes down and the MF investors suffer a loss.

    Another type of investment is bonds, company deposits, PSU bonds, Govt bonds etc. Many of these also quote in the market and many times are available at a price at which one can buy them and later sell when there is rise in their prices or cash them at their maturity. Non taxable bonds issued by PSU are a popular option in this segment. Many traders go for Govt bonds also. This segment is generally targeted by the bulk investors who have a long time goal of making an average return with less risk involved.

    The last thing that I want to mention is that there are daily level fluctuations in the share market and traders take advantage of every opportunity of making money out of it but everyone does not success as the calculations might go wrong at times and that is why it is called a high risk area. In such cases sometimes gains could be high but other times losses will also be high. So, one has to tread carefully and should take wise and prudent steps to safeguard ones investment. There is no magic to make quick money in the share market and hurried attempts would prove disastrous. It is a meticulous game of study, speculation, and patience.

    Knowledge is power.

  • For anyone who reads and hears stories of wealth earned from share market, it is a dream and aspiration to earn money daily from share market. Though theoretically it is possible, practically it is not so easy.

    While there are millions who participate in share market(stock market) only very less number of people make sufficient amount of money from this. Stock market has its own temptations and risks.So one needs reasonable awareness and financial discipline before entering the share market. Just as in any field one should have caution, control and prudence in participating in stock market.

    There are mainly two types of people who participate in stock market- Investor and trader.

    Investor is one who buys good company share and keeping it for longtime. His aim is the periodical dividend the company may pay to the shareholders or and/or the higher selling price the share may fetch when he sells it after a few years.
    Trader is one who buys share and sells it same day or in a few days. So it is the trader who may be able to earn income daily(theoretically).Practically he may stand to lose also.
    Usually a beginner is to start as investor and slowly move to trading after gaining some experience and knowledge.

    The simple expectation of anyone who comes to stock trading is profit by buying a share and then selling it at a higher price than cost. This is very well possible if the prices go on increasing only. But practically prices fluctuate or are volatile. In the same day they may go up and come down many times. Hence a correct prediction may not be possible about price movement. We may be buying at a price and b the time we sell, the price would have fallen down, giving us a loss.

    Moreover in stock market, whether buying or selling it entails charges. There are statutory charges as well as the broker's or agent's charges. So one has to know all these correctly to arrive at buying cost and selling cost .

    MY suggestion to a beginner to stock markets is: Decide and earmark a small amount, which you can afford to risk or lose, for starting. After that you should open a Demat account with a popular and established brokerage. Before finalising which brokerage or agency, one should read carefully all the information about facilities and charges. You may get all your doubts also clarified. In some cities and towns there are sub-brokers near your place. You can contact them as they are relatively less busy and locally available.

    After opening a Demat account one may buy just one or two shares of an actively traded company whose share is affordable to you. You need not spend the full amount first. Spend only a part of your earmarked amount on one or two shares. Then follow the stock price movement for a few days and sell it when price is going high and if you will get a small net profit after all the charges also. Doing similarly for a few times with very small risk amount, you may get some first hand experience and knowledge. You can buy or sell even a single share through demat account. Slowly based on your experience you can increase your transactions and amount by and by as per confidence and experience.

    Before opening demat account, just for one or to days during market hours, open the NSE or BSE website and search for the price movements of some known companies. There are a lot of information available there. Then decide and open demat account and do the transactions cautiously and carefully. One should not become greedy and should stick to realistic boundaries.

    Read the news and information coming in a couple financial websites about stock market dealings. SEBI is giving various advertisements and awareness campaigns to make people aware of the risks associated with stock market trading. Read them too.

  • Many investors are interested to generate income from the share trading with their regular exposure in the share trading. We can witness numerous financiers playing in the market each day with the expectations of huge gains by by way of their investments.
    Stock trading involves risks where there might be erosion of our investments if a careful planning is not made. However, with the recurring research studies apart from our understanding the strategies of the companies of the different parameters, we can generate income regularly.
    The following inputs would be helpful to generate money from the share trading-
    1) Study of the Market Pattern- Research - study of the market pattern is required. We need to study closely regarding the market fads coupled with resources where we can remain present on breaking the information.
    2) Opening an account- Prior to investment, open an account with some website such asmoneycontrol.com, economictimes.com or any other known websites which is known to you for its reliable service.
    3) Be careful to the charges - Sometimes there are hidden charges not indicated in the prospectus and hence a careful study is required to know all the relevant charges to be paid so as to book a share.
    4) Track the performance of the share for the last one year - While coming close to the market, we will have to focus on such areas where some shares are regularly showing their consistent improved performances. Select a few such trades.
    5) Be familiar with the health the share in which we want to remain invested - We will have to go inside the business activities of such shares on which we want to invest. We would also be interested to know its production- pattern, the health of the company in terms of its profits, its further expansions etc.
    6) Analyse the candlestick pattern- We should have a good on the candlestick analysis especially for 1 day, 30 minutes, 15 minutes, 05 minutes etc for your better returns on your selected shares.

  • Share investment is a risky business, and trading for daily profits is more so. Do not venture into investments in shares without making sufficient preparation. For a start, investments in mutual funds would be advisable. As for earning daily profits, first, become a client of an approved broker of a stock exchange, and then start trading, after depositing margin money. Utilize the price fluctuations during daily trading hours.
    Day-trading profit or loss means, the difference between the buying and selling prices. But this operation is highly adventurous, and a proper method of trading is necessary. Otherwise, losses will mount. Go for a successful strategy.

  • the share market is controlled by many factors that are both domestic and international. These factors are not in anyone's control. It is highly difficult to have a good understanding of the daily movement of the market. That is why even experienced traders plan for earning a fixed amount in a month, instead of daily targets. So I suggest you practise virtual trading initially and once you are accustomed to that, you can go for actual trading.
    Intraday trading is one of the options available for earning some amount daily. People buy and sell stocks within a day in this trading. In this stocks are not purchased for investment but for making profits, It will be done by taking the advantage of variations in the rate in a day. In this trading, one has to follow the following points.
    1. One should study the movement of shares and the share that is getting markets in higher quantities are to be observed. One should study the market carefully and select a few companies whose shares are getting marketed in higher volumes.
    2. Never be very greedy and never fear. As an intraday trader, you should not wait for a very high profit and at the same time, you should not have fear purchasing at a particular cost. Decide on the limits and stick to them.
    3, Entry and Exit Points are to be kept fixed. Before purchasing the stock you should determine the entry point and the target price. The target price will be the price at which it is valued after making a study of the history of that particular share in the market. Once this target price is known you can understand when to purchase and when to dispose of the shares.
    4. One should use a stop-loss order. You decide on purchasing a particular share. After purchasing suddenly you see that the rate is coming down. In such a case this will come in handy. For example, you purchased a share ar Rs.500/-. But you observe the rate is decreasing. You should set an auto option so that when the price comes to particular figures your shares will get sold automatically. Generally, beginners will go for 1% or 2% loss only. So if the price of the share comes Rs.495/- it will get sold so that your loss will be Rs5/- only for a share.
    5. One should follow the trend. When you are doing the trading observe and see which are the stocks that are being purchased in more quantities and which are the shares that are being sold. This trend if you can observe and follow profit can be ensured.
    Once you follow the above points and trade you will end up with profits. But you should not get to the business immediately. First, decide on some shares. Study the rate ups and downs of them for a minimum of 15 days. Then you will get some understanding. Start with a minimum amount and study. Once you are confident you can go for volumes. But never be greedy. Fix on target price and use a stop-loss order. They are very important.
    There are many other ways to invest money but in all these investments you may not be able to get profits daily. Mutual funds, fixed deposits, recurring deposits, government bonds are some of the ways to invest.

    drrao
    always confident


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