How to Buy and Sell Shares | Part 3 | Stock Market for Beginners

See, if you are like me then you think about

earning money all the time.

So that you can get a good education,

secure your family's future

and also save enough money to travel, enjoy life.

And I am guessing that is why you are interested in the Stock Market.

But the problem is,

whenever you go to any financial expert, they will give you

the same advice that they will give 30 other people

without understanding what are your specific requirements.

So you can listen to all the experts

but the only person you need to trust for

Stock Market advice

And here's the best part...

learning it is not rocket science

and today I am going to tell you where you need to start.

So Ladies and Gentlemen, welcome to Part 3 of

Stock Market for Beginners.

If you have not watched Part 1 and Part 2 on my channel,

please watch them first otherwise

a few things in this video might go over your head.

But in case you've watched them already, then

what are you waiting for?

In today's video we are going to discuss,

How to make the best Stock Market decisions?

Step-by-Step procedure on how to buy your first share using KITE.

But most importantly, towards the end, I'll give you a Bonus Tip

so that you don't make the same mistakes that beginners make in the Stock Market.

But before that, if you like my work

make sure you hit that 'Like' button

because it tells me that I should make the next video soon.

Let's begin.

In order to make the best Stock Market decisions,

you need to do two things.

#1: Stay Updated

The best Stock Market decisions are made by people who are

aware of what is happening around them.

Because local, national and international news have a huge impact

on the Stock Market like

changes in oil and gas prices,

Rupee vs Dollar rate,

Union budget, elections, even any rain related prediction

because most of India's agricultural production depends on the monsoons.

So staying updated with what's happening around you

will help you decide what is the right time

to buy or sell stocks.

Let me give you an example.

After our Director General of Military Operations announced

that surgical strikes happened, it rekindled

war tensions between 2 nations.

Whenever there is negative news like this, it causes a

knee-jerk reaction among people who sell their shares

causing the share prices to go down.

When surgical strikes were announced,

Nifty dropped as much as 2.1 percent.

So everybody who thinks that war is the answer to everything,

...think again.

Because not only does it gravely affect our Jawans who are standing on the border

but it also affects our Indian Economy as a whole.

Nifty recovered later but staying updated with the news

and reaction to that news is crucial especially when

you are involved in intra-day trading.

Now, how to stay updated?

You can read financial newspapers like Economic Times,

magazines like Forbes India.

The more you read, the better sources you will find.

You can also follow me on Instagram because

I keep posting interesting news items on my Insta stories.

To make the best Stock Market decisions, you need to #2 Research about the companies.

See, whenever you go for grocery shopping

before deciding which packet to buy, you check various parameters

like Energy, Carbs, Protein, Fats ..

Similarly, whenever you go for company shopping

you need to check a few things like their

Annual Report, Financial Data, Past performance,

how innovative that company is,

customer satisfaction, what news are they making..

Are they launching a new product?

Doing some merger?

Changing their management?

Or are they in news for some scandals?

These and many other parameters will help you decide

whether a company is doing well or

will it do well in the future?

I know it is sounding complicated but trust me,

the more you analyse companies, the easier it will get.

Let me give you an example.

In the Stock Market, you can even invest your money in a particular sector like

the Pharma Sector, Automotive Sector, Banking Sector etc..

So in the recent months, the Automotive Sector, which includes

companies like TVS Motors, Mahindra and Mahindra, Ashok Leyland etc..

have noticed a huge drop in their sales. So they were hoping

that when our FM Nirmala Sitharaman will announce the Union Budget 2019,

there will be some good news for the auto industry.

But in the Union Budget, there was nothing for them.

Infact, diesel and petrol prices have increased.

Now there are 2 investors.

A and B.

A thinks that the prices of Auto company shares will go further down,

so he decides to sell all of his Auto company shares.

But B notices that our FM has given good news for

Electrical Vehicles (EV)

in the form of GST cut, tax reduction for EV car loans.

So, B does further research to find out

which of the auto companies are making a shift to EV in future.

Let's assume it's Maruti.

So, B checks other parameters of Maruti and her intuition says

that even though Maruti sales prices have dropped for the past few months,

when they will release the electrical Wagon-R, their share prices will go back up again.

So, B decides to buy the shares of Maruti.

Isn't it interesting?

This is just a simple example of how you combine

news with company research and your intuition

to make a decision.

Now, only time will tell whose decision is best.

A or B's.

If B has made the right decision then she is going to make a lot of money in the future.

Making the right decision in the Stock Market comes from

knowledge and experience.

And to gain experience, you need to invest small amounts

to stay in the Stock Market long term so that

you can learn from your success and your failures.

Now, if you want to gain the right knowledge

then I have some courses for you to start with.

As I mentioned in my previous videos, only if you

use the link below in the description and

open an account with Zerodha, then you will receive

these 7 trading and investment educational courses worth Rs. 31,500 for free!

One of these courses also teaches you how to invest in a basket of stocks

depending on your age and your risk taking ability.

So if you think Zerodha is right for you, then

complete your registration and start learning!

Finally, we have arrived at the section you have been waiting for.

For you to understand how to use Zerodha's trading terminal,

today as an example, I am going to buy 1 share of ITC.

You can do this both on your desktop as well as on your mobile phone using the KITE app.

As mentioned in the Part 2 of this video series,

after completing your Zerodha's registration process

you will be sent your KITE login details.

So first, you need to login to KITE by

entering your UserID, Password and Pin.

I am going to show you what a brand new account looks like.

As soon as you login, this is the screen that will be displayed.

On the left hand side, you will find the Market Watch.

This is where you can add the companies that you are interested in following

so that you can Buy, Sell or Query Information about them right from here.

Now because we want to buy ITC, let's first add ITC to our Market Watch

by searching for 'ITC' and clicking on the '+' sign.

This is the last traded price which tells us

how much the stock is trading at, at the very moment.

If you click on the 'Market Depth' button, you will see

these numbers. The 'Open', 'High', 'Low', 'Close' ranges

give you an idea of at what price point the stock opened,

the highest point it was at throughout the day etc..

If you want more clarification about these numbers

I'll tell you what to do in a minute.

Now, our goal is to buy 1 share of ITC

but before we do that, let's add some funds to our account.

I will go to the 'Funds' tab and transfer some

Rs. 1000 to my account here.

You can transfer how much ever amount you want

depending on the shares you want to buy.

After the transfer is complete, let's go back to the dashboard.

Since we want to buy 1 share of ITC, lets click on the

Buy 'B' button next to ITC.

And this order form will appear on the screen.

Here, you will see 'Order Type' which has 4 options.

Market, Limit, StopLoss and StopLoss-Market.

Let's understand what these options are.

You can place a 'Limit' order when you are particular

about the price you want to buy the stock at.

As you can see, the last traded price of ITC is 249.70

But say, I want to buy this share only when it falls to 248.

In such a situation, you can opt for 'Limit' order.

But the problem is, if the price doesn't fall to 248 or below

then you will not get the shares.

But suppose you want to buy the share at

whatever market price it's available at right now,

then select 'Market'.

Right now, the market price is 249.55. But the issue with this is

if you are placing the order and at the same time

the market price also goes up to say, Rs. 252

then you will get ITC at Rs. 252/-

This means, when you place a market order

you can never be sure of at what price you will

undergo a transaction.

CNC, Cash and Carry is for Delivery Trade i.e

if you want to hold the shares for a few days, weeks or years.

And MIS is if you want to trade intra-day i.e if you want to buy and sell on the same day.

So I want to buy one share of ITC,

at Market price and I want to hold it, so I am selecting 'CNC'.

Now I hit 'Buy'.

As soon as you hit buy, your order gets transmitted

to the exchange. You can go to the 'Orders' tab

and check your details in the Order book.

If your order has been executed, the status will say 'Complete'

and now you can see an entry in the 'Trade Book'

which is right below the order book.

So now I officially own 1 share of ITC and this will

remain in my DEMAT account until I decide to sell it.

And that's all it takes.

I would highly recommend that you first read KITE User Manual links

that I have mentioned in the description

so that you understand all the options available

before you buy your first share.

Finally, it is time for the Bonus Tip

but before that, if you want to receive a notification

everytime I make a Career or Spoken English or Finance related video

then on my YouTube channel, make sure you

hit that 'Subscribe' button and click on that 'Bell' icon.

Investment guru, Warren Buffett has said

and nobody else has put it better.

Stock Market is not one big, right or wrong decision.

It is a combination of small decisions (right or wrong)

that will teach you how to identify good companies.

As you saw, both A and B made different decisions

to Buy and Sell.

So who do you think will make the most money?

I'll tell you.

The one who will keep learning

by investing small amounts.

So today's Bonus Tip is this

Start small.

Please don't invest huge amounts on your first day.

Take advices from everybody, experts, stock brokers.

But only you can make the best Stock Market decision

by learning, working hard and gaining experience

which is the only way to generate long-term wealth.

Are you interested in learning more about how to make money?

If yes, then type 'YES' in the comments below or type 'No' so that

I know whether I should make more finance-related videos or not.

On that note, I promise to see you again in the next video

until then, keep fighting The Urban Fight to be Fit!