How to Invest in Share Market, How To Buy and Sell Shares

Now, we all are almost aware of share, share-market, how it works and types of trading, etc. in detail. So coming toward the forward part of share-market.

In this article, we’ll understand How to Invest in Shares and How to Buy and Sell Shares in stock market.

Here we’ll also explain in detail, How and when to Buy the shares and how to sell them at right moment, What documents are required to open Demat Account, How to buy shares online, etc.

So, Let’s dig into the process of understanding How to Invest in Shares….

How to Invest in Share Market, How To Buy and Sell Shares

Table Of Contents

What are Stock Exchanges

We can buy the shares either from NSE or BSE Stock Exchange. These are one of the most reliable stock exchanges around the world. In this, only those companies can enroll whose annual turnover in over ₹25 Crores[$3 million].

If you invest in any such company which is enrolled in either NSE or BSE then, there is very less chance of getting bank corrupt overnight. Such companies are wealthy and reliable enough to grow their market again and again.

We usually use Demat Account to buy shares from Stock Exchange. Here we can search, buy, hold and sell shares at our own convenience.

FAQ–> What Is the Meaning of Buying Shares

When a company registers itself with either NSE or BSE and sells its ownership authority to increase investment in company, then that stake is called share.

Whoever buys these shares becomes shareholder of that company. This means he/ she has enough ownership rights to take decisions for the farewell of the company.

How to Buy Shares

Before you invest in share market, you must have a Demat Account to buy shares from stock exchange market. After this, you have to search by typing the name of the company whose share you want to buy. As soon as that share comes in front of you, you can buy the share by placing the order.

But before that, you have to research on company’s share you want to buy. Once you are confident enough, then you have to open your Demat Account, search for the company and buy its shares.

Keep in mind you have to thoroughly check that company’s last 5 years of records (if available), What is the current price of the share, what was its price before, what was the price when the market opened etc. You must check all these before you buy shares of any of the company around the world.

If it is any startup company, then keep in mind you should invest only limited amount. In case, if it fails to grow then you won’t lose much money.

People buy shares to earn profit in many ways. They either buy shares and hold for longer period of time or they simply trade in stock market to earn within minutes. In both methods, you have to buy and sell shares.

To invest in the share market, you have to follow the following steps:

First of all, you have to open a Demat account.
You have to invest money in that account.
Then with the help of that account, you can invest in any stock.

This is not a difficult task. It is very important to have 5 things before you buy shares, after that you can invest in any stock market around the world.

Demat Account: In this, you will buy and sell shares.
Saving Account: From this, you will deposit and withdraw money from your Demat account.
It is mandatory to have PAN Card so that you can open Demat account.
Research Thoroughly about the shares before you invest.
Things to keep in mind: Buy Price, Hold, Target, Stop Loss etc.

If you follow these things, then it is enough for a beginner to start.

Saving Account: When you open your Demat Account, then your saving account is linked with your demat account. So that when you buy shares. Then you can put money in Demat account and when you sell shares, then you can withdraw the profit money and save it in the savings account, so you must have a bank account.

PAN Card: When we do trading or buy and take delivery of shares, then we have to pay tax and it is mandatory to have a PAN card to pay tax.

Demat Account: This account is most important for buying and selling shares. With the help of this account, we place orders in the stock exchange and buy and sell shares.

How to Buy Shares Online

To buy Shares online, you will need a Demat Account. Nowadays, it is very easy to buy shares of any company online. For this, you can use various online platforms such as: Zerodha, Win Trade app, Groww app, OctaFX App, etc.

You can also buy shares with the help of your bank account because many banks allow their customers to buy shares like ICICI Direct, SBI Smart, etc.

Nowadays, every person buys shares online only, but many people buy shares online with the help of a broker or buy them online themselves.

Buy Shares of Which Company

There is a secret formula to choose which company’s stock to buy. These formula are called as LPB & HPS Technique. Here LPB means Low Price Buy and HPS means High Price Sell. With the help of this method, you will not face much difficulties in case of loss.

Rather, you can buy shares of any company by understanding its formula. It could be any IT Company, Pharma Company, Banks etc. Let us understand how this technique works.

In this technique, we see that what is the current status of the shares of the company whose shares we are going to buy and what was its previous record.

For the sake of quotation, we will start with SBI (State Bank of India) stock. Since its just an example so its share price is also an assumption. Kindly don’t take it serious. Its actual price will always be different.

First of all, be aware of the real and current value of SBI bank shares.

Now to know the price of SBI shares, we will open Google and write in it SBI share price, the result will be shown in front of you.

Click here to see SBI share price

At present, the price of SBI is running around Rs 301.00. Today when the market opened, the share price of SBI was Rs 296.00. The highest price of SBI’s share went up to Rs 301.90. The lowest price went down to Rs 292.60.

This clearly shows that there is a very good boom in the market today. How can we say this, because we have done complete analysis on SBI’s share record.

By looking at his past record, which you can also see in google, Stock Exchange, Demat Account. Let us now know how this formula will work for buying shares.

Stock Market Tricks

To buy shares of any company, it is necessary to take risk first.

-: Risk Bone:-

Investment: ₹10,000 [$121]
Formula: (Investment ÷ 2 = Demat Saving – 1,000 = Invest Money)
Example: (Investment ÷ 2 = Demat Saving) 10,000 ÷ 2 = 5,000 Demat Saving
(Demat Saving – 1000 = Invest Money 5,000 – 1,000 = 4,000)
Solution: Demat Saving = 5,000, Invest Money = 4,000 [$48]

First of all, you have to invest in Demat account, after that you have to calculate the investment money.

It will be calculated by, How many shares will you be able to buy with your investment money and then you have to buy that number shares.

Once you buy the shares, you have to wait till their price increases.

To buy shares with invest money, we must first know how many shares we will get from our invest money.

– : Share Calculating Formula:-

Formula: (Invest Money ÷ Share price = shares)
Example: (Invest Money ÷ Share Price = Shares)
(4,000 ÷ 301 = 13.28 Shares)
Total No of Shares = 13

According to this calculation, we have to buy 13 shares of SBI.

Important Note: When you open your Demat account on any broker form then you get X Limit.

With the help of this limit, the money that we put in our Demat account becomes 3 times or 5 times.

Let’s understand with an example.

Demat Account Limit Calculation Formula

-: Demat Account Limit calculation:-

Formula: (Demat saving x 5 times limit)
Example: (Demat Saving x 5 times limit)
(4,000 x 5 = 20,000)

On increasing the limit, let us also calculate the share of SBI that how many shares of Rs 20,000 will be available.

– : Share Calculating Formula:-

Formula: (Invest Money ÷ Share price = shares)
Example: (Invest Money ÷ Share Price = Shares)
(20,000 ÷ 301 = 66.44 Shares)
Total No of Shares = 66

Now you have to buy 66 shares and wait till the price increases.

How shares are bought and sold

There is only one way to buy and sell shares, which is used in the stock exchange, whether you buy or sell shares, you have to use a Demat account for this. Without a Demat account, you can neither buy nor sell shares.

Yes, if you want to do trading only on shares, then you can use Trading Account for this, but in this also you will be able to do Intraday Trading only if you want delivery of shares.

For this, you must have a Demat account.

To learn share market, you should practice more by buying and selling Shares from time to time. You should acquire a good knowledge of stock exchanges like NSE and BSE.

Along with this, you should know when to invest and when to withdraw. With all this, you should also know about Demat accounts, Trading accounts, stop loss.

Once you learn all about these, then you will easily invest in share market. There are already posts written on all these topics mentioned by us, you can read them one by one.

The easy way to buy shares is to use LPB & HPS technique. With the help of this technique, you will be able to buy profit-making shares very easily and when you save them, you will also get a lot of profit on it.

We have explained this technique well in the post, so follow the steps and learn to calculate the formula by yourself so that you can take a quick decision to buy shares.

Rules for Buying Shares

These are tips to avoid losses in the stock market. If you follow them then you will never suffer loss in the share market and you will be able to earn money from the share market comfortably.

Always choose shares with LPB & HPS technique
Target and stop loss must be applied to the stock
Do not trade on the same stock again and again
Do not invest or trade in more than 5 company shares in a day
Do not use more than 20% of Demat account’s credit limit

If you follow all these rules then you will never suffer loss in the stock market.

Earning money from share market is very easy and for that, we just have to learn to invest money in the right place so that with the help of that money, we can buy the right share and then earn good profits.

The minimum amount of shares varies from company to company in the stock market so that you can start investing in shares.

Highest stock Returns

The highest return-giving shares are not fixed but the shares of Bank Nifty, It Company, and Pharma Company give the highest returns.

Hoping, you have completely read the article about How to invest in share market and How to buy and sell shares in detail.

If you liked the information given by us, do tell us. if you have any queries in your mind, you can freely ask us by commenting below.

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