How to Earn Money From Trading: Stock market is one of the most lucrative ways to make money, as it provides better returns. But considering the risk associated with the stock market, many people are afraid to invest in it.
If this question is also in your mind, how to earn 1000 rupees per day from stock market? Although it is not as easy as it sounds, especially for newbies. Many people fail to do so due to lack of knowledge and experience related to it.
How to Earn Money from Trading?
Everyone comes to the stock market with the hope of earning money. It is considered as the most lucrative money making method as it provides better returns as compared to other financial avenues. Trading is nothing but a strategy based art. Some may consider it a gambling game, but for others it is a great source of income.
Some important things to earn money from share market
- Investment (minimum Rs.10,000)
- Internet connection (Desktop or Mobile data)
- a trading account
- Share Market Knowledge
The more capital you invest, the easier it will be to make 1000 rupees daily. Usually for this return Rs. Should start with a capital of 30,000. Intraday Trading For intraday trading, the broker gives you a ‘Leverage’ of 3x.
Create Trading Account
To start stock trading, you need to open a trading and demart account with a stock broker. Which you can open digitally online nowadays without submitting any physical document. There are many discount-broker company in India like Zerodha, Upstox, Angelone etc.
But I suggest you to open a free account on Groww.
- Zero maintenance charge
- Simple design and user interface
- Trading platform with charts and tools
- Hassle free and paperless account
Documents required to open an account
- Bank Account
- PAN Card
- Aadhaar Card (Linked mobile number)
- Or Voter ID/ Driving License
- Age must be more than 18 years to open Demat account
Creating an account on Groww is very easy. You just have to follow the given instruction. Which has been told in the video below.
Where to Learn About Trading?
You cannot do anything without knowledge and your money is being spent in trading. Therefore, before investing in the stock market, it is important for you to have complete knowledge about it.
There are both free and paid ways to learn online trading, through which you can easily learn it sitting at home. Especially in YouTube there are many such channels, where professional people give you a lot of trading information.
Apart from these, from many channels where you will get information about trading. Along with this, their paid courses also come, through which you will get to know many tips and tricks related to trading. If you want, you can also do trading courses on Udemy, where you will get information from basic to advanced level.
If you are new to trading, then you must watch the video below, which will give you basic, detailed information on the stock market and trading.
Different ways to Earn in Stock Market in India
1. Intraday Stock Trading
As the name suggests, stocks are bought and sold on the same day on intraday trading, without holding a position overnight. That is, you can buy or sell one or more stocks between 9:15 am to 3:30 pm on the day of trading.
Intraday trading is also known as day trading. The share price fluctuates throughout the day and intraday traders try to take advantage of it by buying and selling shares.
Example: Suppose a stock opens trade at Rs.500 in the morning. Soon it climbs to 520 in an hour or two. If you had bought 100 stocks in the morning and sold them for Rs.520, you would have made a profit of 2000.
- Here traders can make profit based on the movement of the market price of the shares.
- Trader can avoid delivery charges.
- You can buy shares in it for 3 times more than the current fee.
- If you do not close the trade on time, it is automatically squared off.
Note: In intraday trading, not only from rising stocks, you can also earn money by short selling from falling stocks.
2. Futures & Options
Option trading is a form of contract in which the buyer of an option has the right to exercise his option at a specified price within a limited period of time. Option buyers are charged a “premium” amount by the sellers for such rights.
Option Trading is of two types, one is Call and Put. If you are thinking that the share price will increase then you buy the call. Similarly, buy Put only when you think that the share price will decrease.
Futures and options have an expiry date and a minimum ‘lot size’. There are two types of Expiry here, one is in the week and the month. There is an expiry of NIFTY 50 and Bank NIFTY only on every Thursday in the week and the last Thursday of the month is the expiry.
Example: If you want to buy Reliance future, you will have the option to buy for different expiry dates and months. Reliance Futures has a lot size of 600 shares. So, if you buy Reliance Futures and the price goes up by Re 1, you will earn Rs.505.
If you want to do option trading, then you have to study about it in detail. I suggest you to start with just stoke trading first.
3. Long Term Trading
If you buy a share but do not sell it on the same trading day, it is called delivery trading. You can keep it for as long as you want for a few days, months or even years before selling it. You will continue to own the stock.
In long term trading, investors consider the long term price movement of shares to book profits instead of price movements within the day.
For long term investments, investors should analyze the fundamentals of the stock. The fundamentals include various parameters, including earnings growth, stability, relative strength in the industry, debt-equity ratio, P/E ratio, management and dividend of the stock.
Success story: In 2002-03, Rakesh Jhunjhunwala bought the share of ‘Titan Company Limited’ at an average price of Rs.3 and currently it is trading at a price of Rs.2160. He has more than 4.2 crore shares of Titan Company.
4. Swing Trading
Swing trading is a style that attempts to make short to medium term profits in a stock over a period of a few days to several weeks.
Traders use technical analysis to spot stocks with high price momentum in a short period of time. These traders are not interested in the fundamentals or intrinsic value of stocks, but rather their price trends and patterns.
Even a person with a full time job in swing trading can trade part-time consistently well. You will not be able to earn 1000 rupees per day with swing trading, but if your business is right, then you will definitely be able to earn your target profit after a few days.
10 Rules of Trading You Must Follow
- Never trade with borrowed money.
- Do not put your money in the trading account which you may need in a few days or months.
- Don’t be greedy, it’s better to earn less money than lose a big one.
- Trading You can win only if you survive. Don’t lose all your money in the first month itself.
- Don’t follow the suggestions of others but learn to make your own strategy.
- Do not use up your entire capital in one trade.
- Do not trade against the trend. Do not short a stock that is going up or buy a stock that is going down.
- If you have achieved your profit for the day, stop trading.
- If you make a loss in the trade, then take a break for some time. Don’t have a loss mindset.
- If you start losing sleep because of trading, take a step back and reflect.
Many people do trading full time and some people do part time. It depends on you what kind of trade you want to do. Due to financial risk, you should invest in it only with complete knowledge. How to Earn Money From Trading (How to Make Money From Trading)
Hope you have got information about how to earn money from trading through this article. If you have any question related to this then you can definitely ask me in comment.