The stock market is one of the best and easiest ways for an individual to multiply their money, but people often tend to overlook the risks associated with it. These risks can be avoided or tackled easily if you know all the ins and outs of the stock market. That is the key to becoming a successful stock investor.
With this blog, we will deep dive into how one can master the art of investing in the stock market. We will discuss various factors, such as where you should start from, the minimum amount you can trade with, etc. Many traders follow a “holy grail” that is a sort of working strategy they can implement to generate abundant wealth from the stock market. However, as you gain experience in this field with time, you will realize that there is no such thing.
Then what is the secret to success in the stock market, and what does it take to become successful in it? Keep reading to find out!
How Do I Become a Stock Investor?
The answer to your previous questions is that there are no shortcuts or secrets to success in any field, including trading and the stock market. There is no specific strategy or shortcut that people can use. If there were one, no one would face failure. But there are some things one can do to increase their likelihood of succeeding and avoiding losses in stock trading.
- Have realistic expectations, i.e., you will rarely get 100% success overnight. Have patience and keep trying.
- Use backtested strategies, even for automated trading, which is one of the best ways to trade stocks, especially for amateurs.
- Keep your emotions in check. Don’t let the high-stakes and volatile nature of the market consume you by fear or greed.
- Do a post-trade analysis regardless of whether you make a profit or incur a loss. Try to understand the reason for whatever happens and make better decisions in the future.
How Should I Start?
If you are new to the stock market and don’t know much about it, we suggest you read our beginner’s guide to the stock market.
Always start with safer stocks since it would be easier to deal with the situation even if you fail. Initially, a big capital loss can bring your confidence down. Hence, we suggest that you should start with the less volatile stocks. You may start slow, but those stocks are more likely to sustain a good performance even in the worse conditions.
Moreover, share market investments can be tricky. Hence, you should take the first step to trade success by opening a Demat account. Then, you need to work on developing adequate knowledge of the stock market that will help you to work against the odds and emerge out as a winner, beating stock market volatility.
How Much Does a Stock Investor Make in a Year?
In India, you can earn anything from Rs. 100 to 10,000 or even Rs 20,000 in some cases in a day via intraday trading. But what you make depends on how much risk you are willing to take. You may lose it all or make a huge profit — it’s uncertain.
Similarly, the salaries of Stock Investors in the United States range from $21,025 (Rs. 15,49668) to $560,998 (Rs. 41,348918). The median salary is $100,799 (Rs. 7429491). But that is for professional traders who trade on behalf of others. The figures would differ in personal trading.
What Percentage of Stock Investors Are Successful?
For nearly the last century, the average stock market return is about 10% per year. We consider the S&P 500 index as the benchmark measure for annual stock market returns. The average stock market return is 10% but the returns in any given year are not the same.
Can You Day Trade With Rs. 1,000?
Yes, you can. If you set up an account with Rs. 1,000, you will see that some brokers are ready to give you a minimum of four times leverage. It means that you can day trade with Rs. 4,000. Not only this, some of them will even give you up to six times.
It is always a good idea to start slow when investing in stocks. People can create a good portfolio even if they invest as little as Rs. 1000 per month — the amount doesn’t matter. Some costlier stocks will be out of your reach, but there will be a huge market of stocks priced lower than your investment.
What Happens to the Money in the Bank When the Stock Market Crashes?
The price of the shares drops 75% due to a stock market crash. For instance, let’s assume that an investor buys 1,000 shares in a company for a total of Rs. 1,000. Now, if the market crashes, the investor’s position falls from 1,000 shares worth Rs. 1,000 to 1,000 shares worth Rs. 250. The net loss will be Rs. 750.
The stock market is full of risks, and it is not for everyone. Those who are ready to face the losses along with the profits shall put their foot into it. We hope this blog simplifies your journey to becoming a successful stock investor. Here is our checklist for the stock market to help you further.