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Friday, January 29, 2010

Make your earning with stock exchange

Understanding and learning makes you the master of any work you are on. A friend of mine whom i happen to meet coincidentally has shared a couple of ideas how we can earn through share market. It was a great experience talking with him regarding the stock market. During his early years he was jobless and used to sit back at home most of the times working on net, watching television cartoon, playing video games etc. But today he was well settled and is happy enough. He had tough times though but now he is well established. And this is all because of the share market.

In finance a share is meant by a unit of account for various financial instruments like stocks, mutual funds etc. A share is issued by a company and can be purchased at a stock market and it entitles its holder to be one of the owners of the company. It is little complex in nature. By owning a share you can earn a portion and selling share which you get as a capital gain. If we learn or understand it clearly about the concept o share trading then we can earn sitting back at home. But provided that we need to watch carefully the recent developments and changes in the market. Because this type of market are keen to fluctuate time and again.

In simple terms, in share market the companies issues shares to public or customers in a fixed rate. So people dealing with this type of market understands what type of share is going to make money or which ones will go high in price. Thus according to that the customer he sell those shares in the market once the price of that share goes higher. In this way we can make an earning.

So in order to make money from stock exchange certain guidelines should be followed. It is more than just buying low and selling high. Not every participant in the share market is a winner all the time but only a patience, the prepared and somewhat lucky will always be rewarded. So some of the instructions to be followed are the following:

1.) Homework: It is very important to discuss and make research about the company, from which you are going to purchase units of shares. Avoidance of this may lead you to loss and difficulties.

2.) Simulation: The execution of the real trade is an important instruction. It is always an excellent way to gain some practical experience trading without risking actual capital.

3.) Profits: The ultimate aim is to make money, so it is wise to make a healthy dealings. It is better understood when we sell off the stocks and gain profit.

4.) Diversify: It is one of the good mantra that we should not only buy one sector's unit rather we should go ahead with different sectors. This will minimize our risk of facing loss. Moreover it increases an odd that on any given day at least some part of portfolio is making a money.

5.) Stages: Always buy the units of shares in stages. Never rush. Go along with the market proceedings, never get worried if the market price rises. It is wise to purchase in stages and slowly and this will moreover reduces the risk.

Thus with the help of stock market trading and with little effort we can earn a lot. The main job is to watch the market or various sectors proceedings. And now i have made my mind to engage with this market and to invest in it. What about you?

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