You heard it right! Through this article, you are going to Learn Trading for Free. Stock market trading can be confusing, right? You’ve got things like trading strategies,position-sizing, risk management, and many more.
But through this article, I am going to tell you the stepwise process to learn trading. So without any further delay, let’s get started!
This is the 1st and most important thing you should understand before entering into the field of trading. Stock is the general term that is used to describe the ownership of the company. Stocks can be bought and sold on exchanges through a broker. Owning the stock of a particular company gives you the right to vote in the shareholder’s meeting, get the dividend when and if it is declared.
If you want to learn more about the stock market then you can check out our blog “What is the stock market & How it works” where we have explained everything in detail about the stock market. Once you understand How the Stock Market Works & all the rules of the market, then you can move ahead to the next step.
Once you complete the first step, then you can go ahead with the study of indices. Having a deep understanding of stock market indices is very much important in trading. A Stock Market Index is a collection of different stocks which fall within a certain category or have certain similar characteristics.
There are different types of Stock Market Indices such as Sectoral Indices which represent the stocks of particular sectors, Volatility Indices which represent the relative volatility in the market, etc. Stock Market Indices are used to analyse the overall performance of the market. To learn more about the stock market indices, you can check out our blog “All about Stock Market Indices.”
Once you understand the rule of trading, now it is time to trade with small capital. When it comes to investing or trading in the stock market, the first question that comes to our mind is- How to Open a Demat Account? For trading in the stock market, Demat and Trading Account are necessary. A Demat Account is nothing but a dematerialized account used to store financial securities such as stocks, bonds, etc. in electronic form.
The account that you open with the broker for buying and selling securities is called a Trading Account. If you want to know more about Demat & Trading account then you can check out our blog on “How to open a Demat account” where we have explained to you in brief.
After opening your account, you can move ahead with the next step. Having a basic understanding of sectors is very much important in trading. There are various sectors in the stock market. A Sector is a group of companies that performs similar business operations.
For example, let us consider the IT sector, this sector includes companies that make software or companies that provide Internet-related services. TCS, Infosys, Wipro, etc. are the top IT companies that belong to the IT sector.
To understand the Top 10 Sectors of the Indian Stock Market you can check out our blog on “Sectors in the stock market.”
Once you learn all the basic things it is important to Learn Technical Analysis for profitable trading. Technical Analysis is a vast topic in trading. If you master Technical Analysis then your chances of getting a trading edge increase sharply.
Technical Analysis is the way through which you can understand the behaviour of the market by analysing charts. Generally, we analyse the behaviour of the market with the help of chart patterns. A chart pattern is nothing but a representation of historical data in a systematic way on the charts.
Generally, technical analysis is considered a very big & hard topic to explain. But through Beginner’s Guide to the stock market | Module 6 | Basics of Technical Analysis Explained in 3 simple steps you can understand the basics of technical analysis in a very simple way.
After understanding the Technical Analysis you can move ahead with Candlesticks. Candlesticks are the most important aspect of Technical Analysis. Candlestick is a method of representing the information on the charts. Candlestick represents Four Important Parts of the Price, and that is ‘OHLC‘.
Full-form of OHLC is-
O – Open
Basically, there are 2 Types of Candlesticks-
In Green Candlestick, the closing price of the stock is greater than its opening price & In Red Candlestick, the opening price of the candle is more than the closing price. To learn more in detail, please visit Beginner’s Guide to the Stock Market | Module 7 | 4 Important Things to Know About Candlesticks.
It is important to know that Support and Resistances can be used in different ways, such as they can be used to determine the reversal of the trends, or they can be used to determine potential targets, stop-losses, etc. Also, there are different types of Support and Resistance. If you want to know more about this topic, you can check out our article on “Understanding support and resistance in 5 simple steps.”
Reading charts is a skill, and it will develop with practice. There is no specific way through which you can master the skill of chart reading except practice. You have to practice regularly in order to develop your chart reading skills. To simplify this concept and give you the exact process of mastering the skill of chart reading we have made a blog named How to Read the Stock Charts Explained in 3 Simple Ways.
Once you learn the Technical Analysis and Support and Resistance it is important to learn multiple timeframe analysis. Often many traders ask me how to do the multiple time frame analysis. Multiple time frames are a very big and interesting topic to speak on. When it comes to trading, multiple time frame analysis plays a significant role because through multiple time frames analysis, we can understand trends much better.
Through “Beginner’s Guide to The Stock Market| Module 10| Importance of Multiple Time Frames” we have explained to you the right way to do the multiple timeframe analysis.
Understanding and mastering the chart patterns is the most important thing in profitable trading. There are numerous chart patterns present in the world, but you don’t have to master all of them, mastering a few technical chart patterns can make you a profitable trader. To know about the 8 Most Important Chart Patterns in Technical Analysis you can check out our blog on 8 Chart Patterns that Every Trader Needs to Know.
Indicators and Oscillators are used to determine the direction of the trend. They play a very important role in analysing the markets as each indicator and oscillator gives us important information regarding price, volume, momentum, etc. Hence, it is important to study the different oscillators and indicators in order to improve your technical skills.
To know more about Indicators & Oscillators & their working, you can check out our blog on “What are indicators & Oscillators”.
Once you know everything regarding technical analysis, now it’s time to learn some of the important concepts in trading. Leverage is nothing but an interest-free loan offered by your broker to trade with heavy positions in the market. People say ” Leverage thrills but it kills!” but if you use leverage smartly with proper risk management and position sizing, then you will get that additional edge over others.
To know more about leverage and how you should use it effectively, you can check out our blog on “What is leverage in trading,” where we have explained to you everything about leverage from scratch.
Here comes the most important part of trading and that is “Risk Management.” Without mastering this topic, you can’t become a profitable trader irrespective of how good you are at technical analysis or chart reading.
Generally, when new traders enter the market, they are always in search of that one strategy that will make them tons of money, but we all know there is no such strategy. According to my observation, most traders focus on technical analysis or strategy, and very little attention is given to risk management and capital allocation. If you want to know in detail about risk management & how to control the risk of your capital then you should definitely check out our latest article on Risk Management where we have explained to you the importance of risk management through different examples & also discussed beginner’s approach to entering the market & controlling the risk.
These are the simple steps you can follow to learn & become a professional in trading. I hope that, through this article, you found your Step-by-Step Guide to Learn Trading. If you have any doubts regarding any concept, then please post them in the comment section. I will be more than happy to solve them!
If you want to know more about Risk Management & Intraday Trading Strategies you can refer to our previous blog on