Hello Reader
Hope you all are doing fine.
The stock market is a device to transfer money from the
impatient to the patient.
-Warren Buffet
This one is one of the topics which excites me to discuss.
I thought about sharing some epiphanies of the stock market, I
will try to make this as less boring as possible. Also, I would like to make it
clear this is my opinion and it is realistic. disagreements and discussions are
welcome!
Okay, let us start with a fun fact now Indian stock markets are
considered the most expensive ones to trade.
Why do analysts say that? If you look at bigger markets like
NASDAQ or the London stock exchange, they have a lot of options to fund a
trader like, they believe in collateral management, extensive margins.
But in India, as the years of passed by the securities exchange
board of India (SEBI) has brought a ton of rules curtailing the margins that
can be given to traders from sub-brokers: the reason being they want to flush
out all the small fish from the tank and only keep the big trading bulls and bears
in the ring!
Starting September 2021, the futures and options market must be
traded with a 100% margin which means all cash. The channel partner licenses
are no more given to new entrants. (Channel partners are people who register
with SEBI who are allowed to pump in the margin to traders who can't afford the
whole value of the trade)
Critics of YouTube like MR. P.R Sundar, Vikram Prabhu who
believe and earn huge in option selling have commented saying indeed Indian
stock market is the most expensive one for trading.
SEBI justifies this by saying they implemented the zero-margin
rule to protect investors money and safety collectively called investor
protection.
So now the question is can we do not trade anymore? when I say
trade I mean intraday trading, Of course, you can have two ways to do it either
load your DEMAT with the amount required to trade or build your capital by
investing in shares which can be pledged
to pledge this as collateral and can get
margin incase you want to start trading.
Losses and Emotions:
After throwing some light on the current situation, let us
understand what the right thing is to do in my opinion.
How to start this journey in the creation of wealth as it is
described by the “gurus” how can you get a stable income or increase annual
gains by investing money in markets?
Some myths that people should strictly remove from their minds:
- The stock market
is not, and I repeat is not gambling.
- You just don’t
lose money if you invest in the market there are no thieves in there who
just steal your money, it's your wrong move.
- There is a clear
distinction between a trader mindset and an investor mindset.
- All traders are
not good investors and vice versa.
- You cannot earn
stable profits by just watching DIY (Do it yourself) videos on the
internet.
- The stock market
is seriously just not just a trend it is an emotion that leads to either a
profit or a loss and it is a field that requires a lot of understanding
and research.
Why I felt the urgent need to write this nonfiction is, I see a
lot of young people who want to enter the markets but are not getting guidance
from people who are well established in markets or anyone for that matter.
Eventually, they get misguided or take their own decisions and
enter sectors of the markets which they are not familiar with for example the
future and options market which is very volatile money and lose their
hard-earned money!
Also, I am seeing some successful people are posting videos on YouTube
luring people to join their training where they make you feel index options
trading or trading in futures is just like eating a pie? it is for them because
they don't show you how they reached it, please realise they posted these
videos after they reached the summit of success! so you are just being made to
watch success stories, so don't you feel the building blocks of this success is
not shown?
Guys imagine we are entering a stock market with a market
capitalization of $3.4055 trillion! the sixth largest in the world and we are
thinking just knowing to taste some small glass of wine makes us official wine
tasters to the queen of England!
Therefore, all we need is a structured approach.
Start your journey with a simple investment in a good and
healthy NIFTY 50 stock do discipline and monthly investments from your primary
source of income, like Mr. Warren Buffet, says "buy and forget and
don't buy a stock if you don't want to hold it!"
This will help you build your capital, also make it possible to
buy some margin by pledging these shares.
Meanwhile, learn the various strategies which are used to trade
do your self-study or enroll yourself for a course, MOST IMPORTANT please do
virtual or paper trading for at-least a quarter before you put your real money
in the market.
Well, I would like to give it a pause there for today, I hope I
could give you some insights which would help you build your portfolio and
start your amazing journey in the market!
All the best to you.
Gold mines do have gold! But do we know how to differentiate
gold and stones in the mine?
-Thomas Fallon
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| Courtesy Google images |
Thanks for your time, have a nice evening.
Helios
