Friday, 30 May 2014

How to make profit in stock market

Stock Market neither a game nor it is a sweepstakes where you would instantly earn loads of money. It also doesn't mean, if you know everything about stock market and you will always win.  Considerably there are only three thumb rules in stock market. Below thumb rules will always land you in profit side in stock market.  But all in all you only require two things, patience and time in stock market or stock exchange. 

1.      Buy when stock is low and Sell when High: This is plain and simple logic that even a school boy can understand. Buy stocks of a company only when their rates are low and sell stock when price goes up. For example, Union Bank of India started with stock value of Rs16 and currently stock rates are going near Rs200. But in two months ago Union Bank of India stock's rates were around Rs90-Rs100 but some year’s back they were boosting to above Rs300. Union Bank of India entered stock market with face value of Rs16. So since it has already crossed stock value Rs300 per share last year, Rs100 can definitely considered as low with current stock market rates. So it’s always good chance to buy them at such rates which are below half value of their highest value in previous years. BseIndia.com and moneycontrol.com provides all history records. Hence anyone can go to their site and look up for highest and lowest stock rates. 
Once stocks prices goes up, just sell it. Don't lurk for large profit. You could buy 10 shares and earn more profit rather than chasing profit on single stock.

2.    Buy Good company shares only: You should only buy the stocks of company which are rates A and B grade. Stock exchange provides a rating for every company based on their performance in market. Always buy stocks of good company. For this you can go to Bseindia.com website and check for A rates companies. Most of them will have higher stock rates. So if you are willing to buy NOT SO FAMOUS company’s rates, then you can go to respective company’s website and check their last quarter performance. As per ISO standards, every registered company has to provide their company performance reports and you can dig such company’s websites for information on their performance. Don’t buy shares of companies which are recently entered into stock market or companies never heard. Companies like Ashok Leyland are top companies but they have low share values than Union Bank of India. So buying such company’s shares are always safe.

3.   Never buy stocks when stock market is sinking: This is again very simple logic that you can implement in stock market.  During storm, Will you stand out of your house during or inside the house? Never put your money or buy any shares if stock market is in continuous fall. If you will, you will always fail. Hold your shares and sell only when stock rises.


With above simple rules in stock market, you will always earn profit. Please try to understand, stock market never produce money. In stock market, money just get transferred from one man’s pocket to another. So have some patience’s after you buy stocks and sell them only when price goes up than your purchase value.




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