Financial freedom has remained to be a vague concept for most of us: we all want it without properly understanding what it means and what it has to offer. Even before we can think of it in real terms, we are encumbered with the burden of debt from housing and education. As a result, we have to slog for almost all waking hours so that we don’t eventually drown in the waves of debt.
Trading as a means of fulfilling your dreams
How familiar are you with the term trading? Almost all of us have indulged in trading without realizing that we are doing it. Stocks can be a way of improving your financial condition when executed in the right way. It also involves understanding and taking part in the ups and downs of the international stock market.
Basic Ways of Trading
There are two means of trading on stocks: trading on the exchange floor and electronic trading. The Bombay Stock Exchange has been so brilliantly depicted in many Hindi films that most people have a faint idea of how the system works. But for those who don’t know about it, in this method of trading, the trader and the broker agree on the price for the completion of the trade deal. It takes no more than a few minutes depending on the market situation and the trader will receive the confirmation mail.
On the other hand, electronic trading uses functions on enormous computer networks for matching traders and brokers and is much more reliable and faster than manual trading. But it is important to mention that a stockbroker is still needed for handling the trade-in stock as individuals cannot easily access the information of electronic markets.
Making a viable plan for investment
Now comes the most important aspect of trading on stocks. How much money can be made by trading stocks? Actually, there is no limit on the amount of money that can be made through trading stocks. The Indian stock market is one of the greatest liquidity markets for people to earn almost any amount of money, but there is a chance of loss too. But when you are a skilled trader, it is not impossible to make one lakh rupees in a day with a 1 percent investment.
It is advised to do thorough market research of the company where you want to invest. Market research refers to past balance sheets along with a statement of income, short and long-term earnings, and the previous performances of the company in terms of profit and loss.
It is crucial to set up a proper investment strategy on the basis of your financial goal as well as the level of risk you are willing to take. Then, you will have to determine how much you can invest in a specific company. This is an important step in limiting the losses you will have to bear when the situation turns worse. With the right knowledge and information, you will be able to determine your future growth in trading stocks.
