How to practice buying/selling shares in live market.

If you are an online investor, you need to study how to buy and sell stocks from your remote terminal. Apart from that, your online trading platform is a powerful tool and has a lot to offer. You can customize your trading screen , do technical analysis, transfer funds from your bank account to your share trading account, know your exact cash position, check the profit or loss you made – year wise or scrip wise etc. Further, there are shortcuts using mouse and shortcut keys.  But how will you study all this unless you participate in a few trading sessions?

PRACTICE WITH LOW PRICED SHARES

The best way is – open a share trading account with a nominal amount and start buying and selling low priced stocks. They are also called ‘Penny stocks’ in the international market. These stocks which sell for, say, less than a rupee are a best way to start learning practical trading. It does not involve large amounts of money, and you can avoid very high risk at initial stages. Even if you lose, you lose a very small amount.

ADVANTAGE

You can master the method of using your online trading terminal and all it’s features. You also get first hand experience on live technical charts. This is no simple step to be ignored, especially beginners.For example shares of waterbase (code: BSE 523660) are available for less than Rs 5. Learn to buy and sell with 1 or 2 shares, it not going to cost you more than Rs 10 per transaction! The whole cost of mastering your trading screen should be less than Rs 200 ! It’s worth … and it works !

DO NOT TAKE IT AS A SERIOUS BUSINESS

I recommend buying and selling low priced shares only for the purpose of practice. There is a certain section of investors who keep investing in such stocks seriously, trying to make huge returns from such small extremely risky investments.

The disadvantage of investing in low priced shares is that in most of the cases, their fundamentals will be nothing much to talk about.

Secondly, they can have a very thin margin of exchange. This means that when you are looking for a way to sell your stock; you might not be able to find a buyer at its current price. The reason for this stems from the fact that there are usually very low volumes of exchange for many such stocks. Hence, when you need your cash and thus when you try to exit these stocks; you might not be able to find a buyer who is willing to buy at the current price. You may have to lower your price considerably, so that you can sell your stocks and get your cash.

Finally, you can be a victim of a biased recommendation as most of these low priced stock companies will try to influence the investors by using different channels of the media and especially the Internet. In the Internet, you can receive falsely constructed information about such stocks, but in reality you will be losing money since the information will not be true.

Bye for now, have a nice day !

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  1. Buying & Selling shares
  2. Benefits of owning shares
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1 Response to “How to practice buying/selling shares in live market.”

vineet

February 7, 2013 at 12:29 am

hello sir
i m gain more knowledge how to practice in share market if any sites and how 2 gain money and investment in share market

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