Guide on Stock Market
                     GUIDE ON 
STOCK 
MARKET
INTRODUCTION
The stock market is a highway 
that leads you to opportunities 
for wealth creation. The share 
market has the potential to 
give you enormous profits. On 
the other hand, volatility is a 
critical part of the share 
market. As an investor or 
trader, you may see profits and 
losses, ups and downs.
Source: www.kotaksecurities.com
WHAT IS STOCK 
TRADING?
Trading typically means buying and 
selling shares in the secondary 
market on the same day. So, it is 
necessary to get an understanding of 
the primary and secondary markets.
Primary market: A primary market is 
where companies issue new securities 
and offer them to the public. So, the 
transaction happens between issuers 
and buyers.
Secondary market: In the secondary 
market, you can buy and sell shares 
that are issued in the primary market.
Source: www.kotaksecurities.com
PROCESS OF STOCK EXCHANGE
OPEN A DEMAT 
ACCOUNT
To enter the share market as a 
trader or investor, you must open 
a demat account or brokerage 
account. 
Without a demat account you 
cannot trade in the stock market. 
The demat account works like a 
bank account where you hold 
money to use for trading. 
The securities you buy are 
maintained electronically in the 
demat account.
Source: www.kotaksecurities.com
UNDERSTAND 
STOCK QUOTES
The price of a stock moves on 
the basis of any news, 
fundamentals, technical 
analysis, and so on. By gaining 
knowledge about these 
aspects, you can enhance your 
knowledge of stocks and stock 
markets. This will help you to 
figure out the right price to 
enter or exit a trade.
Source: www.kotaksecurities.com
FUNDAMENTAL 
AND TECHNICAL 
KNOWLEDGE OF 
STOCK
Study the fundamental and 
technical analyses of the stock to 
plan your trading. Fundamental 
analysis evaluates a security by 
measuring its intrinsic value. It 
considers various dynamics 
including earnings, expenses, 
assets, and liabilities. Meanwhile, 
technical analysis evaluates the 
stock based on the past price 
and volume chart of the stock to 
predict future potential.
Source: www.kotaksecurities.com
LEARN TO STOP 
THE LOSS
Volatility is an implicit 
characteristic of the share 
market. So, it is important for a 
beginner to understand the 
way of preventing heavy loss. 
While executing a trade, you 
need to set a stop loss price to 
minimise the loss. Failure to 
put a stop loss may damage 
your capital heavily.
Source: www.kotaksecurities.com
START WITH 
SAFER STOCKS
A big capital loss in the 
beginning may bring your 
confidence down. A wise choice 
is to start with the less volatile 
stocks. That may give you a 
slow start. But those stocks are 
more likely to sustain a good 
performance even in adverse 
conditions.
Source: www.kotaksecurities.com
THE INVESTMENT PROCESS
INVESTING IN THE 
PRIMARY SHARE 
MARKET
A primary share market 
investment is made through an 
initial public offering (IPO). 
Once all applications for the 
IPO are received and counted 
by the company in 
consideration, the shares are 
allotted to investors based on 
demand and availability.
Source: www.indiainfoline.com
INVESTING IN THE 
SECONDARY 
SHARE MARKET
The secondary share market is where stock 
buying and selling action occurs between 
investors. Follow these steps to invest in the 
secondary share market:
• Open a Demat and trading account using 
your linked banking account.
• Log into that trading account.
• Select the shares that you wish to buy or 
sell.
• Ensure that you have the requisite 
amount of funds in your account to buy 
the shares.
• Next, decide the price at which you want 
to buy or sell a particular share.
• Wait for the buyer or seller to reciprocate 
that request.
Source: www.indiainfoline.com