“Rule No.1: Never lose money. Rule No.2: Never forget rule No.1." - Warren E. Buffett

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Friday, September 28, 2007

kinds of traders

Generally those who do trading are of three kinds.
1.Investors 2.Traders 3.Speculators

Investors are those who are interested in investing their money in share on the assumption that it will be safe and the returns will be high in long run, ie., the investor purchases the share and holds it as assets hoping that his investment will give a capital gain in the long run he will not be interested in indulging in trading as a profession or they are not interested in short term quick income

Traders are those who on the other hand exactly the vice versa of the investors, these people are interested in making profit in the market in short term it may be for few minutes, few hours, or for few days, they always try to profit from the short term gains in the market.

Speculators are those who are ready to take high risks in for a high profit,they will be always prepared to take high risk with respect to anticipating future price movements for high large gains and normally they invest in the highly leveraged investments such as futures and options.

Here, normally an investor will always before investing will see for the track record of the company its product, its balance sheet and so on because their aim is only capital gains,and a trader is not at all worried about the company or its product or its track record but they are interested only technical analysis or charting which relate only to the stock price.

Precautions for trading

Generally those who do trading are of three kinds.
1.Investors 2.Traders 3.Speculators

Investors are those who are interested in investing their money in share on the assumption that it will be safe and the returns will be high in long run, ie., the investor purchases the share and holds it as assets hoping that his investment will give a capital gain in the long run he will not be interested in indulging in trading as a profession or they are not interested in short term quick income

Traders are those who on the other hand exactly the vice versa of the investors, these people are interested in making profit in the market in short term it may be for few minutes, few hours, or for few days, they always try to profit from the short term gains in the market.

Speculators are those who are ready to take high risks in for a high profit,they will be always prepared to take high risk with respect to anticipating future price movements for high large gains and normally they invest in the highly leveraged investments such as futures and options.

Wednesday, September 26, 2007

Share and its requirements

In a nutshell share is nothing but the capital investment or the ownership of the company divided into a number of small parts and that is called share, a person who is holding a part of the share of a company is said to have that part of ownership of the company or that part of investment made by him in the company.
Share market is a place where these kinds of shares are being bought and sold and they are NSE and BSE which almost act as the back bone of the economic of our nation.Now a days the physical presence of a person in the market to trade has gone down a lot due to the massive advancement of internet any person can sit in anyplace in the world and can join trading and do trading.Normally when you want to buy or sell any share which you wish have to place your order through a broker or on their own thro on line trading.whenever a share is purchased that will be sent to the person either in physical or in demat form and now sending in physical is almost nil as it is totally taken over by demat form.
Demat is nothing but the short form of Dematrialization by which a person who bought the shares can get his shares converted into electronic form and that his account of this form will be maintained in the Depositary Participant in other words the DP.
DP's are nothing but those companies or the organisations that are involved themselves in this kind of services , they can be banks, financial institutions and brokers.when any body who ever interested in involving himself in trading or in investment should posses a Demat account and for opening the Demat account he should go to any DP and get himself an account,and it is very simple also, and once a demat account is opened all the investment made by the individual and all the shares on his hold will be shown in his account.So botheration of holding those share certificates personally and physically is being eased out by this .
"As per the extent rules of SEBI to buy and sell shares one must possess a demat account and that is COMPULSARY".
Allmost all the banks are now Dp registered , so you can very well open a Demat account from them, and to open a demat account the following documents are needed:
1.PAN card.
2.Voters ID for identification purpose
3.Ration card for address verification
4.IT returns
some time if you not able to produce 2,3,4 you can produce other documents like passport, driving license, telephone bill, electricity bill, or employee identitycard etc as these will serve the same purposed as stated above, but to open a demat account it is compulsory you should possess a "PAN card".
Once when you open a demat account you will be provided with a BOI number ie.,"Beneficial Owner Identification"number, with which all the transaction by the individual will be done here after.

Monday, September 24, 2007

online trading

Now a days the need for an extra income and the need for the luxury among people had paved way for looking for more no of chances available for earning and the first and foremost of them all seems to be online trading,The market has become more accessible, but that doesn't mean you should take online trading lightly. In this article, we'll look at the different types of online trading accounts, as well as how to choose an online brokerage, make trades and protect yourself from fraud.
Now, plenty of "common" people own stock. Online trading has given anyone who has a computer, enough money to open an account and a reasonably good financial history the ability to invest in the market. You don't have to have a personal broker or a disposable fortune to do it, and most analysts agree that average people trading stock is no longer a sign of impending doom.
Before we could go for a jump start to the diffierent types of online trading aspects it is better for us know about some basics of online trading. let's take a quick look at the basics of the stock market.A share of stock is basically a tiny piece of a corporation. Shareholders -- people who buy stock -- are investing in the future of a company for as long as they own their shares. The price of a share varies according to economic conditions, the performance of the company and investors' attitudes. The first time a company offers its stock for public sale is called an initial public offering (IPO), also known as "going public."
Then, the profit made by that business is being shared among the share holders in the way of dividents,normally the price of the share of a company varies with certain aspects,mainly, according to economic conditions, the performance of the company and investors' attitudes.In this the stocks that pay frequent income by way of dividents are called income stocks, the stocks that a company which reivests for the growth of the company furthermore are called growth stocks.
Here, the broker is a person who buys and sells these shares through an exchange for a commission charged from the consumer to do so,he may do this on the trade floor or or can make trades by phone or electronically.
How to start an online trading with this much information we will see in the next blog.