Value Investing Books

After the 2008 financial crisis, many people have started to follow Warren Buffett’s style of investing. That is why people have been looking up value investing books on the internet.

Now that you’ve reached the right place, let’s first talk about what value investing is.

An investment strategy that requires picking up stocks trading at less than their intrinsic or book value is known as Value Investing. An investor who follows this strategy is called a Value Investor.

These investors are quick to pull out all those stocks that are expected to be underestimated by the stock market. They use various analysis tools like Financial Analysis, Technical Analysis, Fundamental Analysis, and many such instruments.


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They tend to stand out from the crowd and generally invest in quality companies for the long term. With the exponentially increasing popularity of Mr. Warren Buffett, many investors have been attracted to this investing style.

After you have a basic understanding of the investment strategy, let’s move ahead to listing the value investing books.

Best Books on Value Investing

Many beginners in the field look for the best books on value investing, which has brought them to this blog related to value investing books.

We have a detailed list of the most valued value investing books for all these curious learners and investors who wish to learn this investing style. So, without any more delay, let’s dive into the books.

The Intelligent Investor | Benjamin Graham

If you are a Warren Buffett fan, you must be kidding not to know Mr. Benjamin Graham. He’s the ‘Father of Value Investing,’ and he was a professor at the Columbia Business School. The Intelligent Investor was authored by him and was published in 1949.

He is a well known American Economist who is credited with many cutting edge concepts. These concepts have helped his followers climb the ladder of success in the investment world.

Graham has elaborated on multiple principles and strategies for a safe investment while avoiding huge risks. Modern-day investors still use his techniques of value investing to earn large profits.

This book is one of the best value investing books of all time. Every concept is explained with the help of real-life examples that help in understanding the financial world better.

Further, some essential details about the book are as follows:


Value Investing and Behavioural Finance | Parag Parikh

This book was authored by Mr. Parag Parikh and was published in 2017. A discussion around the value investing books would be incomplete without this saying – “When others are greedy, be fearful, and when others are fearful, be greedy.”

Value investing works on this very simple principle. When the market is taking an unprecedented lap (upward or downward), this book works as an antidote to investment anxiety and guides investors towards rational and safe decisions.

Value investing books talk about investment strategies and cover market sentiments, crowd behavior, and psychology of the value investor. It also helps alert the reader about the bubble or crisis and how to avoid its repercussions.

This book also advises you on the process of spotting investment opportunities and pitfalls in various financial segments. Further, this book is a must-read for lay investors, portfolio managers, students, stockbrokers, bankers, and fund managers.

Further, some essential details about the book are as follows:


The Dhandho Investor | Mohnish Pabrai

The Dhandho Investor has been authored by Mr. Mohnish Pabrai and was published in 2016. The book provides a comprehensive framework for every value investor in an accessible and straightforward manner.

This book that is part of the list of value investing books is a guide that expands elaborately on the exceptional principles of value investing proposed and practiced by Benjamin Graham, Warren Buffett, and Charlie Munger.

The most important concept discussed in the book is – “Heads, I win! Tails, I don’t lose much!” You’ll get a brief insight into the Kelly Formula that assists you in investing in undervalued stocks.

In an entertaining way, Pabrai has laid down the Dhandho framework in a straightforward format, and an investor who adopts it is undoubtedly going to improve on their results. These will also help him in beating the market and most professionals.

Further, some essential details about the book are as follows:


The Little Book of Value Investing | Christopher H. Browne

This book is authored by Mr. Christopher H. Browne and was published in 2006. The Little Book of Value Investing can be considered as a concentrated version of The Intelligent Investor, as you’ll find powerful matching concepts here.

The author explains the concept of buying stocks by using the supermarket shopping analogy. Just like a supermarket, highly expensive and cheap shares are available in the stock market.

It takes the right buyer (value investor) with excellent buyer behavior to make an effort to dive into the market and look for items that are high quality but cost less.

In the case of the stock market, it’s only the value investors who have the temperament and patience to do so. These characteristics can be developed by reading the value investing books related to its psychology.

The book talks about diversification of stocks, preferring value overgrowth, creating a margin of safety, insider’s buying or selling pattern, shareholding, etc. You’ll learn many strategies via these simple concepts.

Further, some essential details about the book are as follows:


Value Investing: From Graham to Buffett and Beyond | Bruce C. Greenwald, Judd Kahn, Erin Bellissimo, Mark A. Cooper, Tano Santos

Some of the best global investors have authored the book on the value investing journey – Mr. Bruce C. Greenwald, Mr. Judd Kahn, and Mrs. Erin Bellissimo, Mr. Mark A. Cooper, and Mr. Tano Santos.

The latest edition of the book will be published in 2021, and the first edition was published in 2001. The book is assigned by many professors in business schools and is available in five languages.

This book is a worthy mention in the list of value investing books as it has been put down by practitioners of the trading style from across the globe.

The latest edition is adapted to the recent events and occurrences in the economy and investment world. The foundation of this book was laid when Mr. Bruce Greenwald was taking a course on value investing in the Columbia Business School.

The most significant setback in the investing world is trying to stay on the right side. The steps of being there are straightforward – search for capable securities, value them correctly, conduct research, and wrap it all in a risk management practice.

With risk management, the chances of losing your capital are reduced. The most significant addition to the latest edition is more than two chapters on the valuation of growth stocks.

This aspect of investing has always been a massive issue for investors who follow the Graham and Dodd tradition of investing. The book also contains some selected letters by Warren Buffett.

Further, some essential details about the book are as follows:


Invest Like Warren Buffett: Powerful Strategies for Building Wealth | Matthew R. Kratter

Mr. Matthew R. Kratter authors this book about investing like the king of value investing – Mr. Warren Buffett. The author has studied and observed Buffett for more than 20 years.

Thus, over time, he has funneled Buffett’s insights into an elementary and straightforward program. These insights have been penned in easy to understand language. 

His observations on Buffett – the man himself, make it worthy of its mention in the list of value investing books. This book discusses the following topics:

  • Best time to buy stocks
  • Avoiding investment pitfalls
  • Compounding wealth like Warren Buffett
  • Tricks for decoding financial statements
  • Understanding the difference between a mediocre and great business
  • How much to pay for a high-quality stock
  • Earning profits from the Buffett approach

This book is a fantastic guide for beginners in the world of value investing as it will help you speed up the learning process.

Further, this book highlights the simplistic investing strategy of Buffett in a way that even an investor with no intent to practice value investing will start practicing it.

Further, some essential details about the book are as follows:


The Warren Buffett Way | Robert Hagstrom

The Warren Buffett Way is authored by Mr. Robert Hagstrom and was published in 2013. The earlier editions of the book talked about an in-depth analysis of the innovative investment and business strategies.

These strategies have been behind the spectacular success of Warren Buffett. The latest edition discusses the latest investments by the flag-bearer of Value Investing – Buffett.

These inclusions have increased the distinction of this book and thus is seen among the best value investing books.

The most significant inclusion in this edition is the ways to think like a long term investor, averting loss, and facing enormous obstacles. Also, this book guides you in becoming rational in the course of the ups and downs of the market.

According to the author, the greatest challenge in value investing is to stick with your investments in tough times and not to select the right stocks. Further, it gives readers tips to master the principles and understand the psychology of value investing.

Further, some essential details about the book are as follows:


Security Analysis on Wall Street | Jeffrey C. Hooke

The book is authored by Mr. Jeffrey C. Hooke and was published in 2010. It is an insight into security analysis and business valuation of Wall Street, Corporate America, and international businesses from an insider’s perspective.

The book covers many aspects of the market – the growth of private equity and hedge funds, major market crashes, numerous scandals, and other related developments and situations.

These developments have altered security analysis in a massive way and thus necessitated a new edition. It is considered a continuation of the famous book – Security Analysis (authored by Graham and Dodd).

The book is an excellent resource as it has been compiled by an investment banker, international institutional investor, and private equity executive. The book is full of several examples and case studies to support itself.

It is a very important book for people who wish to have a solid foundation for these critical but complex finance topics.

Further, some essential details about the book are as follows:


Warren Buffett Account Book: Reading Financial Statement for Value Investing | Stig Brodersen, Preston Pysh

This book has been authored by Mr. Stig Brodersen and Mr. Preston Pysh and was published in 2014. It is the second part of a three-book series – Warren Buffett’s three favorite books.

The reason why it is among the best value investing books is that the book teaches you how to select the right stocks and calculate their intrinsic value using two methods.

Further, in the latter half of the book, you’ll learn how to read income statements, balance sheets, cash flow statements, and interpret critical ratios in detail.

Further, some essential details about the book are as follows:


The Little Book That Beats the Market | Joel Greenblatt

The Little Book that Beats the Market is authored by Mr. Joel Greenblatt and was published in 2010. The author is already famous for his classic finance literature, published back in 2005.

The method to outperform the popular market average by applying a systematic and straightforward formula is explained in this book. This formula seeks profitable businesses that are available at significantly lower prices.

The book includes data and analysis of the financial crisis and a model performance according to the writer. It explores the basic principles of successful investing in the stock market in a convenient way.

Further, by the end, the book reveals a time tested formula by the author. This formula automates the process of buying above average companies at a below-average price. The book is considered to be among the best and most straightforward guides to value investing.

Further, some essential details about the book are as follows:


Warren Buffett Letters to Shareholders

The beauty of this book lies in having no author but a compiler. The book is a collection of the letters written to the shareholders of Berkshire Hathaway Inc. by the owner of the company and Badshah of value investing – Mr. Warren Buffett.

Warren Buffett took control of this small textile company back in 1965. The price of one share was $18 then. Later, he sent 50 letters to the shareholders, and that share traded at $2,26,000.

This translates to compounding investor capital at 21% per year, i.e., a multiplier of 12,556 times. The book might not be a book in itself, but these letters might guide you more than any other value investing books.

This book is a compilation of unedited versions of letters written for the last 50 years. In addition to everything, Warren has an incredible willingness to share his way of investing with his students.

When there are millions of books on his ideology and trading style, this compilation provides you with the original behind the scenes of Warren’s strategies and execution.

Some features that make this book stand out from this list of value investing books are listed below:

  • Includes letters from 1965-1976 that are not available on their official website.
  • Person index
  • Topics index
  • Company index
  • Tabulated letters for easy navigation
  • Charts of growth of Berkshire Hathaway

Further, some essential details about the book are as follows:


Conclusion

The list of value investing books is never-ending since the investment style is gaining immense popularity among the long term stock market investors. But, via this list, we have tried to provide the best of books about value investing.

You might be a beginner or professional in value investing; these books are distinguished resources. These have one or the other information that is necessary to step into the market with extreme confidence.

Even if some books talk about the same concepts, they vary in their presentation of the kind of language used. We hope this exhaustive list of value investing books guides you to unmatched profits from the stock market.

Happy reading!

How to Invest in Share Market?

Do you wonder how to invest in share market but fail to find an answer? Moreover, it is a fact that this question is highly popular among outsiders or potential traders. Many people confuse the steps involved and miss or skip a few of them. This dismissal is, undoubtedly, the reason for unprecedented losses.

The fact is, this question is actually where the real journey of the stock market should ideally commence. But, many people tend to ignore it since it seems like a barrier to earning profits. What they don’t understand is the significance of this very question.

Getting any idea of what we are trying to say here?

Yes, but not so much?

Furthermore, do you know there are many do’s and don’ts for trading in this industry?

No?

You must read this blog until the end to learn about these less discussed aspects of the stock market and find the answer to this essential query – How to Invest in Share Market?

Let’s begin.

How To Invest In Share Market In India

There are several steps you must achieve before you start trading various financial instruments in the market. The answer to this very pertinent question i.e. how to invest in share market lies in understanding the procedure.

The first step towards investing in the Indian share market is Stock Market Education. This step can be cleared by either learning the share market online or choosing the offline path.

The popular ways of learning how to invest in share market online are as follows:

  • Mobile Applications

In the digital era, education has been simplified. With mobile applications, you can learn and study anytime, anywhere. There are several applications available that’ll guide you with the journey.

From many foreign players to domestic traders and stockbrokers, you can choose from an ocean of mobile apps available in the market. If you ask our favorite of all, the answer is below.

Stock Pathshala is one such mobile application. You can download it from Google Play Store and Apple Store and start learning the stock market as the app covers various courses on multiple aspects.

The app is an appropriate portal to look for the answer to how to invest in share market.

  • YouTube

Youtube content is accessible to the masses for free and one of the best ways to find how to invest in share market. Many YouTubers have fantastic content and are worth your time and energy.

On the other hand, others might be misleading in zillion aspects. So, before you choose a Youtube channel, make sure you know about the background of the mentor and the level of authenticity of his content.

  • Online Video Courses

With the current situation of COVID 19, there has been a shot up in the number of online courses offered by the stock market experts and traders.

These courses help you achieve your goal by conducting classes online. They can extend the information in either a pre-recorded video or a live session.

  • Blogs

Many experts tend to share their experiences and ideas of the stock market in the form of blogs. They pen these blogs to guide the beginners to become experts in their desired fields.

The blogs cover specific topics as per the expertise and an excellent source of information for blog lovers. You can look for your favorite one that is easy to understand and explains the concepts in the simplest forms.

One of the best stock market blog is A Digital Blogger. There are a few others too.

  • Podcasts

This way of learning is gaining popularity in India in recent times. Since it is at the stage of increasing popularity, the content available on this platform is limited.

Nevertheless, it is a great source to learn how to invest in share market while completing the chores, driving to work, or completing other daily tasks.

So, you shall surely look for different stock market podcasts too.

It would be unfair not to mention the other side of the aisle, i.e., offline learning ways. Although there are multiple ways to learn in the offline world, the best offline ways to look for an answer to how to invest in share market are:

  • Books

There is a vast and bottomless ocean of books available in the market. They discuss various trading concepts in the stock market and simultaneously attempt to answer the question of how to invest in share market.

You can look for books that suit your desired field in the trading industry.  If you are looking for short-term trading, then you must look for books for technical analysis while there are generic books for learning stock market as well.

  • Offline Courses

In recent times, learners and beginners have started not to prefer offline classes or courses. Partly, the reason is COVID 19 and somewhat is the inability to spare traveling time.

But still, many people learn the intricacies of the stock market through the experts and traders that wish to stay low-key and teach in the old formats. 

Although the method might seem out of time, the answer to how to invest in share market remains the same.

  • Practical Implementation

This learning method is least preferred as it requires a lot of surplus money that might or might not yield you profits. But as it is said – practice makes a man perfect; it is an example of that.

Now that we know about the different ways of learning about the share market, we must discuss a bit about the beginners in the stock market.

How To Invest In Share Market – Beginner

The most confused ones are the beginners in the industry who are yet to figure out how to invest in share market. For them, we have listed the complete process below:

  • Learn stock market basics.
  • Identify the type of trading you wish to pursue.
  • Understand its nuances in detail.
  • Open a Demat and trading account with the most suitable stockbroker.
  • Research and analyze the financial instrument you wish to trade.
  • Invest in the best option and earn huge profits.

These steps seem easy in the beginning but are challenging to follow. Try to stick to your plan of investing in the share market. The trader has to maintain consistency in his strategy, execution, and plan.

The more you adhere to the plan, the more insightful experience it becomes. 

How To Invest In Share Market Online

The online method of learning has been gaining a lot of acceptance among the masses. As discussed above, there are several means to understand how to invest in share market online.

Even in this aspect, the most preferred way of learning is through mobile applications. One of the best mobile applications is Stock Pathshala, and some of its features are listed below:

  • Courses from beginner to advanced level.
  • Easy to understand language.
  • Available in multimedia formats – Text, Audio, and Video.
  • The application can be accessed in either Hindi or English.
  • The courses are multilingual – English, Hindi, Tamil, Gujarati, and Telugu.
  • Easy to navigate through.
  • The majority of courses are offered free of cost.
  • Lifetime accessibility of free courses.
  • Short videos to understand the basics of the share market real quick.
  • Lastly, courses in many more languages are to be added soon.

Since many courses offered by this app are free of cost, you are undoubtedly paying for the premium version once you go through the courses available free of charge.

Tips to Invest in Share Market

The traders or investors are required to follow some ground rules to survive in the share market. These rules are not laid down by any authority but are the unsaid rules of experience accumulated over the years.

Some of these rules have been listed below:

  • Even before you jump into the race of earning profits from the stock market, make sure you understand the difference between a trader and an investor. Moreover, you are sure of what you wish to be.
  • Prior to commencing your investment and trades journey, make sure you understand the basics of the market.
  • One of the biggest blunders made by the traders or investors is not spending enough time selecting the correct stockbroker. A wrong choice leads to many problems in brokerage charges, trading platforms, etc.
  • Without any excuse, always use stop loss to reduce your losses. This feature might help you in sudden market crashes and minimize the loss according to your risk appetite.
  • In the excitement of making huge profits from the market, many traders turn to the margin facility. This feeling can land you into many problematic scenarios. So, avoid availing the facility of leverage or margin facility.
  • You should undoubtedly understand the various types of orders as it will help you enter or exit the trade at the most favorable moment.
  • Although the derivatives market seems very tempting, you should maintain a distance from this financial instrument as a beginner. Once you have a proper understanding of all aspects related to derivatives trading, then you can look forward to trading in it.
  • The initial days of your experience in the stock market might be good or bad. So, always start small as the knowledge you gain from them can be utilized later.
  • Never trade stocks because they in the news, good or bad. Use the specified analytical tools and then decide on your investments and trades.
  • Always diversify your investments if you are into long term investment goals. This technique can help you reduce and diversify your profit margin.
  • As a beginner, you should avoid IPOs as they might be very risky without adequately analyzing the company and the market.
  • Try to stay rational in your decisions related to the stock market, as an emotional attachment with a financial instrument can hurt you.
  • You should invest money that is surplus and not a requirement.
  • Keep attempting to understand a company’s financial reports as they are an essential aspect of analysis before placing your trades.

Minimum Investment in Share Market in India

The Indian Share Market does not set a limit on the minimum investment amount. If you wish to trade in the share market, then the only minimum investment you must make is to open a demat account and a trading account.

When you decide to trade in the stock market, you have to pay the account opening charges for a two in one or three in one account as per the stockbroker you have selected.

After you open an account, the broker also levies an annual charge named – Annual Maintenance Charge, popularly known as AMC. This charge varies from broker to broker.

It is relatively high for a bank based stockbroker and the least in the case of discount brokers. In addition to these two, another significant charge you pay is the brokerage fees.

The discount brokers charge the least brokerage charges, whereas a full-service broker tends to charge relatively higher brokerage. However, there are a few exceptions in every case.

How to Invest in Share Market Without Broker?

If you are a retail investor and we were to answer this question in one word, it is – No. To trade in the Indian Stock Market, it is necessary that you use the services of a stockbroker or a depository participant.

However, you can select from a few options.

The first one is that you become a depository participant (DP). But becoming one just for the sake of trading for yourself is not a sane option. The second option is to use DSPPs, or Direct Stock Purchase Plans to invest in the companies.

However, there are some concerns regarding the option of DSPPs. These are listed below:

  • Automatic Fees
  • Not suitable for Short Term Traders.
  • High Initial Cost

Investing in Share Market is Good or Bad?

Before we answer this question, we hope that your query about how to invest in share market has been clarified and you have a clear understanding of the complete process.

An answer to the question investing in share market is good or bad is very subjective. The answer is heavily dependent on the experience of the person who is answering.

A trader or investor who earned huge profits and had a pleasant experience would have an affirmative answer. On the other hand, a trader or investor who incurred losses and faced problems on the broker’s end would respond negatively.

So, to have a pleasant encounter, you must adhere to the above-discussed points and make sure you don’t experiment beyond your risk capabilities. 

Lastly, we hope this article helped sort your queries regarding the stock market.

Happy learning, dear folks!

Learn Fundamental Analysis

Are you confused about how to learn Fundamental Analysis? Don’t worry! We got you covered. In simple words, Fundamental Analysis is a tool used to analyze financial securities if one should invest in them or not.

Before we jump at the first opportunity to learn fundamental analysis, we must understand the basics of this analysis and answer a popular question of what is fundamental analysis.

Let’s begin!

What is Fundamental Analysis?

Fundamental Analysis is a crucial aspect of understanding the investment strategies related to the stock market. It is the method to calculate the intrinsic value of financial security.

Intrinsic value gets measured by going through the economic and financial factors of the corresponding security. This value is affected by any alterations in the macro or micro-level economic factors such as the state of the economy, industry conditions, and management of the company.

The intrinsic value is reached to compare it with the financial instrument’s current price and segregate it as undervalued or overvalued. The fundamental analysis is in stark contrast to the technical analysis as it forecasts the direction of prices.

To reach the fair value of a stock, the analysts follow a well-planned path. They focus on the country’s overall economic state, first, then talk about industrial performance and strength. After these two have been analyzed in detail, they go through the company-specific information.

The data used by fundamental analysts to assess any financial security is available in the public domain.

The essential aspects evaluated during a fundamental analysis are revenues, earnings, information about the issuer, future growth, profit margins, return on equity, and other important company data available.

These aspects are mentioned in the company’s financial statements and are used to undervalue or overvalue the company. Further, the fundamental analysis is carried in two parts – Quantitative and Qualitative.

The Quantitative aspect of Fundamental Analysis talks about the numbers of the company in the financial statements and how positive or negative they are. The qualitative part is about the standard and quality of security.

Things that come under each of these aspects are as follows:

  • Quantitative – Revenue, Assets, Profits, etc.
  • Qualitative – Patents, Brand-recognition, Key executives of the company, and proprietary technology.

Thus, neither of them is superior or inherently better. 

Now that we have a basic understanding of fundamental analysis, let’s move ahead to discuss how to learn fundamental analysis.

How to Learn Fundamental Analysis?

In the digital era, there are numerous ways to learn fundamental analysis. These ways are categorized into two categories – Online and Offline. The most famous methods to learn fundamental analysis are listed below:

  1. Mobile Applications
  2. YouTube
  3. Blogs
  4. Books

Let’s discuss them one by one in detail.

  • Mobile Applications

There are a plethora of mobile applications available for learning various aspects of the stock market. Mobile Applications are gaining fast popularity in the learning industry. 

These are time-saving and provide the facility to study anywhere and anytime. Moreover, the formats of learning have also been updated. Before, the best tool for education was via textual content.

Nowadays, learners want the content to be engaging, attractive, and must be available in multiple formats. These formats can be live video courses, text, audio, or pre-recorded videos.

The learner chooses the most suitable format for them and starts learning. So, you have many options to learn fundamental analysis via mobile applications.

  • YouTube

The free content on YouTube is accessible to the masses and can be consumed as per their necessity. The authenticity of the content has to be accessed by the viewer himself.

A few content creators have mind-blowing content delivery in terms of quality and authenticity. Others might disappoint you in one or the other aspect.

So, before you invest your time, energy, and money with the content of a YouTuber, make sure that his credentials are worth it all, and they should meet your expectations to learn fundamental analysis.

  • Blogs

Many people love learning while reading, and blogs are an emerging tool of learning. These are a perfect tool for this category of learners as the experts in the field pen down their experiences and ideas regarding the stock market.

Similarly, they write on this topic to help traders and investors learn fundamental analysis. These blogs are detailed and provide you unparalleled insight into this simple topic.

  • Books 

Books are known as a man’s best friend, and they indeed are. There are tons of fundamental analysis books available in the market. Let’s list a few fundamental analysis books that are considered the best.

  • Security Analysis | Benjamin Graham and David L. Dodd

The Father of Value Investing authors this book, an investment style heavily dependent on fundamental analysis. It was published for the first time back in 1934.

It is considered to be one of the finest books in the history of financial analysis. The book attempts to provide investors with a distinctive approach to assessing the business of trading in financial securities.

Further, the book is full of examples that help understand the concepts of fundamental analysis in the easiest possible way. The book is a guide that trains the investor to make huge profits from securities that seem unfavorable.

The credibility of the book can be judged from the fact that this book is used as a textbook at Columbia University, where Mr. Graham taught once.

  • Mastering Fundamental Analysis | Michael C. Thomsett

The author of this book has written more than fifty books, including Mastering Technical Analysis, Getting Started in Options.

Before he started as an author, he was a professional accountant and used to run his public accounting and tax consultation business.

The book is loaded with tips and tricks that help investors make better investment decisions as they allow learning to occur via worksheets, forms, graphs, charts, sidebars, etc.

Every concept is explained with definitions in simple words and step by step examples. These aspects help to understand and learn fundamental analysis in detail.

Further, a fantastic plan can be put together to build a strong and diversified portfolio.

  • The Theory of Investment Value | John Burr Williams

This book was initially compiled as a Ph. D. dissertation by the author while he was still in Harvard. The author attempted to amalgamate the theoretical concepts along with the thought-provoking and enlightening commentary.

This style of presenting the information and concepts of fundamental analysis is exceptionally successful in easing the learning process for beginners in the trading industry.

  • The Intelligent Investor | Benjamin Graham

This classic book known as the Bible of Value Investing is evidence of Mr. Graham’s timeless understanding of the market conditions. The book was initially published in 1949.

His philosophy, now known as value investing, shields the investors from errors of investing in the stock market and teaches them to adopt long-term strategies.

The practical application of his ideas and philosophy in recent times has proved his capabilities and wisdom time and again.

  • Fundamental Analysis for Dummies | Matt Krantz

This book is authored by the Money Section’s writer and reporter of USA Today and USAToday.com. In the money section of these two, he covers the investment segment and the financial markets.

Further, ‘Ask Matt’ is a daily column in USAToday.com written by him, where he answers investment questions put forth by its readers.

He has authored Investing Online for Dummies, too, and appeared on FOX Business and Nightly Business Report.

These things add to the credibility of the book and encourage the reader to go through the book. The book is easy to understand, savvy, and a practical guide to learn fundamental analysis.

Having discussed all these formats to learn fundamental analysis, you must always remember some crucial points to take care of before investing your money, time, and energy with any of these.

A brief list is as follows:

  • The Medium of Content (video, audio, text, etc.)
  • Points Covered
  • Is it in Line with your Requirements?
  • Content Quality
  • Language of the Course
  • Duration of the Course
  • Accessibility to the Course Material
  • Language of the Course

Based on these factors, let’s talk about the best way to learn fundamental analysis.

Best Way to Learn Fundamental Analysis

Many people tend to prefer modes of learning to be portable and easily accessible while free time is reducing rapidly.

Due to these requirements, mobile applications have become the best way to learn fundamental analysis as there is an increasing demand for this mode of learning.

This demand is not limited to the stock market education field. Mobile Application is common for all streams of education. 

Mobile Applications have gained popularity because of the various distinctive features offered by them. One such application with a range of features is Stock Pathshala.

Let’s list the features of Stock Pathshala:

  • Helps you learn about the Stock Market in an easy way.
  • These stock market courses are developed in the simplest language.
  • The application can be accessed in Hindi and English.
  • Courses are available in multiple formats – Audio, Video, and Text.
  • Covers multiple aspects of the stock market, from basics to derivatives trading and from fundamental analysis to indicators and oscillators.
  • The courses are multilingual. Currently, they are available in English, Hindi, Tamil, Telugu, and Gujarati. Many more languages to be added soon.
  • Every chapter is followed by a quiz.
  • Extends reviews on all kinds of stockbrokers, PMS companies, IPOs, and much more.
  • ‘Shorts’ feature that explains basic stock market concepts in less than a minute.
  • Courses are provided free of cost and under the premium membership umbrella.
  • Many amazing offers for opening a Demat account, brokerage discount, and a lot more!

Learn Derivatives

An essential component of a smooth trading experience in a financial segment such as derivatives is to “learn derivatives” trading. With so many fish in the sea, one might get confused about which source is better and then goes on to compare different sources.

So, we’ll talk about the various sources to learn derivatives trading in the most uncomplicated formats, and you can choose the one that suits you the best. This article will undoubtedly help clear the air and make it easier for you to take the final call.

Let’s begin!

How to Learn Derivatives Trading?

The biggest question at the starting point of this journey is how to learn derivatives trading. The answer to this question lies in deep research in both online and offline modes. 

If this question were to be answered in the 1980s, the answer would have been limited to reading books and understanding the minutiae by gaining hands-on derivative trading experience.

But after the internet was introduced, the ways of learning have been revolutionized and transformed. This trend of transformation has had an upper curve due to the internet’s increasing accessibility and popularity. The process of education has been made interactive and fun.

Thus, in present times, there are two modes to learn derivatives trading – Online and Offline.

Let’s discuss each of them individually.

Learn About Derivatives Online

In this era of digitization, the means of learning have increased manifolds. The significant sources to learn derivatives trading online are:

Each of these methods has a different format that caters to a varied base of audience and learners. The aim is to assist the learners in learning with ease and enhancing their learning experience.

A lot of us are comfortable with a particular format. For instance, you would like to read information, and contrarily, your friend might be looking for an audio version of the same. Someone else might be interested in learning via videos.

These choices and preferences fill the market with various options. So, let’s talk about these sources in detail.

  • Mobile Applications

Mobile applications are the fastest emerging online mode to learn derivatives trading. There are thousands of applications available in the market that offer you derivatives trading in simple forms.

To choose the right one from all these is a tedious task in itself. But, why would you be lost when you’re reading this article?

An answer to every question related to learning derivatives trading through a mobile application is here. Here is a quick snapshot:

If you ask us, there are certain factors you must look for before you invest your time, energy, and money in any mobile application. These factors are:

  • The Medium of Content (video, audio, text, etc.)
  • Content Quality
  • Points Covered
  • Is it in Line with your Requirement?
  • Duration of the Course
  • Accessibility to the Course Material
  • Language of the Course

You should make a checklist of all these aspects, look for them, and select the application that meets most of the criteria. One mobile application that unquestionably fulfills these aspects is Stock Pathshala.

Stock Pathshala is a stock market e-learning platform that is equipped with various facilities. The mobile application is loaded with courses that cover multiple aspects of the stock market.

These courses are multilingual – English, Hindi, Gujarati, Tamil, Telugu, and many more are to be added soon. The language used is elementary and easy to understand and intend to cover every fundamental aspect.

The courses are segregated into beginner, intermediate, and advanced levels. The courses are uploaded in various media forms – Audio, Text, and Video. You can choose the type that enhances your learning process.

In addition to these, you also have access to their unique feature called Shorts, which provides you with crispy videos that explain the stock market basics in less than a minute. Your journey to learn derivatives trading is simplified with this feature.

Moreover, this cake is iced with articles, videos, and audios that teach various points to help the learner learn quickly.

If we were to list a few courses dedicated to learning derivatives trading, they are:

Lastly, Stock Pathshala offers special courses by Sensibull. These courses are to be bought separately, and their price ranges from ₹900 to ₹4500. Currently, three courses are live:

  • The Ultimate Options Strategies
  • Options Greeks
  • Basics of Options Trading

The majority of the features listed above are available in the free version of the Stock Pathshala. The rest can be accessed by subscribing to the premium version. The subscription fee for this application is less in comparison to the other options.

  • YouTube

The next way in line is learning via free content on YouTube. You watch educational videos to learn derivative trading, prepare notes and learn.

Several online tutors upload videos while explaining the complexities of derivatives trading. These videos are generally available for free, but the content’s quality can’t be evaluated beforehand.

Many educators use YouTube as a platform to give free demo videos and convert them into course subscriptions. With this, we should move ahead to talking about online video courses – paid or free.

  • Online Video Courses

With the reduction in internet costs, many learners are choosing online video courses. According to many scientific studies, videos are the most efficient and effective form of learning.

So, the demand for video-based courses is skyrocketing. This is one of many reasons why educators are switching to providing derivatives courses in India through videos (pre-recorded or live).

These courses are generally accessible after paying a hefty amount as a fee. In this case, the biggest dilemma is an expensive course that could turn out to be rubbish, and a cheap course could be of high value.

Thus, checking the background before paying is a must.

  • Blogs

Another uprising method of learning is by reading detailed blogs. As the average time spent on the internet is increasing, multiple niche based blogs have come up. These are either written by expert derivatives traders or the experts in this field.

These blogs contain in-depth concepts and every essential aspect necessary to learn derivatives trading. This way is beneficial for people who love to read and gain knowledge.

  • Podcasts

Podcasts are climbing the staircase of popularity fast. They are gaining popularity in India, which is why many educators are commencing their podcast courses.

The most beneficial thing about podcasts is that you can multitask. You might be doing house chores or driving and still be able to grasp the concepts of derivatives trading.

It would be biased not to discuss the offline methods to learn derivatives trading.

Let’s go!


Learn About Derivatives Offline

There are some exceptions in this digital era. These people love to learn via offline methods. Some of the popular offline ways to learn derivatives trading are:

  • Books
  • Introduction to Futures & Options Markets

It is authored by Mr. John Hull. This book is written for people who have a mathematical background. It is suggested to be one of the best books for beginners in the field of derivatives. A person with detailed knowledge of mathematical concepts can master this type of trading with ease.

  • Derivatives – The Wild Beast of Finance

The author of this book is Mr. Alfred Steinherr. This book is considered one of the best books globally for learning the concepts of derivatives. It portrays the actual perspective of the global derivatives market.

It was first published in 1998, and it talked about predictions of the prevailing conditions, and the foresight was insightful in large quantities.

  • Merton Miller on Derivatives

It is a collection of essays on derivatives penned by the Nobel Laureate Mr. Merton H. Miller. These essays address many critical issues and help in demystifying derivatives trading.

This book offers a rare insight into the enticing world of derivatives. It also houses objective evaluations of financial disasters like Barings Bank, Procter & Gamble, etc.

  • All About Derivatives

This book, authored by Mr. Michael Durbin, has an excellent introductory work on derivatives trading.

It includes all fundamental concepts related to derivatives, and these are presented in a unique way to enhance the learners’ clarity. The method of explaining is uncomplicated so that it benefits readers.

It covers various concepts like derivatives types, settlement, valuation, payoff, cost of carrying, etc. The book is highly helpful for beginners as well as professionals.

  • Interest Rate Swaps and Derivatives (by Howard Cord)

Howard Cord, the author of this book, tries to focus on developing an in-depth knowledge of interest rate swaps and other types of derivatives.

It is a successful attempt to highlight the real significance, i.e., risk management tools. These financial instruments are used to explore new opportunities in the trading industry.

The basic concepts of the topic are presented distinctively. The book is immensely helpful for students and a great source of reference for professionals.

  • Offline Courses

Many people love the experience of learning while sitting in a classroom or by being surrounded by like-minded people. This experience is imitated only in offline or classroom courses.

Many educators feel confident in providing the opportunity to learn derivatives trading in the form of offline courses.

Generally, these courses are available in the form of personal tutors or traders who are keen on sharing their trading experiences.

  • Practical Implementation

The best teacher is time and experience. Nothing is further from the truth. The experiences of trading derivatives will provide you with the best of lessons. But this task can be expensive.

Since investing might eat up your hard-earned money, it is suggested to avoid this path of learning.


Conclusion

To learn derivatives trading, you can choose from a plethora of methods. You have the liberty to choose from offline or online ways. Though many traders call this type of trading complicated to understand, it has been simplified by the various formats.

The best and most popular one being – Mobile Applications. The popularity is credited to the accessibility anytime, anywhere. Not just the stock market, every aspect of learning has been transformed into online learning or e-learning.

So, if you wish to learn derivatives trading on the go, you must look out for the most suitable mobile application for you. We hope you check the checklist before subscribing to any course.

Stock Pathshala is an application that will assist you in mastering the concepts of the stock market. The features are unique, and the information is presented in an interactive and engaging format.

You can download the Stock Pathshala app here.

How Intraday Trading Works?

Also known as day trading, Intraday Trading is the first choice trading segment for beginners. To make money from day trading, one should have an idea of how intraday trading works.

Among all, intraday trading is the shortest trading option and has a span of just a single day. 

Thus one can trade i.e. buy or sell stock within the same trading session. 

The age of digitization has made trading easy, and many turn to intraday trading for making an additional income.

However, day trading isn’t all that easy as it seems and requires the trader to have at least a basic knowledge of the intraday trading rules, risks, mechanisms that form a part of the intraday trading process.

Before we get to the point, we learn about what all forms the process; we should know what Intraday Trading actually means. In fact, at Stock Pathshala, we have multiple stock market courses around it.

Intraday Trading Meaning

As the name suggests, Intraday trading simply means “trading within a day.” An intraday trade means that the purchasing and selling of stock are carried out within the span of the trading hours of the stock market. 

Financial securities that can be intraday traded include – stocks, commodities, derivatives, ETFs, mutual funds, etc. The basic idea of intraday trading is to purchase a stock or set of stocks and later sell it at a higher price during the day.  

Check this out to learn derivatives in depth.

In day trading, the trader studies and evaluates stock movements, make predictions on stock prices, and looks to make profits due to fluctuations in price movements of stocks. The trader will purchase a stock earlier in the day and sell the same stock before the market closes.

Intraday trading requires a trader to have quick decision-making capability. If the trader doesn’t act quickly, intraday trading’s fast-moving nature can see the trader miss out on the chance to make profits or, worse, register losses.

Requirements For Intraday Trading

To win in intraday trading, a trader has to have the right mix of knowledge, tools, strategy. In addition, the trader needs to develop some traits as well. Intraday traders need to have immense risk-taking and quick decision-making ability.

Also, once you get into day trading, you will be required to keep a close watch on the stocks trending and rising in the stock market. 

The idea of intraday trading seems simple. But in reality, it demands time as successful intraday trading involves adoption and following the right strategies and plans. 

Following are the requirements for gaining success in intraday trading:

1. Stock Market Knowledge

Getting into intraday trading, which is considered to be the most volatile trading segment of the stock market, without having at least a basic knowledge of the operations of the stock market, is a sure shot plan to failure.

Learn about the stock market, the various types of stockbrokers, and whether their brokerage services suit your investment plans.

There is a long list of securities to choose from, and one shouldn’t get into trading without learning about your options. 

Intraday trading requires traders to study graphs, charts, stock price trends while taking the help of various intraday trading indicators and oscillators. Further, a trader will need to conduct a fundamental analysis of stocks to make more accurate trading decisions. 

Thus, gaining an understanding of the stock market, intraday trading stocks, elements such as graphs, charts, patterns, etc. is important for beginning on the day trading journey.

2. Stockbroker for Intraday Trading

Among the first things, anyone who wants to get into intraday trading will require is a trading and a demat account with a SEBI registered stockbroker. There are mainly two types of stockbrokers, that is – full-service stockbroker and a discount stockbroker.

Choosing the right stockbroker is crucial for an intraday trader in order to get heavy returns on their trades.

An intraday trader will be required to make multiple purchases every day, so ideally, they should opt for a stockbroker who charges minimal brokerage fees and offers quick order fulfillment.

In addition to low brokerage charges, day traders should look for a stockbroker that offers services such as customer support, reliable research tips, recommendations, technical assistance. 

3. Choose a Winning Stock For Intraday Trading

The next step after a trader has settled for a stockbroker is to select a stock or set of stocks to carry out intraday trading. While selecting stocks, a trader should look at the available stocks across various sectors and also keep a look at their liquidity.

Since intraday trading is highly inconsistent, traders should look to invest in multiple stocks across different sectors to have a cushion against any unpredicted stock market fall.

Also, the best bet for intraday traders is to select liquid stocks. A stock with higher liquidity is greater ease in trading. In general, when it comes to liquidity high-cap stocks are relatively more liquid than small and mid-cap stocks. 

4. Intraday Trading Strategy

Choosing the right stock is only half the job done. Next comes the execution part. The success of a trade is greatly dependent on the type of intraday strategy employed by the trader. 

Even after all the knowledge, the first time intraday traders will face many difficulties in executing orders or making the right move at the right time because a certain strategy might work on a particular day under specific circumstances, but will completely fail on the other instance. 

Thus, traders should learn to employ multiple intraday strategies to make profits in different stock market conditions. A trader should, therefore, keep learning as many strategies, continually enhancing their trading skills.

5. Tools For Intraday Trading

Intraday trading is definitely not a cakewalk and requires a lot of hard work. But an intraday trader’s life is made easy by various tools at their disposal. Traders can employ these tools for carrying out trade more efficiently.

Tools such as an intraday trading platform offer a great amount of assistance to the day trader. A trader can get access to in-depth and real-time data of the stock market, such as price trends, the trade volume, etc. 

These ensure faster transactions for traders and ease of accessibility, which is greatly valued by day traders.

Then there are tools such as intraday trading charts that help traders gain an understanding of the price movements of stocks. These charts depict a stock’s highs, lows over a certain period of time.

In addition, an intraday trader also is helped by the various intraday trading technical indicators such as moving averages, Bollinger bands, the stochastic oscillator, Relative Strength Index.  

All these tools help intraday traders in making sound trading decisions. 

Intraday Trading Tips

Apart from this to experience the win-win situation, here are some of the tips that give you success in intraday trading. 

1. Freeze Entry and Exit Price

Most of the time, due to lack of knowledge or by getting influenced by other traders, buyers often make a wrong decision and enter into the trade by buying the wrong stock.

In order to prevent yourself from such losses, do a complete analysis to decide the entry and exit price before taking a position. 

This will help you to get a clear objective and end up in a trade that helps you earn a good profit. 

2. Make Use of Stop Loss

Since intraday trading is quite risky, stop loss plays a very significant role.

It is therefore important to decide the maximum low price of the stock that you can afford if the stock price falls before the square-off position. Using the stop-loss strategically minimizes your losses during day trade. 

If you are a beginner, then it is good to follow the 3:1 rewards to risk ratio. This signifies that the exit price while loss should be three times lower than the exit price at which you are willing to book profit. 

3. Book Your Profit Once Target is Reached

The mantra behind the successful intraday trading is high leverage and margin/ This helps in amplifying profits.

But although margin money gives you the opportunity to trade with the limited fund still it is good not to be too greedy and adjust the stop loss on the basis of your analysis.

4. Close Your Open Positions

When the trader does not get the right price for their stock, they usually opt for the delivery of shares but doing so is not a good option as the stock you pick for the day trading was analyzed on the technical parameters.

Therefore they might not prove to be fruitful for the long-term investment. It is good to go for the fundamental analysis before switching your ideas and plans. 

5. Understand the Market Trend

Most often traders remain overconfident seeing the market trends, especially when the stock is bullish.

This rise their expectation of earning more profit, but this not always proves to be the right decision as most of the time your analysis might go wrong. So, as the trend reverses, it is good to exit to keep yourself away from loss. 

6. Timing is Crucial for Day Trading 

While doing intraday trading, it is good to avoid the first hour of trading to pick stocks, as the first few hours are highly volatile. It is better to trade between noon and 1 PM. 

7. Choose Right Platform

Next comes the platform that you choose to do analysis and picking stocks.

Picking the right stock helps you to make a quick decision, execution of an order at the minimal brokerage. 


Conclusion

Intraday trading has a strange charm and sees an ever-increasing number of people venture into the domain on a routine. This form of trading happens within a day, making it a place for earning quick profits.

Intraday might be the shortest trading option in terms of duration. However, it is also the most risk-prone of all the trading options. Intraday trading is different from delivery trading as intraday trading doesn’t involve ownership transfer of stocks. 

Traders need to consider a lot while deciding the right stockbroker and a winning stock for day trading. Stock selection usually consumes a lot of time but is just as important part of the process.

Also, traders can assist tools such as trading platforms, intraday trading charts, and intraday trading technical indicators, which helps them make a more refined trading decision. 

 

Intraday Trading Indicators

Day traders require to study a lot of charts, graphs, patterns for carrying out a technical analysis of the stock to make a profit on their trades. Traders employ various Intraday Trading Indicators to gain information such as price movements, price trends, which form a part of the technical analysis of stocks. 

Intraday traders make money by harnessing the stock market volatility.

The stock market prices go up and down every day, and traders need these Intraday trading indicators to make assumptions about the price trends, volume trends of a certain stock.

Top Intraday Trading Indicators

These indicators assist a trader in dividing a strategy to maximize the profits on a trade.

These indicators help an intraday trader to grow a better understanding of the market conditions. Intraday indicators, thereby, assist a trader in planning their trading strategy accordingly. 

Learn more about Intraday Trading Strategies.

We discuss some of the most common Intraday Trading Indicators :

1. Moving Average Convergence Divergence

Moving Average Convergence Divergence is a momentum indicator and is one of the most insightful Intraday Trading Indicators that helps traders, analysts about an imminent reversal in trend.

The indicator shows a comparison between two exponential moving averages of a specific stock’s price. There are two moving averages of different periods, one of 26 days and the other moving average is 12 days. 

MACD is obtained by subtracting the two moving averages of the stock prices. The resulting MACD assists in plotting the MACD line. 

Intraday Trading Indicators

Further, a 9-day EMA called the Signal Line is plotted. An increase in MACD spread is indicative of a rise in stock price, and a decrease in the MACD value tells that the prices of a certain stock are falling. 

In case the MACD line crosses above the Signal Line, it automatically sends a “Buy Signal,” which tells that the time is right to purchase the stock. 

Similarly, it sends a “Sell Signal” when the MACD line falls below the signal line. A “Sell Signal” alerts the intraday trader to sell the stock.

By the way, do you know how intraday trading works? You should learn about it.

2. Bollinger Bands 

Developed by John Bollinger, the widely acclaimed financial analyst, Bollinger Bands is a technical analysis tool that helps traders ascertain whether the stock is in an overbought or oversold condition. 

The Bollinger Bands consist of 3 trendlines – the upper band, the lower band, and the Simple Moving Average line (SMA). Usually, the stock prices tend to stay between the two price bands.

Intraday Trading Indicators

Also, Bollinger Bands reveal a market’s volatility. 

The wider the bands are, the more volatile the market is. And, narrow bands indicate a lesser volatile market. 

When the stock prices are closer to the upper band, the market is believed to be overbought, and the market is oversold when the prices move closer to the lower band.

The reason Bollinger Bands indicator has risen to be one of the go-to indicators among analysts is its unrivaled accuracy of nearly 80%. 

3. On-Balance Volume

On-Balance Volume is one of the classic Intraday Trading Indicators that uses volume flow to predict the price movement of a stock.

On-Balance Volume, created by Joseph Granville, also has the distinction of being among the earliest indicators that helped traders measure positive and negative volume flow. 

The OBV indicator is cumulative by nature, and having its actual value is not necessary.

Intraday Trading IndicatorsOBV is employed by traders, analysts as a tool to confirm stock price movements. The indicator tends to help traders to identify the perfect opportunity to buy stocks by going against the current trend.

The value of OBV is obtained by aggregating the volume on up days to measure the purchasing pressure and subtracting the volumes on down days to get an idea of the selling pressure.

4. Relative Strength Index Indicator 

Relative Strength Index Indicator (RSI) is a momentum indicator that depicts the strength of a stock price. The Relative Strength Index Indicator is often employed by analysts to check the demand and supply of stock. 

In other words, this indicator measures the speed of stock price movements. The indicator has an index range of 0 to 100. When the indicator displays a reading of above 70, this points towards an overbought market. 

On the contrary, an RSI reading below 30 is indicative of an oversold market.

Intraday Trading Indicators

Analysts make use of the RSI indicator to predict a reversal in a particular trend.

A reading above 70 for a stock indicates that the stock is overbought and may not be sold. Likewise, a reading of 30 is indicative of a stock’s ability to be sold at a price lower than its actual value. 

5. Stochastic Oscillator

Stochastic Oscillator is one of the top Intraday Trading Indicators that serves the purpose of comparing the closing price of certain security to its prices ranging over specified time periods. This indicator, instead of measuring the price or volume, tracks the momentum of stocks.  

As the momentum of a stock tends to move earlier than the price of a stock.

Just like the RSI, the Stochastic Oscillator also is a range-based indicator and has a range of 0 to 100.

Intraday Trading IndicatorsSimilarly, this indicator is useful in ascertaining whether the stock is being bought at a price higher than its real value (overbought conditions) or the stock is in an oversold condition. 

A reading of and above 80 depicts overbought market conditions, and readings of 20 and lower tell of an oversold market. The stochastic oscillator is comparatively slower and yet accurate than the Relative Strength Index Indicator.


Conclusion

Intraday trading indicators are used by traders to gain information such as price trends, price movements, which help a trader in making a refined trading decision. 

These indicators speak about the potential of trading in a stock.

At the same time, these intraday indicators offer no guarantee about a stock’s performance but help a trader significantly in making the right move at the right time.

MACD Intraday indicator helps a trader in trading decisions through “BUY” and “SELL” signals, while Bollinger Bands tell about the market volatility and whether stocks are in ideal conditions to be bought or sold.

Since day trading is inconsistent and traders opt for any sort of help that they can receive to make profits. Intraday trading indicators certainly deliver on that front.

Stock Pathshala provides an array of stock market courses that you must check out before you delve into the ocean of share market trading.

Intraday Trading Examples

Traders are a fan of the Intraday trading segment because of its quick money-making abilities. We needn’t even run a poll to prove this. Traders who choose to test themselves in intraday waters would love to learn through Intraday Trading Examples.

Also known as Day Trading, the whole trading span of intraday trading is limited to a single day.

The idea remains that financial security (stocks, commodities, derivatives, currency) is first purchased and later sold at a price higher than its purchase price.

Also Read: Learn Derivatives

Traders can learn through intraday trading examples how to leverage the stock market volatility that is fluctuations in stock prices to make profits by taking positions in stocks for a price lesser than the particular stock’s value and close all the positions later in the day before the stock market closes. 

This process of closing all open positions on a stock before the market closes is called “Squaring Off”.

Intraday traders square off their positions, that is the traders that have purchased stocks must sell and those who have sold must buy at the end of the day.  

But, all this looks easier on paper than actually having to do it in real life. Therefore, we dedicate this article to the task of providing a practical lesson on how to trade using Intraday Trading Examples:

Intraday Trading With Example

For executing Intraday trading, traders need to be well versed with the various intraday trading orders. What looks like a simple task to many, the trading process will require a trader to make several orders. We talk of every such order provided with Intraday Trading examples.

The trading process doesn’t only consist of the purchase and selling of the stock. There are various orders that a trader will have to implement in order to efficiently trade and make profits by trading on stock markets. 

The list of various types of Intraday orders consists of – Market Order, Limit Order, Stop Order, Stop Limit Order, etc. So, it becomes important to learn about the types of intraday orders, the purposes they all serve, and how and when to place them.

Also Read: Intraday Trading Rules

Market Order

When a “Market Order” is placed it means that the trader wants to purchase or sell a particular stock. The trader instructs the stockbroker to immediately purchase or sell the stock at the available price. 

The stock market moves quickly, rather too quickly sometimes for a trader’s liking. Traders need to move just as quickly and place their orders at the right time as soon as they see an opportunity rise, hence, the market orders need to be fulfilled immediately. 

Example of Market Order –  When a trader places a market order to purchase 100 shares of Airtel, the stockbroker instantly credits 100 shares of the stock in the trader’s Demat account. 

Also, traders should have a look at the stock’s liquidity before placing the market orders. As stocks that have comparatively high liquidity tend to enjoy higher ease in trading transactions.

Limit Order 

When a trader places a Limit Order, it depicts that the trader has set a particular limit for selling a stock. The stock automatically gets sold as soon as the stock reaches the price. 

A Buy Limit Order placed by the traders gets fulfilled at the mentioned limit price or lower, whereas a Sell Limit Order gets automatically executed at a specified limit price or higher. 

Here is one of the Intraday Trading Examples within a limit order:

Example – A trader wants to purchase TATA stocks currently available at a price of Rs 200. The trader believes the prices are too high for his liking and thus decides to wait on the stock and places a Buy limit order at Rs 195. 

The stock price does eventually fall to ₹195, and the Buy Limit order gets executed. Once the trader has his stock, he places a Sell Limit Order at Rs 200. 

The order will only get executed if the stock price again fluctuates upwards of Rs 200 or higher. 

Stop Order

A trader places Stop Orders to purchase or sell a stock after its price fluctuates past a particular price. By placing a Stop Order, the trader safeguards himself against losses and also secures the profits.

The order remains inactive until the stock reaches the specified stop price. The trader would ideally place a Buy Stop Order at a price above the current market price in an attempt to gain the maximum profits. 

Similarly, the trader places a Sell Stop Order at a price below the current price of the stock as a measure against incurring losses. The order gets fulfilled automatically as soon as the stock touches the stop price.

Let’s take a quick look at this Intraday Trading Example:

Example – A trader owns a stock that has a current value of Rs 100. The trader then places a stop order to instruct the stockbroker to sell the stock for Rs 98. 

In case, the price comes down to Rs 98 or even lower, the stop order gets executed as a market order to sell the stock. The stock automatically gets sold at the best available price at the time of the trade. 

Stop Loss Order

A trader places a Stop Loss order with a stockbroker to purchase or sell a stock as soon as it reaches a particular price. The stop-loss order is employed by traders to limit their losses. 

Before placing a Stop Loss order, the trader needs to decide a stop price. The stop price shouldn’t be set too close to the current price as the market fluctuations can lead to unnecessary activation of the orders.  

Example – A trader holds a position on a share whose value is Rs 100 that is bullish. But if the trend reverses, in that case, the trader can make use of the stop loss. This minimizes the loss and helps him to exit the trade at the right time. 

So here, let’s consider that the trader set the stop loss at ₹95. 

Through this order, the trader has instructed the stockbroker to sell the stock the very moment the stock price comes down to Rs 95. This protects the profits for the trader and saves him from incurring major losses.

Stop Limit Order

Stop Limit Order is the type of order that provides the traders the best of both a stop order and a limit order. The stop-limit combines stop order and limit order, which means that a trader can set a stop price as well as a limit price on his order, 

However, in stop-limit, the order becomes a “limit order” as soon as the stock price hits the target price. This is completely in contrast to the stop-loss order, which gets executed as a market order once a target price is met.

Example – A company’s stock is valued at Rs 100 and the trader expects it to rise. The trader sets a stop price at Rs 120. In case of a stop order, the order would get executed as a market order once the stock price reaches Rs 120. 

However, in a stop-limit order, a trader can also set a limit price on the order.

The trader sets a limit price of Rs 125, which is the most that the trader is willing to pay for the stock. The order only gets placed if the stock does reach the stop price at Rs 120. Otherwise, the order does not get executed.


Conclusion

Intraday is probably the most exciting trading game.

Such is its charm, that Intraday trading is also the most populous of all the trading segments. Many aspiring traders who see day trading as a way to make some quick money face challenges when they first start out trading.

However, those challenges can be reduced when and if the inexperienced trader learns about what all constitutes the process to place an intraday order. Intraday trading examples will teach traders the way around in day trading, and help execute intraday trades effectively.

The seemingly simple process of intraday trading involves the placement of various orders. Thus, the trader must be aware of their purposes, how to place them to get the maximum profit, and likewise limiting losses. 

 

Intraday Trading Rules

Day trading just like anything has its own set of rules that traders need to follow. These intraday trading rules are the ones that stand responsible for a trader’s performance in the stock market.

Abiding by these rules is not necessary by any means, however, following these will help a trader get the best out of their day trades. 

Intraday is hugely popular among beginners and experienced traders alike. Along with being the shortest format of trading in the stock market it also is the riskiest trading segment. 

Intraday Trading Rules in India

Traders, especially the one trading for the first time tend to lose money more often, rather than making profits. Thus, it is advisable to be well aware of certain intraday trading rules. 

Here in this article, we take a look at some of them : 

1. Choose The Right Broker

The first and foremost step for a trader to get into intraday trading on the stock market is to have a trading account with a stockbroker. The traders have a host of options in terms of the variety of stockbrokers. 

However, finding the one that suits your trading needs is important to an investor’s cause. Having a stockbroker that provides facilities such as research tips, recommendations, market reports, charting tools, etc. 

This is one of the most important Intraday Trading Rules you should ideally be aware of and use in practice.

Learn more: Intraday Trading Tips

2. Research Trends

Trading just like any exam requires a revision of yearly books, notes to perform on the day of the exam. In order to execute an intraday trade, a trader needs to perform thorough research on stocks by studying the various charts to predict price trends.

Intraday traders should look to invest in stocks based on their performance in recent times. The stock prices keep varying all the time, thus, staying updated with the stock price trends is critical for carrying out intraday trades.

3. Businesses Over Stocks

An unknown yet high performing stock might emerge out of nowhere and may even get a lot of attention from traders. However, a wise intraday trader will never fall for such stocks. 

A wise intraday trader will always as a rule choose the stock of a well-established business rather than the well-performing stock of a relatively unknown company. 

Even if it is an unknown company make sure to do in-depth research on the company’s history, its stock offerings, data that may help in understanding the business better.

Remember this Intraday Trading Rule and you will never fail!

By the way, do you know how intraday trading works? You should learn about it.

4. Control Emotions 

Intraday trading isn’t exactly a place for emotions or rather decisions driven by emotions. Emotions tend to lengthen the thought process of an investor. An intraday trader can’t afford any delay in decision making. 

A trader might fear losses or feel greedy about making bigger profits, and want to reconsider his decisions, losing crucial time in the process. The intraday market moves so fastly that it requires a trader to act quickly on any opportunity he sees.

Any delay will see a trader lose out on potential profits.

5. Never Forget A Stop-Loss Order 

A trader might go into intraday trading with the motive of making profits on their investments, but it is just as crucial to be a little cautious of losses as well.

A stop-loss order helps a trader keep a check on losses. A trader sets a price after which the stock is automatically bought or sold. This ensures the trader doesn’t lose money more than he can afford to, while also protecting the trader’s profits.

Having a stop-loss order should therefore not be overlooked.

6. Trade With Surplus Money 

Another Day trading rule would be to never trade with borrowed money. The unstable nature of Intraday trading doesn’t guarantee profits for a trader. One can win money as well as lose money with equal ease.

Therefore, it is advised to day trade with the money that a trader can willingly part with. Taking too much leverage only adds to the risk of day trading.

7. Diversify Your Portfolio

This is one of the most obvious Intraday Trading Rules but not many people will tell you about it. This is seen as one of the trading fundas for long term investing only, however, this is pretty much applicable in the shorter format as well.

Instead of investing big in a couple of well-performing stocks, intraday traders should look to diversify their trading options. The best bet would be to invest in portions in a number of stocks. 

Many factors such as political, diplomatic, economic announcements have a direct impact on the stock market. The stock market can therefore rise and crash at any time of the day. 

The trader instead of investing in stocks of the same sector or business should look to invest across multiple sectors and businesses. 

8. Don’t Overtrade 

Having a diversified portfolio is one thing while taking positions on stocks. But trading in stocks more than what you can afford is overtrading that might result in major losses.

The stock market is volatile and stock prices do tend to move, but not all the time. The prices don’t move all the time and traders should only enter the market when the prices are beginning to take over the market. Invest when the stock prices are notable enough.

9. Take Calculated Risks

While we know Day trading requires a participant to “take calculated risks”. While this is a common phrase in trading circles, however not everybody seems to be sure about the right definition of the term. 

Risks can be calculated by an individual by taking into account parameters such as age, trading experience, knowledge about the stock, understanding of the stock market, etc. 

In truth, understanding the parameters will enable you to make a more refined trading decision. Just ensure that the profit is worth the risk.

10. Trade with a Plan 

Enter the stock market with a plan and try to stick to it. Invest in stocks you are sure about to a certain degree, otherwise, just back off. The stock market is full of rumors, and fake news. All these can possibly impact a trader’s decision. 

An intraday trader shouldn’t listen to any inauthentic, and inaccurate information sources. Take responsibility and learn the truth on your own. Follow the stock market trends closely.

11. Measure Your Profits 

While intraday traders enter the stock market with the motive of making profits and they can be making money to a certain extent. The stock market isn’t exactly a place to sit back, Intraday traders should look for ways to maximize their profits.

Analyzing your profits will help you in devising your intraday trading strategy. Measure the amount you earn per every trade to develop a better understanding of the areas you need to improve. 

12. Go With The Trend 

While there are instances when all the predictions about the stock market fail, and the stock prices suddenly change the direction. However, those instances aren’t regular and far less in number. 

While it is alright to look for breakouts and reversals but it is not possible to trade while predicting that possibility. A trader should look for trends and make the most out of their trades by following the stock trends.

In intraday trading usually, when a stock starts moving in a direction, it follows the same path throughout the day. The short span of a single day usually isn’t enough time for stocks to recover.


Conclusion

Intraday trading offers a great opportunity to make profits. With all the benefits the day trading has to offer, one thing that remains constant is the fact that Intraday is the most fast-paced and risky trading segment.

No doubt intraday is a rewarding proposition. However, in order to reap the benefits, a trader needs to be well aware of some of the top intraday trading rules and that is exactly what we have tried to explain here. 

Adopting the rules mentioned in this piece definitely will stand a trader in good stead.

Furthermore, you must ideally be going through some of the top stock market courses available on our app – Stock Pathshala where we provide curated courses from the Industry experts in different media formats.

Install the app now to learn more.

 

Intraday Trading Tips

Intraday Trading tips are of utmost importance to traders, especially – ones who are just beginning to trade. With all the knowledge that a trader can attain through books, blogs, stock market courses, or any source it is, traders are sure to have a tough time when Intraday trading for the first time.

Many traders are looking for a quick way to make money turn to Intraday trading. However, this is a space where one needs to deal with caution. As intraday trading has the tendency to wipe off a trader’s money with just as ease. 

Intraday Trading Tips in India

Unlike investors who have long term plans to stay in the stock market, Intraday traders tend to capitalize on the stock price movements for a day.

Therefore, traders look for intraday tips to have a better chance at winning and minimizing the losses. Here in this article, we share free tips for intraday trading for beginners and experienced traders.

Liquid Stocks Is The Way

Since the process of Intraday trading involves the purchase and sale of stock in a single day, traders should select stocks that have better liquidity.

The traders can carry out their trading activities, i.e. buying and selling in the stock market before all open positions are squared off for the day. Another Intraday Trading tip for the traders would be to select a couple of highly liquid large-cap stocks. Higher liquidity indicates ease in selling the stock.

Low-cap and mid-cap stocks are less liquid and should be avoided. A trader looking to make a profit might have difficulties selling the stock that has a low liquidity ratio. On some occasions, stocks that are relatively less liquid may not even get squared off.

So, to avoid such a scenario, traders are advised to purchase multiple stocks rather than purchasing a single stock as this helps to keep the risk at the minimum.

Entry and Exit Strategy

Having a solid entry and exit strategy is of utmost importance to an intraday trader’s cause. Thus, setting the Entry and Exit prices are among the primary things that make an Intraday trading strategy work.

It isn’t uncommon among traders to feel unsure about their decisions and tend to sell the stock at the earliest occasion. Believing something is better than nothing, traders then settle for smaller profits.

We advise that you only purchase stock after studying the trends thoroughly. Later, when you do purchase a stock, you should stick to your plan and not make a panic sell thinking that the stock won’t perform well.

For more strategic understanding, check out this detailed review on Intraday Trading Strategies!

Set A Stop-Loss

The stock market is volatile, and Intraday trading all the more. Things don’t always go as planned. There will be instances when a trader might see his/her stock slip below the purchase price.

To limit the losses, traders should make use of a Stop-Loss. Setting a Stop-Loss means that the traders can set a limit on the losses they can take as well as protect their profits and if the stock price falls further down, the stock automatically gets sold.

Stop-loss orders simply help a trader make better trading decisions. 

Don’t Ignore The Market Trends

Try not to go against the market trend. Stock Markets don’t follow a certain path, and even the best of professionals are unable to make an accurate prediction about a stock’s trend. 

There are many unpredictable factors that have a direct impact on stock prices. These factors make some of the stocks grow in demand, prompting a rise in their prices, while some stocks will see a negative effect meaning their prices will drop.

Hence, as soon as you realize the market going in the opposite direction to your assumptions, waste no time in exiting the market. 

Be A Trader

Let’s get this clear – Intraday trading has a span of a day and hence requires the trader to act quickly otherwise he might end up losing his money. Here, once the stock starts following a certain trend, there isn’t enough time left for the stock to recover. 

Intraday is a trader’s game and hence requires the trader to act like a trader rather than an investor. 

By the way, do you know how intraday trading works? You should learn about it.

Don’t Overdo Your Stocks

Intraday Trading can be hugely rewarding, and traders would want to trade multiple stocks per day to make the maximum profit. However, it can prove to be a risky affair as having multiple stocks will become too much of a work.

The trader will have to choose the stocks, keep track of all the chosen stocks, apply stop-loss for each of the stocks. All this will combine to increase the efforts for the trader. 

We advise that you don’t overburden yourself, and settle for just 2-3 stocks for intraday trading. Remember less is more.

Choose And Research Your Target Companies Wisely

When you purchase stocks of a company, make sure that you research the company well. Usually, the stocks of blue-chip companies tend to perform better than others. 

The issue with them is they will be priced higher than stocks of low-cap and mid-cap companies. 

An intraday trader who lacks the ability, experience to find information about a particular company should then opt for blue-chip stocks. 

It would be easier for an intraday trader to find ample information about blue-chip companies thus giving more opportunities to earn the profit. 

Set Your Target

Intraday traders sometimes get so focused on profits that they forget to keep a note of one of the most important things, that is to set a target. Intraday trading is not all about maximizing your profit or minimizing the losses, a trader should ideally have an idea of the target price. 

Having a target price will help you in deciding your long and short position as well as setting up a stop-loss order.

Devote Time

There is no mantra that will help you gain mastery in intraday trading, but sheer practice. More the time you devote to it, the better you will get at intraday trading. Having a full-time job is fine but you will have to somehow make time for it.

As an intraday trader, you will need to keep track of your selected stock or set of stocks. Especially, the first hour of the stock market is extremely crucial for an intraday trader.


Conclusion

Intraday Trading is vastly considered an easy money-making path.

Intraday traders tend to take advantage of the stock market volatility. Traders make profits due to the fluctuations in stock prices which are caused due to various factors.

The intraday trading segment for all the benefits it has to show for isn’t free from its share of dangers. Thus, traders need to be well versed with certain intraday trading tips.

Intraday Tips not only will help them get the best out of their trades but also will assist them in keeping the losses at the lowest.

The tips mentioned in the article will help you to make the right decision and in picking the stocks that open the gateway to earning good profit.

And of course, you can check out some of the top books on technical analysis to upgrade your understanding of the shorter format of trading.

Intraday Trading Strategy

The whole weight of earning profits from Trades rests on the intraday strategy employed by an investor. Beginners might not be aware of what an Intraday Trading Strategy might look like, let alone its importance to the cause of making profits.


Fact – Intraday trading is the most populated of all trading segments. It is also the most popular trading segment for investors who have little to no experience of trading or knowledge about the stock market.


Intraday Traders make money on their investments by taking advantage of the volatility of the stock market. Intraday traders constantly stay on a lookout for an investment opportunity that arises due to the ever-fluctuating stock prices. 

Having an intraday trading investment is crucial for an investor to make the most of when an opportunity arrives, i.e. stock prices fluctuate. An intraday trader would be required to be capable of reading, interpreting, reviewing the stock market charts, graphs, bars, etc. 

Interpreting the charts is a part of the “Technical Analysis of Stocks” which is considered to be complex and more advanced topics of the stock market. 

So, ideally, a novice should look to learn about the basics of technical analysis before looking at any intraday trading strategy. Without the ability to make sense of the charts, a trader would hardly be able to intraday trade. 

You may also choose to read some of the most prominent books for technical analysis for your reference.

While you get to learn stock market from these books, in this particular article, we detail out the different intraday trading strategies you can use.

Intraday Trading Strategies in India

The intraday trading segment offers its participants enough opportunity to make profits. One of the chief characteristics of an intraday trader is having an eye for detecting one which is done through keeping track of the stock trends.

This pretty much sums up what all is required to excel in intraday trading – dedication, a fair amount of understanding of the stock market, and most importantly patience. Intraday trading requires investors to play the waiting game. 

Here is a quick review of how intraday trading works?

An investor might settle for any intraday trading strategy, but will no matter require a lot of patience to effectively implement it. Novices might require some extra time to develop the skill though.  

Another point that needs to be clarified here is that no intraday strategy is foolproof as its performance is dependent on the stock market conditions for the day. A strategy might suit investors on a given day but might completely fail him on others.

Here are some of the most often employed Intraday Trading Strategies:

Reversal Intraday Trading

Reversal Trading is also known as “Mean Reversion Trading”, and “Pullback Trading”. This strategy involves betting on stock against their price trends, hoping them to make a “Reversal”. 

When a stock makes a “Reversal”, it means the direction of a certain stock’s price trends has changed. A stock that was once surging upwards suddenly begins to dip or a stock’s prices suddenly begin to rise. 

Intraday Trading Strategy

Through this strategy, a trader can enter the market at a support level. Every trader would without a doubt love to find a position near the support level. Staying closer to the support level ultimately will help in making higher profits.

A “Support Level” is a low point in a stock’s price trends. The stock doesn’t drop below this point which prompts buyers to get in the mood to purchase the stock. 

Traders should look at stocks at extreme ends of the market, i.e. stocks peaking at new highs and new lows. As soon as the trader recognizes the stock’s reversal, he/she takes a long position to make profits on the stock’s rise. 

In case, if the stock sees a decline the trader will have to close his short position so as to prevent from taking losses. 

Also Read: Intraday Trading Tips

Momentum Trading Strategy

The Momentum Trading strategy is when an investor purchases a stock after detecting its rise and sells the same when it appears to have attained its peak. Momentum trading, therefore, involves an investor keeping track of an up-trending stock’s movement.

There are stocks on the market that make big price movements (around 20% – 30%) every day.

Momentum Trading Strategy

Momentum Trading requires a trader to act quickly in making the investment as soon he/she identifies a big moving stock, holds a position on the stock, and makes the right exit.

Investors take help from intraday technical indicators, usually volume indicators in identifying an upward moving stock for implementing the momentum trading strategy.

With just the right move, an investor can make huge profits in under a blink of an eye.

Scalping Trading Strategy

The Scalping strategy is hugely popular among currency traders. The whole idea of Scalping Trading Strategy is to make multiple profits throughout the day. 

The traders who implement this strategy, known as scalpers, look to take advantage of price movements – no matter how small and make small profits that add up to make an overall bigger profit towards the end of the day. 

Scalpers instead of focusing on winning big on a few stocks, look to win small on multiple stocks.

Scalping Trading StrategyThis strategy is relatively hard to master as it requires an investor to keep tabs on a number of stocks and study their trend.

The process of Scalping strategy forex requires scalpers to pick multiple stocks, hold positions for a short period of time, and have an exit strategy to make profits. The scalper trades multiple times a day and requires the ability to find a winning stock on a regular basis.

This strategy will work fine with traders who don’t want to get exposed to the big risks of intraday trading for longer periods.

Breakout Trading Strategy

A Breakout Trading Strategy involves a trader entering the market after the stock prices have exceeded past the limits on either extreme ends, which is the support level and resistance level. 

Anytime the stock prices move past the support and resistance levels, it indicates market volatility.

Usually, the price trend follows the direction of the breakout. Prices come down if breakouts occur near the support level and rise in the case the breakouts show up near the resistance level. 

Breakout Trading StrategyInvestors detect these breakouts with the help of technical indicators. However, the Volume Weighted Moving Average is by far the most commonly used Breakout Trading indicator.

The ideal Intraday Breakout Trading Strategy for an investor would be to take a long or bullish position on stocks closing above the resistance level.

Similarly, if the stock prices are about to close below support levels, then the investor should take a bearish position.

Pullback Trading Strategy

The term Pullback refers to the phenomenon of the prices of a financial instrument moving in the opposite direction for a brief period.

Usually, these pullbacks cause a lot of confusion for many investors who have a tough time identifying a Pullback from a breakout.

Pullbacks are also known as Retracement or Price Corrections. Having an Intraday pullback strategy benefits the investor as it allows them a better reward to risk ratio. 

Pullback Trading StrategyInvestors include the Fibonacci Indicator in their pullback trading strategy to ascertain a stock’s position whether it is near the support level or resistance level. 

An ideal Pullback trading strategy rests on the assumption that the stocks on an upward trajectory that changed their direction towards the support level will eventually rise. This opens up an investment opportunity for traders who want to sell their stocks.

On the other hand, a well-performing stock will eventually have a pullback and thus it is a favorable time to buy the stocks.

Gap and Go Trading Strategy

Gaps are empty spaces that show up on a stock market chart due to a lack of trading activity. Gaps occur between two consecutive price bars. These gaps are a regularly occurring phenomenon and are caused by some major occurring or announcements. 

An intraday trader should look for gaps of more than 4% as these allow better trading opportunities as shorter gaps are likely to be filled quickly. Usually, these gaps show up during the first hour of the trade. 

Gap and Go Trading StrategyThe first step of the process for Intraday traders who opt for this strategy is to look for these gaps.

The traders also known as Gappers take up positions after closely observing the trend. If the stock price begins to rise, the investor should take up a long position. 

In case, the market gaps down, an investor’s best bet would be to take a short position. 


Conclusion

Intraday trading is no doubt a rewarding prospect. However, with all the benefits and perks comes its own share of risks. Many enter the intraday trading segment mistaking it to be less risky than other stock market trading options.

Intraday trading is also hugely populous, to begin with, and such extreme is the volatile nature of the stock market that a single wrong move can completely wipe an investor’s money. 

Traders need to make their way around this volatile nature of Intraday trading. Intraday traders tend to do so by resorting to using the various intraday trading strategies at their disposal.

The investor will need to learn these strategies and the right conditions, circumstances to implement them. Another thing that needs to be brought to the notice is that the strategies might work efficiently on a given day, yet may not bring the desired result on others.

Investors who would like to learn more about the various intraday trading strategies can enroll for Intraday courses on the stock market learning app, Stock Pathshala. You can find all kinds of stock market courses in this app.

The e-learning platform houses intraday trading courses which will help novice investors and traders in their endeavors. 

Well, with all being said investors need to be patient as the ability to efficiently execute the strategies only comes with time and experience. 

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