Most people think of stock trading as gambling your money away, but nothing could be further from the truth. Trading in stocks is actually a skill set that can be learned by anyone with a fair amount of discipline, dedication, and appetite for risk. It is not an easy practice, but if you play your cards right, it is entirely possible to turn a neat profit on your investment.

Image Source – Stock Market

Choose a Comfortable Trading Style

Trading means buying and selling stocks by holding them for a fixed duration that could range from a few seconds to a few years. The first and most important rule of trading in share market live is to invest in what you understand. Doing so will help you recognize how you can grow your earnings and enable you to pick a trading style you are comfortable with. The different styles of trading include:

• Scalp Trading, in which shares are held only for a few seconds or minutes.
• Day Trading, in which shares are traded within a day and not held overnight.
• Swing trading, in which shares are held for anywhere between a day to two weeks.
• Position Trading, in which shares are traded across a span of months to years.

Be Aware of Good Stocks

To invest in good stocks, you first have to know what makes a stock good. Factors such as the revenue growth, profit margin, and dividends of a company play crucial roles in determining its overall financial health.

Another important consideration when buying stocks is its share price. When stock is available at a low price, it means the business is running and potentially growing slowly, whereas expensive stock signifies that business is expected to grow at a rapid rate in the near future. However, bear in mind that you should not buy a stock based on price alone. Make sure you understand the psychology behind each value.

Additionally, pay attention to the liquidity of the stock. You don’t want to invest in shares that cannot be bought or sold easily and quickly.

Know When to Sell

As beneficial as it is to know when to buy, you won’t actually start generating profits unless you sell on time. There are several indicators that will tell you when it’s time to sell, most of them depending on your own criteria. If the stock hits your price target, the company’s financial health deteriorates, or if it decides to cut dividends, the wise move would be to sell. Designing a selling plan will help you minimize losses and maximize gains.

Hire a Stockbroker

If you want to earn profits through stock trading but don’t have the time or knowledge it requires, you may want to think about hiring a stockbroker. They are professionals who will supply you with effective suggestions on where, when, and how to invest based on your capital and the type of investor you are. Not only that, stockbrokers can also manage your trades and maintain important documents. They will provide you with a better understanding of the market and apply their skills to improve your finances. It is a big investment decision, one that must not be made without considerable thought. Don’t forget to weigh the pros and cons before you sign up for any services.

The share market live is a great place to explore the market and enhance your financial portfolio. Of course, you first need to develop key skills and get accustomed to its volatile environment before you can become a pro. But if making profits is your aim, then start by following these tips and you will find success.

Intraday trading or day trading, as the name suggests, refers to the buying and selling of stocks on the same day. Many beginners in the stock market find this style of trading to be an attractive proposition to jump in and make a few extra bucks. However, they lack the expertise and knowledge required to earn good returns on their investments.

Image Source – IntraDay Trading

This is when brokerage comes into the picture. Intraday trading brokerage is the commission charged by the broker who aids in trading. All trading platforms charge brokerage to provide a portal to the investors. Thereafter, a certain percentage is charged on every transaction facilitated through this platform. For instance, if the volume and value of your trade is huge, your brokerage fee will also be heavy and vice-versa.

Brokerage charges may vary from one broker to another. Some brokers may charge you 0.10 % while others may levy a hefty amount of 0.55% per transaction.

This ultimately impacts the intraday trader’s overall profits to a large extent. So if need be, the cost of brokerage can be reduced to increase the trader’s profits. For this, you can enable a simple solution called free intraday trading.

Unlike the brokerage fee that is charged as a percentage on the value and volume of the transactions made, free intraday trading is charged at a flat fee. A very affordable amount of Rs. 999 is applied for a year, which is less than Rs. 4 per day. This not only gives traders the chance to keep a maximum percentage of their profits, but also gives them the freedom to take buy-sell decisions for themselves.

Other benefits of free intraday trading are as follows:

  • Unlimited access to equity and other important reports by a team of experts.
  • Up-to-date account information.
  • Live-streaming stock market data and information on top gainers and losers.
  • Availability to make your personal watch list and keep a track of certain stocks of your choice.
  • Options to create graphs and charts tracking your past and future performance.
  • Receive stock recommendations that assist in making informed decisions.

One must remember that free intraday trading is only for self-traders who would like to trade from the platform directly. If a trader would like to trade with the help of a dealer or broker, charges may vary.

A flat brokerage amount encourages huge savings for intraday traders. It also helps maximize their return. Moreover, this freedom allows intraday traders to make better decisions and earn more profits.

Intraday trading acquired a bad reputation in the early 1990s. This was primarily because many traders jumped onto the new online trading platform without applying any tested strategies. This unplanned move obviously resulted in adverse results, and traders’ typically incurred huge losses.

So, before you invest your time and money into this trading program, ensure you have the right knowledge and assistance that is required. Once you learn the rules and get a hang of the strategies needed for anticipating market moves, you will be able to make good profits in the future. However, remember, patience and discipline is the key to success in intraday trading.

This year, Father’s Day falls on June 17. So be prepared to be pleasantly surprised when your little kid hands you a cute little gift and wishes you a Happy Father’s Day. Being a dad is one of the greatest joys in life. But this love and happiness come with a great deal of responsibility. Right from the moment of your child’s birth, there are a lot of expenses. Toys, clothes and visits to the hospital are some of them. But as your child grows, the list of bills only gets longer. In this article, let’s discuss how you can be a responsible father and secure your child’s future.

Image Source – Money Saving

Huge costs in the future

Did you know that an engineering degree from a top-tier government-aided college costs around Rs. 5-6 Lakh. The same degree costs Rs. 8-10 Lakh in a private college and in case of a college abroad, it would cost more than Rs 1 crore! The cost of education has risen exponentially in recent years. And if you include the cost of a wedding [the other major expense], it becomes pretty evident that you need to save a huge sum of money before your child grows up. In other words, you have roughly 18-20 years time to create a substantial fund to meet these huge expenses in your child’s life.

Financial planning to meet these expenses

Rs 1 crore! In 18 years!! How will I ever create such a large sum of money on my regular salary?

Well, don’t go into panic mode, yet. The amount might seem extraordinarily large. But guess what, it is possible. But for that, you need a proper financial plan. The first step is to list down all the expenses you may encounter in the future. You need to account for schooling, healthcare, clothing and those intermittent hobbies your child may get interested in all of a sudden.

Yep, between the 8th and 9th grade, your son’s only goal in life might be to become a drummer in a rock band. You relent and buy him a drum kit [that costs thousands of rupees]. But by the time school starts again, he has lost all interest in drumming. Now, he wants to become a cricketer. Sigh!

The point here is not to quash your child’s dreams and goals. Rather, it means that you need to be prepared financially to meet any of these unexpected costs.

Where can you invest?

Putting money in your bank account might sound like a good idea. However, at 3.5-5%, the returns are not very high. There are different investment avenues that can help you reach your financial goals at a much faster rate.

Consider mutual funds through a Systematic Investment Plan [SIP], it is possible to meet your financial goals at a smooth and steady rate. For example, by investing Rs 10,000 per month in a mutual fund [at an interest rate of 13% per annum], you can create a corpus of Rs 1.14 crore in 20 years!

Similarly, you can invest in stocks for long-term financial goals provided you are comfortable with the associated risk. For short-term goals, you can consider debt funds or liquid funds to meet your goals.

To sum up, in the eyes of a child, a dad is a superhero. He can do anything. The good news is, you can keep up this image by providing for your child in the right way. So, get out the cape and mask, invest money and become a super-dad!

Concerns about online trading security will always be there, thanks to all the scary stories you read online about computer hackers and viruses. However, all online brokerages use high-end encryption to scramble data so that only the intended receiver can use it. Stealing information that is encrypted is virtually impossible even if they seem simple in those horror stories of online trading you may have heard from a friend or colleague.

Image Source – Trading

But as they say, “Prevention is better than cure.” Here are twelve amazing ways to protect your personal and financial data when trading online.

  1. When you are opening a demat account, create a password that is complicated and difficult to guess. Avoid your names, birth-dates, wedding dates, etc. Also, never share your password with anyone ever, and do not write it down on a piece of paper or your diary.
  2. Just having a complicated password is not enough, you must maintain it too. So, change the password every quarter. Though web browsers offer the ‘remember your password’ facility, avoid it. And do not use the same password for all your online transactions.
  3. Avoid using your internet accounts from a cyber cafe, as chances are no proper anti-virus or anti-phishing software are installed on these machines.
  4. Brokers will provide a Two Factor Authentication [2FA] security to help maintain a safe and secure trading account. This security level will require you to enter an OTP password sent via an email or mobile.
  5. Do not entertain phone calls and emails that try to extract your trading and banking details. These people are probably scammers and typically request for an OTP. Never share your OTP password with anybody else.
  6. While using your trading account, if you feel that your system has become too slow or there are too many pop-ups opening, log out and change the password immediately from another machine. Chances are that the security of your PC or laptop has been compromised.
  7. When trading, remember the 3 golden rules –
  • Never let your trading screen remain unattended
  • Always log out of your trading account instead of simply closing the window
  • Regularly clear the cache
  1. While it’s fine to use Wi-Fi to access your internet, you must avoid free Wi-Fi services offered at hotels and airports because these are mostly insecure. A dedicated connection for internet trading is always preferred.
  2. Avoid downloading unknown software on the device you use for trading, no matter how entertaining they seem.
  3. It’s wise to have a personal firewall with anti-virus and anti-spyware components. These firewalls may have a small price tag attached to them but consider it an investment.
  4. When trading, type your trading account name in the status bar. Don’t use any short cuts or hyperlinks. Also, ensure that the trading address starts with https:// and not http:// to be sure that you are using a secured and safe site.
  5. Stay away from unauthorized trades; one smart way to do this is to cross-check your personal trade sheet, order book, and trade book. Also, monitor the contract notes closely and reconcile it with your demat account and bank account at least once a week.

Given all the potential risks we are susceptible to, it is always better to ensure that we are trading safely and securely.

The usage of mobile apps in India grew by 43% in 2016, with the finance category witnessing a significant increase in adoption, according to a study by Yahoo Flurry Analytics. The fact that phones are omnipresent in the lives of today’s ordinary consumer, it’s easy to see why many Indians are opting to use financial apps to help them manage their spending, debt, savings and investments. With the right financial app, any young millennial aiming to live a financially responsible life can have their dream turned into a reality.

Image Source – Finance

Here are the most popular classes of apps that can have a positive impact on your financial future:

Debt management apps

While most people might try to avoid them, loans and credit play an important in the financial status of most people, not to mention, in fulfilling emergencies. In fact, 29.8 million credit cards had been issued by 31st March 2017, according to the Reserve Bank of India. Even as you seek financial options like personal loans from lenders, it’s always wise to find ways you can improve your income and get your finances in order so as to avoid too much borrowing. Otherwise, without the right approach, repaying all this debt can be a challenge. Luckily, there are some few apps that can help you plan a strategy for repaying your loans. Apps such as Debt, Qoins, Bury.Me and Digit can not only help reduce your debt levels but also help in preventing you from spending more than you earn using your credit card.

Strategic saving apps

With India poised to become the third-largest consumption economy by 2025, it’s important to know that the little things you purchase daily have a significant impact on your spending, savings and overall financial future. For instance, simple choices such as drinking coffee every morning in a cafe could easily eat down on how much you can save for investing elsewhere. With apps such as Mydala, Little App, Pennyful and GrabOn, you can make the right choices on where to buy items. Most of these apps also have great suggestions of the best places to get coupons and take advantage of discounts. Although a slight discount might seem minor at first, it will affect your savings cumulatively.

Apps geared for investment

The world of investment can both be intimidating and challenging for a person with little to no knowledge about which area will be most profitable. In fact, some people might make emotion-driven investments which can turn out to be entirely unfruitful. On the other hand, working with financial advisors who charge high fees is not for everyone. Online apps provide both the young and old investors with unbiased information on where to be put their money at a low cost and with tight security features. Apps such as Acorns, Betterment, Robinhood, and Stash are some of the best apps on the market for those looking to get investment tips.

Financial responsibility is essential for a sustainable future. The above apps are only but tools to help you manage your finances better. Consider using them for making smarter money decisions.

The best way to deal with a financial crisis is by borrowing from external sources. Many banks and Non-Banking Financial Companies [NBFCs] offer loans at competitive interest rates and flexible repayment schemes. Due to the numerous features and benefits offered, loans have become a popular option among the masses.

Image Source – Personal Loans

An increasing number of individuals are now opting for personal loans. Such loans, also known as unsecured loans, are obtained without the need for collateral. You are required to repay the principal amount along with the specified interest over a period of time, known as the tenure. The installments paid over the loan tenure are known as Equated Monthly Installments [EMIs].

Following are some basic features and benefits of an unsecured loan.

  • High borrowing amount
  • Flexible repayment options
  • Competitive interest rates
  • Minimal paperwork
  • Quick loan disbursal
  • Online approval

Uses of an unsecured loan

Banks and NBFCs do not question the purpose of borrowing such a loan and hence you may use a personal loan for any purpose you seem fit. You may use the amount received to cover emergency medical expenses or may use it to cover your wedding expenses. You may also use such a loan to pursue your further education, to cover expenses related to a domestic or international holiday, to consolidate debt, or to renovate your home, among others. Such a loan is also useful for repairing your vehicle, making down payment for a new home, or for starting a new business venture.

Eligibility criteria

The eligibility criteria for applying for such a loan vary from lender to lender. However, the basic criteria remain the same. Applicants need to be Indian residents and in the age group of 21 to 58 years. Applicants may be employed at public companies, Multi-National Companies [MNCs], or private companies. It is also mandatory to have a basic educational qualification, that of a graduate. Financial institutions also require applicants to have a minimum net monthly salary, say around INR 20,000, with a minimum work experience of one year.

Documentation required

Upon fulfilling the eligibility criteria, you may submit your application at the bank of your choice. Along with the application form, it is necessary to provide supporting documents such as identity proof, residence proof, age proof, signature proof, photograph, and ownership proof. Banks also mandate the submission of income details and bank account statements. You may display the originals for verification and may submit self-attested copies.

A personal loan offers relief from your cash crunch. Instead of tapping into your life savings, you may borrow such a loan to cover contingencies or any other financial obligation. By doing so, you may meet your expenses without any financial strain. You may systematically repay your EMIs and budget your finances accordingly.

Financial markets are subjects to volatility. The price of securities, commodities, and currencies, among others, fluctuate due to the market volatility. In order to combat these fluctuations effectively, investors deploy numerous strategies to avoid losses. One of the most popular strategies to reduce the risk of market volatility is hedging.

Image Source – Derivatives

It is a known fact that derivatives are widely used for hedging. The value of this financial security is obtained because of an underlying asset or a group of assets. Based on the price fluctuations of the underlying asset, the value of the derivative also changes.

A major benefit of derivatives is the minimization of risk. It transfers risk from those opposed to the risk to high-risk individuals. Besides, it helps determine current and future prices. Moreover, you may enjoy increased savings and investments in the future.

Types of derivatives

It is important to understand the various types available in the derivatives market. Following are the four most common types.

Future contracts

Simply put, future trading is a contract to sell or purchase a security at a predetermined price at a specified time at a later date. Based on the underlying asset that is being traded, future contracts detail the quantity and quality of the security. Future contracts trade on futures markets and are subject to a daily settlement procedure.

Options contracts

Options trading is a contract wherein the buyer does not have the obligation, but the right, to sell or purchase a security at a pre-determined price on a particular date or during a certain period of time. There are of two types of options – put option and call option. Call options offer the buyer the right, but not the obligation, to purchase a security at a pre-determined price during a certain period of time or on a specific date. Puts, on the other hand, offer the buyer the right, but not the obligation, to sell a security at a pre-determined price during a certain period of time or on a specific date.

Swaps

Swap is a contract to exchange future cash flows based on a prearranged formula. There are two common types of swaps, namely interest rate and currency swaps. As the name suggests, interest rate swaps indicate swapping the interest cash flows of the same currency. Currency swaps, on the other hand, involves swapping the interest and the principal of equal value in another currency.

Forward contracts

A forward contract is a customized contract between a buyer and seller, where they buy or sell a security or commodity at a later date at a price agreed upon today. Securities traded in a forward contract generally include precious metals, commodities, and natural gas, among others.

You may, therefore, use the above-mentioned types to tackle hedging effectively. You may use futures and options, the two most common types of financial contracts, to trade on the stock exchange market.

Shoot for the moon. Even if you miss, you’ll land among the stars. This quote sounds inspiring. In other words, it says: follow your goals even if they appear to be a tad improbable. You do so even when you draw up a financial plan for yourself, especially if you are planning for your retirement.

Image Source – Retirement Planning

In this article, let’s find out why the traditional retirement plan may seem a bit unrealistic but also show how an unrealistic goal can actually be achievable.

Unrealistic goals

Small exercise: go online and use a retirement calculator. The calculator asks you to fill in a few answers about your age, current salary and expenses. Based on this data, the calculator throws up a number. This is roughly the amount you would have to save in order to enjoy a comfortable retirement. If this number is around Rs 5-10 crore [or even more], don’t be alarmed. This is the reality.

Most people are surprised about the ‘unrealistic’ retirement goals. In truth, traditional retirement options end up being unrealistic when the time comes for you to retire.

Traditional retirement plans

Pension plans have been widely popular among Indians for a long time. However, these plans do not offer very high returns. And in the end, they end up covering a small portion of your varied expenses post your retirement.

Employee Provident Fund [EPF] and Public Provident Fund [PPF] are good saving tools, no doubt. But if you see the trend, the interest rates on these plans have been gradually decreasing over the years.

In the last three years itself, EPF has seen a steady decline in interest rates. In comparison, the rates were as high as 12% two decades ago [Source]. This downward trend can pose a problem in the long term.

Inheritance

Assets such as gold, silver and real estate have passed on from one generation to the other for a long time. Many people take comfort in thinking that their inheritance would take care of their expenses during retirement. This is partly true. However, you cannot overestimate the extent of these assets. When you consider factors such as rise in inflation, medical expenses and lack of other sources of income, the inheritance can vanish quickly.

Post-retirement job

Once you retire from your job, you do have the option to look for other sources of employment during your retirement. For instance, you can take up teaching jobs at a local school or university to supplement your income. But this is not an option for everybody. Many people prefer to spend more time with their friends and family during this phase in life. And even if you do work during your retirement, there is the question of how long. As you grow older, it can get tougher to meet the physical demands of a regular job.

What you can do?

What if you had a simpler alternative to the above options? Yes, you heard right. Investing money! That’s all you need to do for a creating a solid retirement plan. The trick is to start investing at a young age. In other words, don’t think of retirement planning as you your retirement day nears. Instead, you should start investing right from the moment you start your career.

For instance, even investing as little as Rs 5,000 each month in a Systematic Investment Plan [SIP] can help you create a large corpus of money by the time you retire.

Here is a table of the benefits of early retirement planning [Source]

Unrealistic?

Well, check again. By investing just Rs 5,000 each month, you can create a lump sum of Rs 4.3 crore!! No fancy investment schemes or plans. Just a simple SIP investment each and every month can help you enjoy a comfortable retirement.

Also observe how the lump sum amount decreases drastically as you delay your retirement planning. This shows how important it is to kick-off your retirement planning early. Even a delay by a decade can create a large setback for your retirement plans.

Conclusion

Retirement is a period of life when your expenses continue [and grow, in fact] but your income stops. And to live comfortably in this stage, you need a good financial plan. Unfortunately, a lot of people ignore this until it is too late. But the best part is, by starting early, you don’t need to worry about it too much. Just invest steadily and you can create a large corpus of money for your retirement. Imagine your happiness when you find out that your account has Rs 4 crore at the time of retirement! Now that calls for a great retirement party!!