The share market has gained widespread popularity in India. Gone are the days when it was a space reserved for traders and investors with deep pockets. Online share trading has brought the ability to enter the share market to every trader, no matter how big or small.
If you want to start share trading but are a little low on capital, don’t worry. You can still make profitable trades. But how? Before we get into that, let us discuss exactly how much capital you need to start share trading.
How Much Capital Do You Need for Online Share Trading?
One of the most significant misconceptions people have before entering share trading is that they need huge capital. You do not need a bag full of cash to start trading on a share trading app or online platforms. There is no minimum capital requirement for share trading.
The Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) list thousands of stocks from varied industries. The share price starts from Rs 1 to any amount. You can start stock trading with as little as Rs 100, too. The money you need to do online share trading, as a result, depends on your needs and expectations.
If you want to know how exactly to generate profits from a smaller capital, read on.
How to Start Share Trading With Less Capital?
Here are a few tips for you to start trading with less capital.
Decide Your Goal for the Day
Before you enter the stock market, decide your trading goals for the day. You may decide to capitalize on demand and supply inefficiencies that generate market price action. Successful trading requires clearly defined and realistic goals about what you want to achieve with your money for the day and making trades accordingly.
Trade Smaller, But Regular
If you are trading with less capital, the best decision would be to start small. You can limit your trades to a single or at maximum two stocks for your trading session. However, make it a habit to track the market and find opportunities daily for the stocks that interest you. Share trading apps like Dhan makes it easier to track and trade stocks.
Keep Emotions in Check
Share markets are dictated by logic and reason. Using emotions to make trading decisions is the biggest mistake beginners make. While choosing stocks for trading, rely only on your research and market data.
For example, no matter how tempting it may be, do not choose illiquid penny stocks. They tend to get delisted without warning.
Know Your Order Options
An informed trader is a successful trader. Invest time in knowing about your options to make the best trading decision. For example, you can cut your losses by choosing ‘limit orders’ instead of ‘market orders’.
A market order executes a trade on the best price available, however, a limit order executes a trade only if it reaches the price set by you.
Use Leverage (Wisely)
Leverage allows you to access more capital from the broker, thus letting you have more trading opportunities or helping you open larger positions. However, keep in mind that leverage can also magnify your losses and become an addictive practice. Thus, use leverage for trading but use it judiciously to boost your trading day.
Conclusion
Share trading with less capital is possible with a good strategy. Tracking the market movements and making small trading decisions regularly is important. Online share trading and share trading apps like Dhan have made it easier for you to find share trading opportunities within seconds.
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