Many novice investors believe that to start making market investments, they must have a certain amount of funds. However, online trading in India does not have a set minimum requirement.
Depending on the entity selling the stock, the price varies. As a result, you can find stocks for Rs. 2000 or Rs. 2 per unit. Therefore, the real question is not how much money is required for online share trading, but rather how much you can invest.
Here are three strategies you can adopt to decide on the minimum amount of investment needed to start share market online trading:
75 Percent Profit Strategy
According to the 75 % profit approach, you can keep investing if 75% of the equities in your portfolio are doing well. For example, if you have invested in eight shares and six of them are performing well, your approach is working, and you should consider raising your investment.Note that the chances of all your equities performing well are quite unlikely because volatility is a by-product of investing in stocks.
X/3 Strategy
This method says that a beginner should only invest x/3 of the total amount you have. The SIPs you make in mutual funds and stocks are nothing more than examples of this well-followed method, even if the denominator’s element is always shifting.In this scenario, your investable surplus is equal to the sum of X. Furthermore, the x/3 works wonders for risk reduction, and without even realizing most of us frequently resort to this tactic.
Suppose you wish to invest Rs. 60,000, you should merely put down Rs. 20,000, or one-third of that amount, in the stock of your choosing right away.
100 Minus your Current Age Strategy
One of the most popular tactics that new investors can think about is the 100 minus your current age strategy. The idea behind this technique is to gradually lower your risk as you become older. This technique states that the number of stocks you own as a percentage of your total wealth should be equal to 100 minus your present age.For example, if you are 30 years old and have Rs. 1000 in savings, your investment amount should be 100 – 30 = 70% of your net worth. As a result, you should invest 750 rupees in online market trading.
Although trading is quickly becoming a popular method for obtaining short-term financial rewards, there are still issues with money management in trading. Money management is a crucial factor, especially for newcomers to online trading. No investment is completely risk-free, however, estimating and reducing the risks is crucial for optimal benefits. Additionally, though there is a lot of research on money management and the simultaneous avoidance of significant risks, the overall approach is largely centred on being practical.
