If you want to start earning from the share market but don’t know where to begin, this guide will help you understand everything in a simple way.
This article explains share market trading from basic to advanced level so that you can learn step by step and improve your trading skills.
What is Share Market?
A share market is a place where companies sell their shares, and people buy those shares to earn profit.
In Nepal, the share market is called NEPSE (Nepal Stock Exchange).
When you buy a share, you become a small owner of that company.
How Trading Works
Trading is the process of buying and selling shares.
Here is how it works:
- You place a buy order through a broker
- The broker sends your order to the stock exchange
- If a seller is available, the trade is completed
- Shares are transferred to your account
The price of shares changes based on demand and supply.
- High demand increases price
- High supply decreases price
Types of Trading
There are different types of trading based on time:
1. Intraday Trading
You buy and sell shares on the same day. It is risky but fast.
2. Swing Trading
You hold shares for a few days to weeks.
3. Positional Trading
You hold shares for weeks or months.
4. Long-Term Investing
You invest for years with low risk.
Trading Psychology
Trading is not only about charts. Your mindset is very important.
Common emotions:
- Fear: You are afraid to take trades
- Greed: You hold too long for more profit
To become a successful trader:
- Follow your plan
- Control emotions
- Avoid overtrading
- Be patient and consistent
Risk Management
Risk management is the most important part of trading.
Always follow these rules:
- Risk only 1 to 2 percent of your capital per trade
- Always use stop loss
- Do not trade with loan money
- Protect your capital first
Risk-Reward Ratio
Before taking a trade, calculate your risk and reward.
Example:
- Risk: 10
- Reward: 30
Risk-Reward Ratio = 1:3
Always try to take trades with at least 1:2 ratio.
Technical Analysis Basics
Technical analysis means studying charts and price movements.
Important concepts:
- Trend (Uptrend, Downtrend, Sideways)
- Volume
- Support and Resistance
Candlestick Patterns
Candlestick patterns help you understand market behavior.
Popular patterns:
- Doji (indecision)
- Hammer (bullish signal)
- Engulfing (strong reversal)
Always wait for confirmation before entering a trade.
Support and Resistance
- Support is a level where price stops falling
- Resistance is a level where price stops rising
These levels help you decide where to buy or sell.
Trend Following
Trend shows the direction of the market.
- Uptrend: price moves up
- Downtrend: price moves down
Rule: Trade in the direction of the trend.
Indicators
Indicators help you confirm your trades.
Popular indicators:
- RSI (overbought and oversold)
- MACD (trend and momentum)
- Moving Average (trend direction)
Do not use too many indicators at once.
Entry and Exit Strategy
Before entering a trade, check:
- Trend direction
- Support or resistance level
- Candlestick signal
- Risk-reward ratio
Exit strategy:
- Set stop loss
- Set target
- Use trailing stop loss
Trade Journal
Always keep a record of your trades.
Write:
- Entry and exit price
- Profit or loss
- Mistakes
- Lessons learned
This helps you improve faster.
Backtesting
Backtesting means testing your strategy on past data.
Before using real money:
- Test your strategy on charts
- Analyze results
- Improve your system
Final Tips
- Do not follow tips blindly
- Focus on learning first
- Be consistent
- Start small
- Practice regularly
Trading is a skill that takes time to master.
Download Full Share Market Trading Guide (PDF)
If you want to learn everything in detail, download the full guide below:
PDF Haru Download Garna Yaha Click Garnuhos: Click Here
