What Are Stocks?
When you buy a stock, you buy a tiny piece of a company. If the company grows, your piece becomes more valuable.
Getting Started: Demat + Trading Account
You need a demat account (stores shares digitally) and a trading account (to buy/sell). Both open together.
| Broker | Account Opening | Brokerage | Best For |
|---|---|---|---|
| Zerodha | ₹200 | ₹20/trade or 0.03% | Most popular, clean UI |
| Groww | Free | ₹20/trade | Beginners, simple |
| Angel One | Free | ₹20/trade | Research + advisory |
BSE vs NSE
BSE (Bombay Stock Exchange) and NSE (National Stock Exchange) both list most major stocks. NSE has higher trading volume — most traders use NSE. No practical difference for beginners.
How to Buy Your First Stock
- Open broker app → Search for company (e.g., "Reliance")
- Tap Buy → Choose Delivery (not Intraday)
- Enter quantity (even 1 share is fine)
- Choose Market order (buys at current price) or Limit order (set your price)
- Confirm → shares in your demat by T+1
Types of Orders
| Order Type | What It Does | When to Use |
|---|---|---|
| Market | Buys/sells at current price | When you want instant execution |
| Limit | Buys/sells only at your set price | When price matters more than speed |
| Stop-Loss | Auto-sells if price drops to your level | Always set one to limit losses |
Fundamental Analysis Basics
| Metric | What It Tells You | Good Range |
|---|---|---|
| PE Ratio | Price vs earnings — is it expensive? | 15-25 for large caps |
| EPS | Earnings per share | Growing YoY = good |
| Debt-to-Equity | How much debt the company has | Below 1.0 preferred |
| ROE | Return on equity — efficiency | Above 15% = excellent |
Understanding Nifty 50 and Sensex
Nifty 50: Top 50 companies on NSE. Sensex: Top 30 on BSE. Both track the overall market. If "Nifty is up 1%", it means top 50 stocks rose 1% on average.
Intraday vs Delivery
| Feature | Intraday | Delivery |
|---|---|---|
| Holding period | Same day (must sell by 3:15 PM) | As long as you want |
| Risk | Very high | Lower (time to recover) |
| For beginners? | NO | YES — always start here |
Tax on Stock Gains
- STCG (sell within 12 months): 20% tax
- LTCG (hold 12+ months): Gains up to ₹1.25L/year tax-free. Above that: 12.5%
- STT: Already deducted when you sell (0.1% on delivery)
10 Common Beginner Mistakes
- Penny stocks: ₹5 stocks aren't cheap — they're usually garbage
- No stop-loss: Every trade needs a max loss limit
- Following tips: WhatsApp/Telegram tips = someone else's exit strategy
- Overtrading: More trades ≠ more profit. Brokerage + STT eats returns
- No research: At minimum, check PE ratio and profit trend before buying
- Investing borrowed money: Never use personal loans for stocks
- Panic selling: Markets drop 10-20% regularly. If fundamentals are strong, hold
- FOMO buying: If a stock is already up 50%, you're probably late
- Not diversifying: Don't put everything in one stock or sector
- Ignoring tax:
STCG at 20% takes a big bite. Factor it into your returns
90-Day Action Plan
- Week 1: Open demat account on Zerodha/Groww
- Week 2: Buy 1 share of a Nifty 50 company (Reliance, HDFC Bank, TCS)
- Week 3-4: Learn to read the stock page (PE, EPS, 52-week high/low)
- Month 2: Build a 5-stock portfolio across different sectors
- Month 3: Start a Nifty 50 index fund SIP for long-term
Related Reading
Brokerage Calculator
Compare broker charges
- Calculate exact charges per trade
- Compare Zerodha, Groww, Angel One fees
- See STT, GST, and stamp duty breakup