How to learn Stock Market | Chart Commando


In general most of the people speak that share/stock market is Gambling, Is it right?

If you express your wish with anybody that you would like to start trading and want to build a career in share market, you’ll be receiving negative suggestions most of the time from most of the people.

Even some of your friends, relatives, neighbors, colleagues etc. will ask you to stay away from share market. As they all think that share market is just a GAMBLING.

They may be right in another way, because more than 90% of the people loose money in stock market & only less than 10% professional traders earn profits from share market.

Any job/activity with proper education & plan of action is known as a profession or business

And any job/activity without education or plan are considered to be Gambling.

Let us know about Stock market in short. About its structure, facts, working nature etc. So as to have a clear vision of Stock market.

A stock market is the aggregation of buyers and sellers of stocks (also called shares), which represent ownership claims on businesses; Stock market is also termed as Equity market or Share market or Capital market.

Stock market is nothing but the Financial market of a nation in general. Indian stock market is divided into two parts.

  • Money market / Cash market.
  • Stock market / Share market.

Money market :

  • Money market is the financial market where securities of short term maturities (1year or less) are bought & sold.
  • The Money market is used for borrowing & lending for short term only.
  • Commercial papers, Banker’s acceptance, Treasury bills these are some examples of Money market.

Stock market :

  • A Stock market is also known as Share Market / Equity market / Capital market.
  • A Stock market is a financial market where buyers and sellers engage in trading (buying & selling) of financial securities like Bonds, Stocks (Shares) etc.
  • The Stock market is used for long term borrowing or raising capital.
  • Equity shares, Performance shares, Debentures, Bonds etc are the part of Capital market.
  • Trading ( Buying / Selling) of shares is done by Traders is the main part of this stock market.

What is a stock / share ?

  • Stocks / shares represent ownership in a publicly-traded company.
  • When you buy a company's stock, you become part-owner of that company.
  • For example, if a company has 100,000 shares and you buy 1,000 of them, you own 1% of it.
  • The shares are traded between the person to person (traders) but not b/w the company & the traders.
  • The shares are bargained for their best price

What is a Company ?

A company is a legal entity formed by a group of individuals to engage in and operate a business (commercial or industrial).

Companies are distinguished as follows

Proprietorship Company

Solo proprietorship company is owned by a single person.

Partnership Company

It consists of two or more persons with partnership deed of mutual understanding.

Limited Liability Company

A limited company is a form of business which is legally separate from its owners (typically shareholders) and managers (formally called directors). ... Even if a limited company has one person involved, who is the sole shareholder and lone director, it's still a distinct legal entity, legally separate from that person. This company run with many compliances.

Private Limited Company

A Private Limited Company offers Limited Liability or Legal Protection for its Shareholders. A Private Limited Company lies between a partnership and widely owned public company. A Private Limited Company is identified by the company name, number of members, formation, directors, meetings, shares, etc. A private limited company does not publicly trade shares and is limited to a maximum of 50 shareholders for its capital investment.

Public Limited Company

A public limited company, or 'PLC' for short, is a company that is legally allowed to offer its shares for sale to the public. It is a company listed on a recognized stock exchange and the stocks are traded publicly. They don't have to offer shares to the public if they choose not to, but the option is there if and when needed.

The Stock market can further be divided into two parts

Primary Stock Market

The primary market is where securities are created (listed), In the primary market, companies sell new stocks and bonds to the public for the first time, such as with an initial public offering (IPO).

Secondary Stock Market

The secondary market is where those securities (listed shares) are traded by investors after the company has sold its offering on the primary market. It is also referred to as the stock market. NSE (National Stock Exchange), BSE (Bombay Stock Exchange) are examples for Secondary market.


It is a place where shares of pubic listed companies are traded. ... A stock exchange facilitates stock brokers to trade company stocks and other securities. A stock may be bought or sold only if it is listed on an exchange. Thus, it is the meeting place of the stock buyers and sellers. There are lot of stock exchanges in India. But mainly two stock exchanges with large volume are as follows..

National Stock Exchange (NSE)

Best for trading as huge Volume is generated here.This is the leading exchange of India.Here in NSE more than 2000 companies have listed their shares.On June 12, 2000, NSE commenced trading in derivatives with index future.

Bombay Stock Exchange (BSE)

  • This is the oldest exchange of India as well as Asia.
  • This is also one of the oldest and top exchange in the world.
  • Here in BSE more than 5000 companies have listed their shares.



Nifty is an abbreviation of National Stock Exchange Fifty, it is the broad index of National Stock Exchange (NSE).

Nifty, also called NIFTY 50, is the market index consisting of 50 well-established and financially sound companies from 22 different sectors out of more than 2000 listed companies on the National Stock Exchange of India (NSE).

Nifty is calculated using 50 large stocks that are actively traded on the NSE. There are so many other famous Indices are there in NIFTY. For ex. Nifty Bank, Nifty IT, FinNifty etc.


SENSEX is the broad index of Bombay Stock Exchange (BSE).

SENSEX is the combined value of 30 top most companies of more than 5000 companies in BSE.

NIFTY, SENSEX these INDICES indicate the strength of the market, These are also believed to be the INDEX of Financial condition (economy) of our nation. For example, if Sensex goes up people become more intrigued in buying stocks because they believe that economy is going to grow.

Important note :

All the exchanges in India are regulated by a regulatory body SEBI. The Securities and Exchange Board of India (SEBI) is the leading regulator securities markets in India,

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