A thing is valued based on its importance. A teetotaler might be unnerved by a two-fold increase in wine price but not a brewer. Similarly, day to day happenings in the share market might be trivial for an outsider but they are of utmost importance for a share brokerage firm. How does a new entrant to share market learn the intricacies of trade, for the strategies and techniques there are as complex as a beehive? ‘Learn via experience’ suggestions might sound paradoxical and foolish for an amateur. Since mediating trade is more lucrative than conducting coaching classes for profitable trading, learners are deprived of even such facilities. Here, books on share market come as saviors.
Earlier, intermediary service of a brokerage firm was considered a must to participate in trading and the buyers and sellers met and negotiated (their brokers) at a common physical location. Later presence of the buyer and seller at the trade location became unnecessary. But with the introduction of online trading, trading volume increased steadily because of its simplicity and remote accessibility. Now, people are able to trade their stocks and make their own transactions on the computer, rather than having to call their broker and pay high commissions. Online traders can also take the help of various online service providers to choose the correct stocks which suit their style. The internet offers a wide variety of online stock trading sites, some of which include Charles Schwab, E*trade, Fidelity, Firstrade, Muriel Siebert, OptionsXpress, etc. With regard to online stock trading, a website ‘toptenreviews.com’ can provide a clear distinction between various online trading firms and help the end trader to choose the one which suits his trading style. It displays reviews from consumers and online traders about what is most valuable to each online trading firm and how each one tries to differentiate itself from the other. These reviews show that investors prefer options such as Stocks, Options, Mutual Funds, Exchange-Traded Funds, International Stock Exchange, Forex, Retirement Accounts, and Educational Savings Plans. Not only are users looking for low prices, but also a menu of options for investing. For a online trading firm to be successful, simplicity of services is of cardinal importance.
Barry L. Ritholtz explained in his article titled “On Line Trading: A Business Plan for the future” that when one looks past the price war in online trading, what is necessary to differentiate oneself from competitors is really a better business model. He mentions that a firm which can distinguish itself with a better business model can be more successful than other online brokers. He presents a series of ideas which will help achieve this type of business model, and these ideas include: Advertising, Blog, Commentary, Database, Education, and Fund.
A book ‘Stock Market Book’, by DSIJ answers the basic questions of new traders like ‘How to invest in stocks?’, ‘How does the Indian stock market work?’ and ‘What is BSE and NSE?’. The book is a result of comprehensive analysis of share market over 24 years. Another book ‘Trending the markets’, by Sudharshan Sukhani tries to verbalize a market master’s thoughts. It elaborates how a market price analysis can be converted into actionable trading and investing ideas. The book ‘Indian Mutual Funds Handbook’, by Sundar Sankaran, is a guide for professionals as well as rookies in mutual funds. The book lays out the working of Indian mutual funds, their operational and regulatory mechanisms, the advantages and limitations of investing in them along with sensible approaches to personal financial planning.
While these books reflect the respective author’s views and can act as guidelines, ‘The Guts and Glory of Day Trading’, by Mark Ingebretsen, relates some of the extraordinary true stories of twelve ordinary people who became millionaires through day trading. Each of the 12 traders developed a unique strategy, one that suited their own personal situation, style and preferences. If one finds the multitude of stocks to be obfuscating, ‘Winning with Stocks’ is the book to turn to. This book by Micheal C.Thomsett provides suggestions on how to pick stocks, how to manage one’s portfolio and how to make profits in the real market. Insteasd of looking at the stock investing process holistically, it breaks down the process, thereby helping one to zero in on the key factors that pay off big.