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| Stock Market - Day 2 |
When you buy a stock, many beginners think:
App → Buy → Done
But actually, there is a system behind it.
Flow:
You → Broker App → Exchange (NSE/BSE) → Seller → Shares → Demat Account
1. What is a Broker?
You cannot directly buy from NSE/BSE.
You need a broker (middleman).
Examples in India:
Zerodha
Groww
Angel One
Upstox
Broker provides:
Trading app
Buy/Sell access
Charts
Portfolio
Think of the broker as your “gateway”.
2. Trading Account vs Demat Account
Many beginners confuse these.
Trading Account = Transaction account
Used for buying/selling.
Money moves through this.
Example:
Bank → Trading Account → Market
Demat Account = Storage
After buying shares, they are stored digitally here.
Like:
Wallet → money
Demat → shares
Example:
Buy 10 shares of TCS → stored in Demat.
3. How a Trade Happens
Suppose:
You buy 10 shares @ ₹100
Investment = ₹1000
Someone else sells.
System matches:
Buyer ↔ Seller
Trade executed.
Next day (T+1 usually), shares appear in Demat.
4. NSE & BSE
Two major exchanges:
National Stock Exchange of India
Largest exchange in India.
Index = NIFTY 50
Bombay Stock Exchange
Oldest exchange.
Index = SENSEX
Index Meaning
Index = a group of top companies.
Examples:
NIFTY = top companies on NSE
SENSEX = top companies on BSE
If the index rises → overall market is positive.
5. Types of Orders
Market Order
“Buy immediately”
Current price = ₹100
You press BUY → executed instantly.
Good for beginners.
Limit Order
You choose the price.
Current = ₹100
You place:
Buy at ₹95
Order executes only if the price hits ₹95.
Stop Loss Order
Protection against loss.
Buy = ₹100
SL = ₹95
If the stock falls to ₹95 → exit automatically.
Golden Rule: Always use a stop loss.
Example Trade
Capital = ₹10,000
Buy:
50 shares @ ₹100
Investment = ₹5000
Stop loss = ₹95
Risk/share = ₹5
Total risk:
50 × 5 = ₹250
This is how traders calculate risk.
Important Beginner Mistakes
❌ Buying because friends said
❌ No stop loss
❌ Options on Day 1
❌ All money in one stock
❌ Revenge trading
Homework (Day 2)
Difference between Trading & Demat account?
Market order vs Limit order?
Buy ₹100, SL ₹95, Qty 20 → total risk?
Next lesson:
Candlesticks — the language of the market.
(After this, charts will start making sense.) 📈
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