Stock market investments are often considered lucrative, and rightly so. Investing in a disciplined manner, from a young age, can indeed help you create a decent corpus. As a novice, you may be wondering what is the minimum amount required for day trading in India? Let’s understand the answer to this question along with some strategies you should consider as a first-time share market investor.
How much money do I need to start trading stocks in India?
Many new investors often assume that they need a particular capital amount to begin investing in the stock market. However, there is no definite minimum amount required for day trading in India.
The prices of stocks vary, depending upon the company offering them. As such, you can find stocks costing Rs.2 per unit or Rs.2000/-. So, the question is not so much how much money is needed to start day trading in India, but how much you can invest. There are a few strategies you can use as a novice investor. Let’s find out what they are.
Three strategies for new investors
Instead of thing about how much money is needed to start day trading in India, you can follow these three simple strategies.
1. 100 minus your current age strategy
The ‘100 minus your current age’ strategy is one of the most common strategies that new investors can consider. The premise of this strategy is based on the notion of reducing your risk gradually as you age. As per this strategy, the percentage of the stocks you hold in your net worth should be equivalent to 100 minus your current age. For instance, if your current age is 25 years, and you have savings of Rs. 1000 till date, then your investment amount should be 100-25 = 75 percent of your net worth. As such, out of your Rs.1000 savings, you should invest Rs. 750 in the stock market.
2. The X/3 strategy
Beginners, with low-risk appetites, can benefit from this strategy that states that you only need to invest x/3 amount as a beginner. In this, ‘x’ represents the total amount you wish to invest. In case your stock is performing well, you can invest in the same stock a second time and then repeat the same strategy a third time. For instance, let’s say you wish to invest Rs. 7,500. You can divide the amount into three equal parts and invest Rs. 2500 each time for three rounds. The x/3 is excellent for mitigating risks.
3. The 75 percent profit strategy
The 75 percent profit strategy states that if 75 percent of stocks in your portfolio are performing well, then you can continue investing. For instance, if you have invested in 8 shares and 6 of them are performing well, the strategy is working, and you can consider increasing your investment. Note that the chances of 100 percent of your stocks performing well are indeed rare since volatility is a by-product of stock market investments
As a young investor, who’s just started earning, you may not have lakhs or even thousands of rupees to invest. So, questions like what is the minimum amount of shares you can buy in India may cross your find. But the simple answer is that you can begin trading with any amount you can spare and buy as many or as few shares as you like. If you have any doubts and wish to start investing, you can reach out us at Angel One for all your investment needs and expert advice.