STOCK MARKET BEGINNER GUIDE - 7- HOW TO BUY AND SELL SHARES

HOW TO BUY & SELL SHARES, MARKET & LIMIT ORDER


Learn how to buy and sell shares in the Indian stock market with this beginner step-by-step guide. Order types, placing trades, and tips explained simply.

Introduction: Your First Real Stock Market Action

You’ve learned:

what the stock market is
 Demat & trading account
 charges & taxes

Now comes the real question:

How do you actually buy and sell shares?

This guide explains the exact process used by beginners in India.

Before You Buy Shares (Checklist)

You must have:

Demat account
 Trading account
 Linked bank account
 Broker app login

Without these, trading isn’t possible.

How to Buy Shares — Step by Step

Step 1: Open Your Trading App

Login to your broker platform.

Examples: zerodha kite, MStock, AngelOne

Step 2: Search the Stock

Type company name or symbol.

Example:
Reliance
TCS
Infosys

You’ll see live price.

Step 3: Click BUY

You’ll see order window.

This is where you choose:

  • quantity

  • order type

  • price

Understanding Order Types (Very Important)

There are two main ways to place orders:

 Market Order
 Limit Order

Market Order (Instant Buy/Sell)

Market order means:

Buy or sell immediately at current market price.

Example:

Stock price = ₹500
You place market buy
You get shares instantly near ₹500

Best for beginners.

Limit Order (Price Control)

Limit order means:

Buy or sell only at your chosen price.

Example:

Current price = ₹500
You place buy limit = ₹480

Order executes only if price falls to ₹480.

Used for price precision.

Step 4: Choose Quantity

Decide how many shares to buy.

Example:

Price ₹500
Quantity 10
Investment ₹5,000

Step 5: Choose Product Type

You’ll see options:

CNC
MIS
NRML

These confuse beginners. Let’s simplify.

CNC (Delivery)

CNC = Cash & Carry

Meaning:

buy shares
 hold overnight or long term

Used for investing.

MIS (Intraday)

MIS = Intraday trading

Meaning:

buy & sell same day
 cannot hold overnight

Used for day trading.

NRML

Used for:

 derivatives
 F&O

Beginners can ignore.

Step 6: Place Order

After selecting:

price
quantity
type

Click BUY.

Your order goes to exchange.

Step 7: Order Execution

Two possibilities:

instantly executed
 pending until price matches

Once executed:

Shares appear in Demat account.

How to Sell Shares — Step by Step

Selling is similar.

Step 1: Go to Holdings

Your Demat shares list appears.

Step 2: Select Stock

Choose share you own.

Step 3: Click SELL

Order window opens.

Step 4: Choose Order Type

Market → instant sell
Limit → sell at chosen price


Step 5: Enter Quantity

Example:

You own 10 shares
You sell 5

Remaining 5 stay invested.

Step 6: Place Sell Order

Once executed:

 shares debited
 money credited to trading account

Later transferred to bank.

What Happens After Buying Shares?

After trade:

Day T → buy
T+1 → shares in Demat

You become shareholder.

What Happens After Selling Shares?

After sell:

Shares removed
Money credited

Withdraw to bank anytime.

Best Time to Buy or Sell

Market hours India:

9:15 AM – 3:30 PM

Avoid:

first 15 min
last 15 min

Volatility high.

Common Beginner Order Mistakes

 Buying wrong quantity
 Confusing MIS vs CNC
 Market order in illiquid stock
 Selling all shares accidentally
 Trading without checking price

Example: Complete Buy & Sell Cycle

You buy:

Infosys at ₹1,500
Quantity 10
Investment ₹15,000

Later sell at ₹1,650

Value ₹16,500

Profit ₹1,500 (before charges)

Safety Tips for Beginners

 Start small
 Use CNC for investing
 Use market orders initially
 Double-check quantity
 Don’t rush trades

Market Order vs Limit Order: What’s the Difference? (With Examples)

When you buy or sell shares, you must choose:

 Market order
 Limit order

Most beginner mistakes in trading happen because they don’t understand this difference.

This guide explains both in simple language with real examples.

What Is a Market Order?

A market order means:

Buy or sell immediately at the current market price.

You don’t choose the exact price.
You choose speed.

Market Order Example (Buying)

Reliance share price = ₹2,500

You place:

Market BUY

Order executes instantly near ₹2,500.

You get shares immediately.

Market Order Example (Selling)

You own TCS shares.

Current price = ₹3,800

You place:

Market SELL

Shares sell instantly near ₹3,800.

When to Use Market Order

Use market order when:

 you want instant execution
 stock is liquid
 price difference small
 beginner investing

Best for:

  • large-cap stocks

  • delivery investing

What Is a Limit Order?

A limit order means:

Buy or sell only at your chosen price or better.

You control price.
But execution isn’t guaranteed.

Limit Order Example (Buying)

Current price = ₹1,000

You think it’s expensive.
You want ₹980.

You place:

Buy limit = ₹980

Order executes only if price falls to ₹980.

Limit Order Example (Selling)

You own stock at ₹500.

Current price = ₹520.
You want ₹550.

You place:

Sell limit = ₹550

Order executes only if price reaches ₹550.

Key Difference: Speed vs Price Control

Market order:

 instant
 no price control

Limit order:

 price control
 no guarantee of execution

Real-Life Analogy

Market order = taxi at current fare
Limit order = waiting for cheaper ride

When to Use Limit Order

Use limit order when:

 stock volatile
 price moving fast
 low liquidity stock
 exact entry needed
 trading strategies

Beginner Tip: Large vs Small Stocks

Large companies (Reliance, TCS):

Market order safe.

Small companies:

Use limit order.

Slippage: Why Limit Orders Matter

Slippage = difference between expected and executed price.

Example:

You click market buy at ₹100.
Execution happens at ₹102.

You paid more than expected.

Limit orders prevent this.

STOCK MARKET BEGINNER GUIDE - 6 - CHARGES & TAXES IN INDIA

For investing:

 Market order

For trading:

 Limit order

Simple rule.

Common Beginner Mistakes

 Market order in illiquid stocks
 Limit order too far from price
 Not checking spread
 Panic market sell

Pro Tip: Smart Order Strategy

Entry → limit order
Exit → market order

Used by traders.

Example: Full Scenario

Stock price = ₹500

You want ₹480 entry.

Limit buy ₹480 placed.

Price falls to ₹480 → buy executed.

Later price = ₹550.

Market sell → instant exit.

Key Takeaways

 Market order = instant trade
 Limit order = price control
 Both essential tools
 Choose based on goal
Location: India

Comments

Post a Comment

Popular posts from this blog

GOLD Vs. SILVER : WHICH IS A BETTER INVESTMENT IN UNCERTAIN TIMES ?

Image
  Gold vs Silver: Which is a Better Investment in Uncertain Times?  Discover whether gold or silver is the better investment during economic uncertainty. Learn key differences, pros, cons, and smart ways to invest in precious metals in 2025. Introduction In times of economic uncertainty, investors naturally seek safe-haven assets — investments that preserve value when markets tumble. Two of the most time-tested assets are gold and silver. Both metals have been symbols of wealth, trust, and stability for centuries, yet they behave differently under various market conditions. With inflation rising, global conflicts shaking markets, and currencies losing purchasing power, the debate around “Gold vs Silver – which is the better investment in uncertain times?” has never been more relevant. Let’s explore how each performs, what makes them unique, and how you can invest wisely in these precious metals as part of a diversified portfolio in 2025. Why Precious Metals Shine in Unce...
Read more

THE POWER OF COMPOUNDING

Image
\ The Power of Compounding: How Small Investments Grow into Massive Wealth Over Time Discover the secret behind the power of compounding and how small, consistent investments can create massive wealth. Learn the real-life examples, simple formulas, and proven strategies to make your money work for you! 💸 The Power of Compounding: How Time Turns Small Investments into Big Wealth “Compounding is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.” – Albert Einstein When it comes to building long-term wealth, no other force is as magical as the power of compounding. It’s the quiet engine behind millionaires, the invisible growth machine behind mutual funds, and the secret weapon of smart investors. Let’s break it down — simply, clearly, and powerfully. 🌱 What Is the Power of Compounding? In simple words, compounding means earning interest on your interest. When you invest money, it earns returns. If you reinvest those returns instead of wi...
Read more

BALANCED ADVANTAGE FUNDS : SMART WEALTH CREATION & RISK CONTROL FOR COMMON INVESTORS

Image
  M umtaz begum shaik Jan 10, 2026 Learn how Balanced Advantage Funds work, their benefits, risks, and how common investors can use them to build wealth with controlled risk. A complete beginner-friendly guide. In today’s uncertain financial world, a common investor faces a tough challenge— how to grow money without taking sleepless nights due to market volatility . Pure equity funds can be rewarding but risky, while fixed deposits and traditional savings often fail to beat inflation. This is where Balanced Advantage Funds (BAFs) emerge as a powerful, intelligent solution. Balanced Advantage Funds are designed to automatically balance growth and safety , making them one of the most suitable mutual fund options for salaried individuals, self-employed professionals, and first-time investors aiming for a secure financial future. What Are Balanced Advantage Funds? Balanced Advantage Funds are a category of hybrid mutual funds that dynamically allocate investments between equity (sh...
Read more