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Important Stock Market

Ways to make profitable trades and money from stock markets

Irrespective of whether you’re an experienced investor or have recently started exploring the stock markets, your chief aim is to earn a good ROI. How often have you invested in stocks based on your stockbroker’s suggestions only to wait for months, if not years just to break even? No matter how experienced you’re as a trader, dealing with and investing in stocks is more often than not, fraught with unexpected risks, the gains notwithstanding.

Therefore one has to continuously keep in touch with the stock market, study the stock charts, aware of the past trends and foresee the future drifts. Investing in stocks might appear apparently simple and straightforward but could be immensely vexing and complicated in reality. Making money in any type of financial market, be it foreign exchange or bonds do not come easy, and the same also holds for stock markets.

 Before you make up your mind to transact in shares, you need to comprehend the stock market, together with its nuances and subtleties.       

 Effective ways of profiting from your investments in stocks and shares

Be confident about your trading skills and exploit them to the hilt

If you’re sincere in your efforts with regards to understanding the stock market, you’ll surely pick up skills that’ll help you to trade effectively. With passage of time, you’ll be able to fine-tune the skills. You trading skills and acumen will instill in you the sagacity to perceive what you should not do besides what you ought to.

You’ll realize which stocks to short sell and when; when to enter and when to sneak out, and so on. If you persist in studying the stock market, you’ll automatically come to imbibe efficient trading skills which will also boost up your confidence level.    

Understand your capacity to invest and plan accordingly

If you’re trading in the US stock markets, you’ll constantly need to maintain a minimum bank balance of $25,000. In case you’re unable to maintain the above stipulated balance, you’ll have to forget about day trading. Your next option is swing trading for which there is no stipulation to hold onto a minimal balance.

Nevertheless, if you want your dealings to be profitable, you’ll at least have to keep aside $10,000 in your account on a consistent basis. A major part of your earnings from transactions will go towards footing fees and commissions if you fail to maintain the minimal balance.

Trade in only high volume stocks to be on the safe side

It does not need to be exaggerated that only stocks that trade in large or high volumes catch the fancy of veteran investors of financiers. That said a stock should have sufficient volumes so that it is worthwhile for trading. According to reliable sources, the minimum or smallest daily trading volume of a stock should be at least 5, 00, 000 shares.  

So, if you’re starting out, you should consider dealing with stocks of blue-chip companies to be on the safe side. At the same time, be in the know that blue-chip stocks would require you to invest heavily.

Take advantage of short selling strategy

The short selling technique is exploited extensively by seasoned investors and traders. As per this strategy also known as ‘going short’ or ‘shorting’, you normally sell borrowed securities in the hope that their prices will decline considerably sooner or later. If and when the price subsides substantially, you repurchase or buyback the stocks in order to return them to their original owners. 

The idea behind using this strategy is to earn a hefty profit. However, since the market is speculative, prices could also go up significantly, thereby resulting in losses. The possibilities of losing money is greater compared to reaping a profit with regards to short selling.   

Consider buying IPOs

As a greenhorn investor, you’ve more to gain (than lose) from investing money in IPOs. IPO stocks are highly sought after as only select shareholders get the opportunity to purchase them. With IPOs, you can adopt a watch-and-wait policy-purchase them only when you feel the pricing is appropriate.

IPOs stand a good chance of performing well, as the newly incorporated public ltd company will want to bolster its goodwill.

Do not put all your eggs in one basket

Volatility is a given with stock markets. Therefore, your long-term endeavor should be to spread your investments as thinly as possible. In other words, you should invest in a wide range of asset classes or securities and maintain a diversified portfolio. A branched out portfolio offers you the leverage to expect best possible returns at minimal risks.


You’d need to constantly update yourself on the happenings in the stock market, and keep informed about the performance of companies whose stocks you’ve bought. The yearly sales, earnings and revenues of a company have a direct bearing on its stocks. If you wish to profit from your dealings in the stock market and keep losses at a minimum, abide by the aforementioned tips.


Important Stock Market

The nature of capital gains taxation in India

According to Benjamin Franklin, “nothing can be said to be certain, except death and taxes”. Though Ben Franklin penned those words in a letter in 1789, the import behind the maxim is very much relevant in the 21st cent.  As far as death is concerned, you’ll meet it sooner or later but you’ve to keep paying taxes as long as you’re alive. You’re taxed for your earnings, for buying goods and services, for booking a flight or hotel room, and so on.

In fact, you’ve pay taxes for almost anything that involves a monetary gain or transaction. Many traders and investors comprising retired individuals, housewives, and students who deal in stocks for additional income have the impression that earnings from shares enjoy tax exemption. Of course, this is not true. ‘Capital Gains’-the omnibus term used to denote proceeds/losses from trading in equity shares-is very much subject to taxation.

In this article, we shed light on capital gains and how the same is taxed in India.   

Long-term and short-term gains or losses

If you sell stock exchange-listed equity shares within a year of having bought them, and earn a profit, you make a capital gain in the short run. Alternatively, you’ve a short-term capital loss if you lose money from selling those equity shares. The formula or equation for calculating capital gains in the short run is-Capital gain (short-term) = selling price (minus) sales expenses (minus) cost price

However, if you’ve sold the equity shares after holding them for at least 3 years (36 months) and made a profit, your gains are termed as long-term. And by the same token, if you’ve incurred a loss, the same will be treated as long-term loss. The duration of 3 years is calculated from the day you purchased the shares. 

How gains or earnings from shares are taxed?

All capital gains you make from sale of shares in the first twelve months of purchase will be taxed at the rate of 15%. The same 15% tax rate applies regardless of the tax bundle rate (10%, 20%, 30%, and so on) your short run capital gain falls under.  Additionally, if your yearly earnings (not including the short term capital gains) is much less than the minimum taxable income (Rs. 2, 50, 000 for FY 2016-17), the capital gains can be factored in for compensating the deficit.

Once the shortfall is replenished, if any amount (of capital gains) remains is liable to be taxed at the rate of 15% + 3% as cess. You’d be delighted to learn (in case you don’t know) that capital gains made over the course of 3 years and above do not attract tax. The finance budget (2017-18) presented by the finance minister in the Parliament on 1st February 2018 had a new clause on long-term capital gain.

According to the clause, an investor whose capital gains exceeded 1, 00,000 would have to pay a 10% tax on the earnings. The stipulation was applicable to all or any transfer made on 1st April, 2018 and thereafter. Hitherto, capital gains in the long run were not liable to taxation u/s 10 (38).

 Will you have to pay taxes even if you’ve lost money by dealing in stocks?

You can adjust your short term or long term capital losses with your corresponding capital gains. Resorting to this strategy helps you to save money that would’ve been used up to pay taxes had you not made the adjustment. You can carry forward the losses for a maximum period of 8 years, in case you fail to adjust the same from one year to the other. However, bear in mind that you’ll have to file an income tax return in order to validate the capital losses you’ve carried forward.    

Are dividends earned from shares subject to taxation?

You do not need to pay any taxes on dividend income which you’ve earned from stocks or shares of any Indian firm or company. On the other hand, the company or companies that have paid dividends on their shares need to pay ‘Dividend Distribution Tax’. The minimum dividend distribution tax that a company has to pay is 15%.

Logically speaking, the dividend tax which should have been incumbent on you is borne by the company awarding the dividend.

However, be in the know that you’ve pay a STT (securities transaction tax) when or whenever you sell or buy stock exchange listed shares. The tax provisions discussed above apply to only those equity shares for which you’ve paid STT.


Rounding up, it can be inferred that the nature of taxation pertaining to capital gains in India is remarkably simple.


Important Stock Market

Must Know Terms for Stock Market Beginners

If you’ve an entrepreneurial bent of mind and a yen for making money, then investing in stock markets could be a prudent option. However, given the volatile nature of stock markets around the world, putting your hard earned in stocks could be risky, particularly if you’re inexperienced. Anybody with a basic idea of stocks and shares knows that these units reflect the financial standing of a company.

A company’s rising or falling fortunes has a direct bearing on its stocks. So it follows that the value of a share-the basic constituting unit of stock-will go up with increasing revenues and subside when earnings plummet. And given the vicissitudes of the present-day commercial world, business can never be constantly smooth, not even for blue-chip companies.

A seasoned shareholder or experienced stockbroker has had to invest time and money as well as put in a lot of efforts for getting a good grasp on stock markets. Trading in bonds and stocks seem apparently easy as long as you’re on the sidelines-viewing and judging situations as a spectator. It is only when you jump into the fray that you start feeling the heat.

If you’re eager to try your hand at stock trading as a neophyte, the following stock market markets will go a long way in making you a stock market veteran.

Some Fundamental Stock Market Terminologies

Though it is beyond the scope of this article to mention each and every term or expression, an earnest attempt has been made to include as many significant jargons as possible. 

Ask price or offer price or simply ask or offer

The stock market is like any other commercial market, where traders buy and sell shares according to their convenience. Ask price or offer price refers to the monetary value at which you’re willing to sell shares or stocks of a particular company. Now this ask price or offer price could be prefixed or negotiable.

A buyer might be willing to pay a very high price (called bid price) for the shares (much more than your asking price) if he or she feels that their value may rise in the near future. The variance in values of ‘ask’ and ‘bid’ gives rise to another term-‘spread’.            

After-hours transactions

Stock markets throughout the world open and close at fixed times. However, it may not always be possible for you to trade during the official business hours. Nevertheless, you can still transact beyond the scheduled hours but your transaction will be recorded in the subsequent working day. 

Annual report

A company, especially during the end or beginning of a financial year, presents its annual report during the AGM (annual general meeting). The report contains a myriad of information ranging from investments, earnings, profit/loss, and so on. Shareholders present during the event, take significant decisions based on the annual report. 


Assets include materials, goods, and equipment owned by a company as well as other tangible and intangible items like cash, land, buildings, trademarks, and copyrights.

Balance Sheet

The balance sheet reflects the company’s liabilities and assets outlined in the form of a statement. The assets are usually listed on the left side of the sheet while the liabilities appear on the right.

Bear Market

The stock market is said to be bearish when prices of majority of the stocks reflect a downward trend. On the other hand, a bull market predominates when prices of shares are on an upward spiral.  

Blue Chip Shares/Stocks

Deriving its name from the premium chips used in gambling dens and casinos, blue chip stocks embody stocks of financially well-off companies and conglomerates.


Promissory notes brought out by the government and public limited companies specify a particular amount held by the purchaser for a prescribed period of time. Bonds tend to be as stable and exchangeable as legal tender.

Call Option

As the terminology clearly indicates, call option offers the trader or investor the choice of purchasing stock at a predetermined price within a certain time period. However, the trader is under no obligation to exercise the option.


Commodities usually include natural resources and agro-based products traded separately on a distinct platform and called commodity trading.


The realm of stock trading is immense, both literally and metaphorically speaking. In order to learn the ropes and trade confidently in the stock market, you’d need to stay devoted and persevere without losing your patience. The least you can do to become a good trader is to master the trading tools and techniques and become aware of the fundamental stock market terms.     

Important Stock Market

Important Stock Market Terms in Alphabetical Order

Trading or dealing in stocks, bonds, debentures, and other kinds of securities is somewhat akin to gambling in a casino. However, the nature of speculation in a stock market is more protracted and sweeping in sharp contrast to laying bets in casinos where fortunes are made or lost overnight. Hence, in order to improve the chances of getting a good return on your investments in stocks, bonds, and other forms of securities, you need to have an in-depth understanding of stock markets.

Before you decide to invest your money in various types of financial securities, there are a few aspects you should keep in mind. For a start, you should realize that staking resources in stocks could be equally prospective and risky. First recognize why you want to invest-you could be looking to supplement your current income or attempting to build a nest egg for your twilight years.

You’ll have to register with a brokerage, open a trading account, and always maintain a minimum account balance for transacting on a continual basis. You’ll feel confident to enter the fray if you complete a refresher course or attend workshops, seminars and events where successful investors narrate their experience. Finally, opt for a trial offer and practice trading for some weeks before you feel self-assured to give your recommendations to the broker for buying or selling stocks.

Important stock market terminologies indexed alphabetically

  1. Agent-An agent could be a brokerage or securities firm you’ve registered with for stock trading or a stockbroker who buys and sells stocks on behalf of his or her customers. The agent merely acts as a middleman or mediator for facilitating the trade.
  2. All or None- AON or all or none is an order or call to sell or buy the entire lot of stocks held by a shareholder. The AON order stipulates that you have to either buy or sell the shares ‘en bloc’ instead of trading on a piecemeal basis.
  3. Bear Market-Stock markets tend to be bearish when there is a general decline in the prices of listed stocks.
  4. Best-Efforts Underwriting- Best efforts underwriting imply that your investment firm or broker will go out of the way to sell securities of a newly listed company. This underwriting is almost as good as a promise but falls short of a guarantee.
  5. Call option-Call option offers you the choice of purchasing a specified bundle of shares at a particular price and for a specific time period. However, the terminology clearly implies that the offer is an option or choice and not obligatory.
  6. Capital-The term capital generally includes the value of tangible and intangible assets like machinery, land, buildings, technology, and so on. However, in the context of stock markets, capital stands for assets/cash staked in different kinds of securities.
  7. DARTS (Daily Average Revenue Trades)-The median revenue generated by a broker on a day to day basis by way of number of trades placed successfully for which the professional has earned fees or commission.
  8. Day Order-A day order is a particular kind of order involving the buying or selling of a stock or security on a specific day. If the order is not honored on the specific day it stays valid, then the same expires automatically.

  1. Earnings Call-Call conferencing between and amongst a listed company, media, analysts, and shareholders for discussing about the organization’s financial performance.
  2. Equities-Preferred and common stocks comprising a stake in the company owned by an investor or shareholder.
  3. Equity Option-An agreement or indenture allowing the shareholder to trade in a prescribed lot (of shares) for a specific time period at a particular price.
  4. Fair Value-The consolidated financial statement of a firm’s liabilities and assets, including statements of the company’s subsidiaries. 
  5. Fill or Kill-A specific type of order which necessitates the carrying out of a trade immediately comprising a large volume of shares. The FOK order stands cancelled if the same is not executed instantly. 
  6. Floating Stock-The part of a company’s stock that is available for trading on the exchange. When you deduct a firm’s closely-held stock from its overall outstanding lot, you’re left with floating stock. 
  7. Gilt-Edged Securities-High-value bonds and debt securities offered by blue-chip firms and national governments. Though gilt-edged securities have low yields but tend to be extremely secure. The terminology comes from paper certificates with gilded edges published by Bank of England. 
  8. Growth Stock-Company stocks whose value have witnessed a significant and consistent appreciation over the past few years and expected to maintain the trend.
  9. Hedge/Hedge Fund-Hedge is a technique that is resorted for minimizing loss of investment where the investor executes a transaction for counterbalancing the status quo. When investors and their fund manager pool their resources for better management of the portfolio, the fund is called a hedge fund.
  10. Held Order-An order where the trader or stockbroker endeavors to promptly transact the most lucrative deal (ask or bid) for his clients. 
  11. Imbalance of Orders-When a trader is beset with excessive orders of a specific kind (limit, buy or sell) but doesn’t have sufficient orders of other types, thereby leading to an imbalance. 
  12. Income Stock-A type of equity share that has a well-established record of paying out gradually increasing or steady dividends on a consistent basis.
  13. Insider Trading-When company insiders, usually directors or management deal in their own stocks. This type of trading is legal if the insiders keep the securities commission (SEBI or USSEC) posted about the same or else the same is unlawful.
  14. Jackpot- When you sell stocks of a specific company or different firms at a record price that results in a windfall. The action is akin to winning the top purse in a lottery.
  15. Junior Equity-common stocks that yield low dividends on a regular basis.
  16. K-Ratio-A metric for calculating and estimating a particular equity’s performance vis-à-vis its risk over an extended time period.
  17.  Laddering-The canvassing of hyped-up IPOs with a view to receive a higher share of the offering.
  18. Leverage-The strategy of exploiting borrowed capital for financing investments with the aim of broadening a company’s asset base. Investors, brokers, and traders take advantage of leverage for better ROIs.


It is beyond the scope of this article to enumerate all the stock market expressions that are used in day-to-day trading. After going through the above list, you can research on the net about the full list of stock market terminologies.


Important Stock Market

How to start trading in stock markets?

Trading or investing in stocks, bonds, debentures, and shares continues to be one of the most prospective means of earning handsome ROIs. The number of seasoned investors who’ve made their fortunes in stock markets reads like a who’s who list-Warren Buffett, George Soros, Jesse Livermore, Jim Rogers, and John Paulson. The phenomenal successes of these legendary investors could give you the impression that dabbling with stocks is uncomplicated and that everything is hunky-dory in the world of stock markets.  

Be in the know that stock markets, like any other kind of financial market, including bond market and forex market, are subject to economic forces. Demand and supply-the two basic canons of economics influence the behavior of stocks, shares, and other kinds of securities. Regardless of whether you want to invest in shares with a view to increase your earnings in the long run or become a successful stockbroker, it is essential to learn the basics of stock trading.

Mastering the tools and techniques pertaining to transacting in stocks will go a long way in enabling you to trade with confidence. Make the most of the following 6 tips in order to become a veteran in stock markets. 

Develop a sound understanding of stock markets

Obviously, the best and most effective way of gaining a good understanding of a stock market is to study the market thoroughly. For a start, be aware that a company’s stocks represent the establishment’s earnings and assets and reflect its financial health. On the other hand, a share is the smallest unit of a stock that is traded in the stock market or bourse.

For transacting, you’ll need to buy (or sell) the minimum prescribed or prefixed lot of shares. The trading takes place on an exchange, for instance the London Stock Exchange or NYSE (New York Stock Exchange). Each and every stock market around the world remains open for a fixed number of hours.

Nevertheless, you can buy and/or sell shares before or after the scheduled trading hours. Your aim would be to sell different stocks at prices higher than you bought them in order to make a profit. However, bear in mind that stock prices fluctuate continuously and widely.

You could either wait for share prices to soar before selling or trade them with the expectation that you’ll buyback when prices are exceedingly low (short selling). You’ll have to study stock charts, acquaint yourself with innumerable terminologies, and learn to exploit various techniques and apps to comprehend stock markets.

Understand how celebrated investors dealt with stock markets

The greatest investors and traders of the past and present did not become specialists overnight. Rather, the likes of Peter Lynch or John Templeton had to struggle for years on end in order to accomplish what they did. Therefore, if you follow in their footsteps and get to the bottom of how Warren Buffett or Nick Leeson mastered stock trading, you’ll feel inspired. 

Realize why you want to trade in stocks and shares: Establish your goals

People deal with or delve into stock markets for various reasons. The majority of individuals check out stocks and bonds with the objective of supplementing their present earnings. A significant proportion wish to establish a career out of stock trading- efficient stockbrokers, financiers, and entrepreneurs.

Another group-mostly high-school, college, and university students-have to complete a project on stock markets. So, it is up to you to decide why you want to explore stocks or shares.

Subscribe to a course and attend classes

Attending workshops or signing up for an awareness program will definitely help you to pick up the nitty-gritty of share trade. You can also attend seminars where successful traders speak about their experiences. Since you may have to pay for the workshops and seminars, crosscheck the authenticity of the courses or programs. 

Register with a certified stockbroker or trading platform

Perhaps the best way to test your trading skills is to register with a certified stockbroker who has a reliable trading platform. A broker help smoothen the process of transactions between and amongst market participants. Choose your broker carefully, depending upon whether you wish to excel in day or swing trading in the short run or invest on a long-term basis.

Opt for a trial offer

An established stockbroker might allow you to start trading with a demo account for a stipulated period. You can take advantage of this offer so as to feel confident about trading once you open your account. Find out if your broker gives you the option of trading online in order to practice and become a pro.

The takeaway

Handling stocks and grappling with stock markets can be remarkably thrilling as well as challenging as rewards and risks go hand-in-hand. Remember that all successful investors and traders started small and had to persevere immensely before making it. So, there’s no reason why you won’t be successful if you’re willing to invest time and efforts, besides your money.


Important Stock Market

Fundamental Vs. Technical Analysis: Which is Better?

Two schools of analysis that has been ruling the securities markets are Technical and Fundamental Analysis. While technical analysis considers the price trends of security, Fundamental analysis takes a look at two factors namely the economic as well as financial developments. Both schools help in predicting the future price movements of a particular security. To understand both better and see how to best use these for your benefit, we have summarized the differences and their significances below.

Tools to Trade

Fundamental analysts use the financial statements to start with; technical analysts start the analysis with charts. The overall goal of the fundamental analyst is to evaluate the value of a company by considering its present financial strength depicted through the income statements, balance sheet, cash flow statement, etc. We may also term this as an approach of quantifying the intrinsic value of the company after discounting value of the anticipated projected cash flows to the Net Present Value. A security trading below the intrinsic value offers a better investment opportunity.

Speaking about the technical analysts, their approach is quite different but with the same idea to predict the future possibilities of a particular security. However, instead of analyzing the financial statements they consider the price movements. It is believed that the impact of the statements is reflected in the pricing trends of the security. The price movements are thus analyzed using different charts that hint about the direction in which the price is headed.

The Time Horizon

Usually, the period used by the financial analysts is long term as compared to a shorter period in case of technical analysts. Delimiting stock charts concerning weeks, several days or minutes is possible. On the other hand, fundamental analysts check the data throughout several quarters or even years.

The duration that fundamentally-focussed investors wait before the intrinsic value gets visible in the market is much longer. For instance, the value investors assume that a market has been mispricing the security over the shorter-term, but the price is set to correct itself over the longer-term.

Investors considering fundamental analysis rely on the financial statements released by the company over a quarter along with the EPS which doesn’t change on a periodical basis like the price or volume trends.

It should be noted that a company cannot implement drastic changes overnight and it takes a considerable amount of time for creating new products, marketing campaigns and associated strategies for improving the business scenario. As fundamental analysts use the longer timeframe, the data used for analysing the stock gets generated much slowly as compared to the price and volume data that are used for technical analysis.

Ultimate Goals

Both fundamental and technical analysis has two different goals. The purpose of the technical analyst is to identify the various short to medium term trades that can lead to changes in pricing. On the other hand, fundamental analysts try making long term investments based on the underlying business of a particular stock. The best approach for conceptualizing differences is comparing the scenario to a situation where a person buys a home for immediate needs against a person buying a home for his future.

Critics of Both Types of Analysis

Some critics believe that no substantial basis proves the validity of technical analysis. They keep on questioning the validity of this discipline to a point where they end up mocking the supporters. Usually, Wall Street analyst considers fundamentals but most of the brokerage firms give equal weight to technical analysis. Several professional certifications are being offered for technical analysis wherein some of these have also been included in the CFA examinations.

Among the most popular critics is the one that focuses on the Efficient Market Hypothesis. It states that past trading information is a perfect reflection of the price of a particular stock. Another hypothesis of strong form efficiency believes that both types of analysis are of no use as entire information in the financial market is reflected in the stock’s price.

Concluding Remarks

Although both technical and fundamental analysis is viewed as opposite approaches for analyzing stock prices, investors usually combine both the techniques. An example of this approach is evident from the approach where the investor uses fundamental analysis for identifying a particular undervalued stock in addition to estimating a specific entry and exit price for the present position. In a situation where security is oversold, this combination works well as entering a position early can prove to be costly.

On the contrary, some technical traders often consider fundamentals for supporting their trades. It is possible that a trader is waiting for a breakout around the earnings report and looking at the fundamentals for an idea if a stock is looking to beat its earnings. The idea to mix technical analysis with fundamental analysis is not always well-considered by members of both the groups. However, there are benefits attached to both the schools.

Important Stock Market

A career as a stockbroker or stock trader can be fulfilling and rewarding

If you hold a degree in finance and take an unusual interest in NASDAQ, FTSE 100, Sensex, and Nikkei 225, then you should set your sights on becoming a stockbroker. Stockbrokers and traders earn their bread and butter by transacting in company stocks chiefly on behalf of their clients. Registered stockbrokers have the license to buy and/or sell stocks as representative of their clientele.

Licensed stock traders and brokers have a sound understanding of the stock markets that comes in perfectly handy, enabling them to advise clients on trading. Since the stock markets tend to be extremely capricious and unpredictable, stock brokers have to keep themselves constantly updated. The main objective of stock traders is to place as many as trades as possible as they receive a commission on a successful trade. Stock brokers earn their livelihood chiefly from commissions and fees on trades.

Distinguishing between a stockbroker and stock trader

Assuming that you’re aiming to be a stockbroker, it is significant to understand the distinction between a trader and stockbroker. Having a clear idea about the differences or variations in job profiles of a stockbroker and trader will enable you to decide which career would be apt for you. Though both types of professionals trade in securities, brokers also function as sales agents either independently or on behalf of a brokerage.

Brokers maintain a directory or list of individual and institutional clients and place trades on their behalf while traders work in a bank, stock exchange, or investment firm. Traders manage securities for the investment firm or bank they work for.  Brokers are directly in touch with their customers and place trades as per the latter’s wishes.

Many stockbrokers manage portfolios of their clients, offering valuable advice on matters pertaining to insurance, retirement program, and wealth management.

Traders generally work under portfolio managers and assist the latter in supervising and managing specific accounts, helping develop a sound investment strategy for some clients. These professionals handle different financial markets including commodities, derivatives, bonds, forex, and stocks. Both stockbrokers and traders need to have the FINRA (Financial Industry Regulatory Authority) license for operating as a sales agent.   

And for obtaining the FINRA license, traders and stockbrokers have to appear for the ‘Securities Trader Qualification Examination’ and ‘General Securities Registered Representative Examination’ respectively.   

Career prospects as a stockbroker

If you’re aspiring to become a stockbroker, you’d be pleased to learn that most brokers’ get salaries way beyond the national median income. Nevertheless, several factors will determine your earnings as a broker, including your location, educational qualifications, expertise level, and professional experience. On the other hand, if you’re employed by a brokerage or securities firm of national repute, you can expect a lucrative pay package.

Contrary to popular belief, there is a heavy demand for stockbrokers throughout the US. As a matter of fact, the level of demand for stock market brokers and sales agents is much higher than other analogous or related professions in the financial sector.        

Steps to follow in order to become a stockbroker

You’d at least need to have a high school certificate or diploma to launch your career as a broker. However, possessing an undergraduate or postgraduate degree will enable you to climb the career ladder at a faster rate. Abide by the following steps to make it as a stockbroker:-

A high school certificate is a must

Though you do not need to be a graduate or postgraduate in order to work as a broker, having higher academic qualifications offers you a competitive edge. Majority of the reputed firms give preference to those postgraduate and graduate candidates when it comes to hiring fresh recruits. So, you should set your sights on receiving a college or university degree.

And in order to apply for a graduate degree, you’d need to have a high school certificate.  

Obtaining a bachelor’s degree will give a fillip to your career

You’d at least need to be a graduate to be considered for an entry-level sales position in a registered commodities, securities or brokerage. This stipulation has been prescribed by BLS (Bureau of Labor Statistics). While applying for a graduate study program, you may not have to opt for a major.

Nevertheless, completing a major, particularly in the financial or business stream gives you additional advantage. A degree in economics, finance, business or accounting is especially suitable for this profession.

Apply for an internship in a well-known brokerage or investment firm

After completing your graduation, you could apply for an internship position in a firm. Having experience as a intern or trainee will work to your advantage, letting you land a position in a big company.

Working for a firm will pave the way for receiving a FINRA license

Make sure that the brokerage firm you want to work for or do an internship in is FINRA registered. You’ll need to be involved with a brokerage listed on FINRA so as to qualify for the FINRA test.

Make sure you sit for the FINRA exam and clear the same

Each and every US state conducts the FINRA exams. If you want to get the FINRA license for trading as a broker, you’ll have to clear the Series 63 and Series 7 tests.





stock market terminologies
Important stock market terminologies

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