How to Make Money in Stock Market How to Make Money in Stock Market

How to Make Money in Stock Market

People think the stock market is a gift horse that keeps giving. Truth is, earning money from online stock trading is reserved for those with certain qualities and strategies. 

This blog will help you understand how to make money in the stock market. Whether you’re new or already know a bit about stocks, this guide has timeless strategies and ways to earn money in the share market daily.

The Basics of Earning Money from Stocks

Buy low, sell high – the simple mantra of making money from stocks that has been adopted across markets may seem simple, but it’s far from it. 

Yes, those who’ve entered the market during corrections or other low points may have a better return on their investment during market highs.

But how do you know when to enter and exit the market? That’s the first question you need to ask yourself. You have two options:

  • Fundamental Analysis: Look at the true value of a company to gauge its future potential 
  • Technical Analysis: Let mathematical tools guide you toward entering and exiting the market

The answer to this question is your first step towards earning money from stocks. There on, focus on these key points:

1. Do Your Research

Start with solid research. What industries are booming? Which companies are innovators in their field? Is the industry evolved or evolving? These questions can lead to a framework. 

Frameworks are important for you as an investor/trader as they lead to a structured approach to decision-making. You can refine the framework by adding fundamentals, financials, and other forms of research.

2. Make a Plan 

Once you have a framework, create a plan for execution. Along with research, your plan of action must factor in your goals. 

Goals in this case are purely financial. For example, investing in smallcap stocks for goals that are 5+ years into the future.  

Figure out what amount you’re comfortable investing and understand that losses are part of the journey. 

All stocks carry risks, and understanding your risk tolerance is key to not ending up in panic mode. The pillars here are thus:

  • Financial Goals
  • Investment Amount
  • Risk Tolerance
  • Plan of Action

3. Stay Cool

The market is a rollercoaster. If you react to every dip, you’ll end up exhausted and possibly broke. Set realistic expectations. 

Sometimes stocks go down, and sometimes they soar. Remember, patience is your friend here if you’re an investor. 

4. Keep Learning

This is a journey, remember? And in this journey, knowledge is your most valuable asset. 

Stay updated with market trends, learn from your hits and misses, and always be open to new strategies.

How to Make Money in the Stock Market?

There are various strategies for earning from the share market, each with its own approach and level of risk.

1. Long-Term Investing: Buy and Hold

Investors are a classic breed of stock market participants. They choose stocks with potential and keep them, sometimes for years or even decades. Or, they get invested in an index that tracks a basket of stocks.

Either way, the key ingredient is time. Time allows your money to work to its fullest potential with a little help from the magic of compounding. And markets are known to grow stronger over time. See the screenshot below.  

2. Day Trading: Enter Fast, Exit Faster

Intraday trading means buying and selling stocks on the same day, taking advantage of small price changes. These small gains can accumulate into large wins over time. 

For example, buying a share worth Rs. 500 at 11:00 AM and selling the same share at Rs. 510 at 2:15 PM is a classic example of day trading. 

But these gains are not guaranteed as day trading carries a higher degree of risk. As an active form of wealth creation, day trading requires you to be sharp and always switched on during market hours to navigate risks. 

Technical analysis will be your best friend if you’re looking to make money from intraday trading. We recently compiled a list of the best intraday trading strategies that you as a beginner can explore. 

3. Swing Trading: Ride the Price Swing

Swing traders look to profit from short to medium-term price swings. They typically hold positions for a few days to weeks, depending on the type of swing they’re chasing.

For instance, buying a stock at Rs. 1000 just before a company’s earnings call and riding the price swing until two weeks after the call when it reaches Rs. 1250. 

This means they have to take delivery of the stock they’re trading, and while they have the benefit of time on their side, swing traders will have to battle overnight and market risks.

Making the best use of technical and fundamental analysis thus becomes crucial for a swing trader. 

While it isn’t as intense as intraday trading, swing trading is the go-to strategy for those looking to capture short to medium term price movements with less stress and more flexibility.

4. Dividends: Relaxed Passive Income  

Pick stocks that pay dividends and have the potential to grow consistently over time. Dividends are typically distributed quarterly. 

This is the philosophy behind earning money from the highest dividend paying stocks. Not only is this a passive income idea, but also a way to earn money from the share market regularly. 

The returns may not be as thrilling as the others mentioned on this list. But dividends offer slow, steadily, and reliable gains that can help you fulfil various financial goals such as earning income after retirement. 

5. IPO Investing: Identify Gems

As you may know, an IPO is the process of offering shares to investors like you for the first time. That’s why an IPO or Inital Public Offering is your ticket to invest in companies early.

You bid on the IPO and if you’re lucky, your bid will translate into an allotment of shares. For example, buying Reliance Industries shares during its IPO in 1977. 

Great – but this comes with a high degree of risk. IPO companies are typically nascent and their future success depends on several factors. 

Thus, you must evaluate your risk profile and thoroughly analyze an IPO before choosing this as a way to make money from share market. 

Things to Avoid to Earn Money in Share Market

While there are strategies to follow, it’s equally important to be aware of common pitfalls that can hinder your success in the stock market. Avoid the following mistakes:

1. Acting on Unsolicited Tips

Relying on tips from friends or anonymous sources can lead to poor investment decisions. Always conduct your research.

2. Following the Crowd

Just because everyone else is buying a particular stock doesn’t mean it’s a good investment. Herd mentality can lead to losses. Do your own research, carve your own path. 

3. Not Doing Enough Research

A lack of research can result in poor investment choices. Understand the companies you invest in, their financial health, and their prospects.

4. Improper Risk Management

Failing to set stop-loss orders or investing more than you can afford to lose can be disastrous. Thus, you need to have risk mitigation measures.

5. Over-Leveraging Positions

Excessive borrowing to invest, known as leverage, can magnify losses. Use leverage cautiously, if at all.

Potential Risks of Stock Investing/Trading

While the stock market offers opportunities for wealth accumulation, it’s not without its risks. Understanding these risks is vital for successful investing:

1. Volatility

Stock prices can be highly volatile, subject to sudden and unpredictable fluctuations. This can lead to both substantial gains and losses.

2. Company-Based Risks

Individual companies can face financial difficulties or other issues that can impact their stock prices.

3. Lack of Liquidity

Some stocks may lack liquidity, making it difficult to buy or sell them without significantly affecting the stock’s price.

Why to Earn Money from the Stock Market?

The stock market offers you a way to make your money work, make it beat inflation, and make it earn more money for you so that you can meet a variety of financial goals. 

That’s the basic reason why people invest in the share market. That said, let’s take a look at more popular reasons why to invest in stocks. 

1. Passive Income

Investing in the stock market can provide a passive income source through dividends, allowing you to earn money regularly without actively trading.

2. Financial Independence

Successful stock market investing can lead to financial freedom in the long run, freeing you from the constraints of a traditional 9-to-5 job.

3. Build A Retirement Corpus

Investing in the stock market is a potential way to build a substantial retirement corpus. 

Over the years, compounding returns can grow your savings significantly, providing a secure and comfortable retirement nest egg.


While the stock market is a promised land of gains, there are no promises or guarantees of returns. Making money from shares is possible only if you apply your knowledge, mindset, and strategies the right way. 

Along the way, you must manage the risks that come with stock investing. Your journey is unique, and understanding this is your first step to stock market success.

P.S.: If you want to track how much money you’re making from stocks across all brokers, you can use this awesome feature on Dhan explained in the video below.