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Share trading is the best way to make money. But for that, you need to understand the basics of the stock market and learn how to buy shares in pakistan. Because if you doing something wrong or step in without proper knowledge,
Then you can easily lose your all money. I don’t think that’s the right way. So first learn the basics and then step into the market. Don’t worry after this article you will know everything, that you need to learn to become a share trader.
So if you want to buy a share then you need to follow these steps:
- Open a PSX account through a broker
- Deposit your money
- Analyse stocks
- Buy your favorite stocks
These are some steps that you need to take to buy shares. But that’s not I will share with you more information from basic to advanced. That helps you to understand the real fundamentals of the stock market.
What is Stock Market
The stock market is a marketplace where buyers and sellers come together and trade public companies’ shares. A share is the partnership of any company that you buy after paying the price of shares. That is set by the company after analyzing a lot of ratios.
Now let’s understand companies. Basically, there are three types of companies. SMC Private Limited, Private Limited, and Public Limited.
SMC is a signal-member company that has only one director and a whole company managed by him. A private limited company has a minimum of 2 directors and a maximum of 50 directors. But a public company has a minimum of 3 directors and doesn’t have a maximum limit.
Now understand you only buy a public limited company shares. The company wants money and that’s why the directors offer shares to the public for buying.
Every country has its own stock marketplace. like PSX ( Pakistan Stock Exchange ) NYSE ( New York Stock Exchange ) and many more. You can buy shares of any company easily by opening an account on any stock exchange.
But in this article, I only discuss PSX, because you can easily start trading or investing in pakistan. But for other exchanges, you need to face some issues to open an account through Pakistan.
How to buy shares in pakistan
Now let’s talk about how you can buy shares in pakistan. Now I will share with you some points that you need to follow to buy shares in Pakistan.
1. Learn the Basics of Share Trading & Investing
Before investing first you need to learn how to invest buy stocks. Because in stock you invest your money and if something goes wrong you lose your money. Also, you need to learn the types of trading. Because in share trading there are 8 types.
- Day trading
- Scalping trading
- Momentum trading
- Contrarian trading
- Swing trading
- Position trading
- Algorithmic Trading
- High-frequency trading
These are the types of trading, Learn each and every type and then choose, which type of trading you need to do. After choosing the way, learn fundamentals and technical analyses. because these are the two most important pillars in share trading.
2. Open Brokerage Account
First of all, I tell you something you can’t trade directly in PSX. First, you need a broker who help you to trade your shares in PSX. So After gaining proper knowledge now it’s time to open your brokerage account. But for that, you need to follow some steps that I will add.
Select a Reliable Brokerage Firm: There are a lot of registered brokerage firms in PSX. But you need to choose one that help you to buy your share. I have used Ktrade for the last 3 years, With my experience Ktrade is the best brokerage firm. Also, Ktrade has its own app.
With this app, you can easily buy your own share. The feature I like about Ktrade is the daily updates. You can easily get your updates from Ktrade through notifications. But it’s my preference I suggest you first analyse and then choose a reliable brokerage firm.
Select Account and submit Necessary documents: After selecting brokerage firm now you need to contact the representative of your firm and ask to open an account.
Then the firm asks you to provide some documents for the process Like:
- CNIC ( National ID Card )
- Bank Account details
- Address verification
- Proof of income
Mostly these documents are the same, But if they require further documents submit them and start your account process. After some days your account opened now it’s time to start trading.
3. Transfer Funds
After opening your account now you need to transfer your money to your brokerage account for sharing buying. When I use Ktrade I transfer my money to the Ktrade account through the faysal bank app.
But it’s not at all that all brokerage firms provide you with a lot of ways to send money to their accounts. You can use any type of transaction method to send your amount.
After successfully sending the payment you need to tell and provide your payment proof to your firm. After verification, your amount will be added to your account.
4. Choose Stocks & Start Trade
After getting your balance in your trading account, Now it’s time to start trading and investing. Now this is the step where you need to learn. Because a wrong step makes you 0. So be careful and start in that industry. Where you have the knowledge, Because that help you a lot.
Like me with digital marketing, Blogging, and freelancing. I have a strong background in the medical feild, So when I started I chose medicine companies that trade publicly in pakistan. Like Searl Pharma, Abbot, Highnoon, and many more.
I chose it because I am known very well in our hospital we use medicine from these companies. Also, I ask all medical stores and pharmacies that operate in our city. Which company’s medicine do they sell most? So after analyzing, I see Searl Pharma, Highnoon, and GSK are the companies.
Where I need to invest, I collected the balance sheets of these companies to check the yearly stats of these companies. So after gaining all the fundamental information, I jumped into these companies and bought shares of all the companies I selected.
Trust me that’s a very good decision for me. I gain a lot of profits from these companies, especially from highnoon and searl pharma.
After crises the prices of shares down, But at that time I earned a good amount of money from trading and right now I hold seal phrma shares for the long term. So like me choose and invest in those industries that you like or where you have knowledge.
5. Research & Analyse market
For investing you need to learn how to analyse the balance sheet of any company. Because it a basic to understand the mission of the company. How the company works, how much money the company has, How many assets the company has, and many more.
After learning if you are able to learn the balance sheet of any company, Then your 80% work is done. After this learning, you are able to invest your money in any company.
But for trading with fundamental analyses, you need to do a technical analysis of all companies. Also, you need to learn how to analyse the whole market, and how to understand the mood of the market. So with trading don’t stop your learning. Daily consume content related to trading and investing. Because that helps your knowledge level and with that, you can easily increase your profits.
Start Trading with a low amount and then expand
With these 5 steps, you can easily start your investment or trading in the pakistan stock market/
Now I will provide you with some more information that also help you.
When you start you have no experience so I suggest you start with a low amount of money. Because if you lose you lose a small amount of money.
When you gain profits with a small amount then increase your trading amount slowly. Also learn how to use stop losses, because that saves you from big losses.
Stay patient and ready for the loss
Patience is most important in trading, Because if you can’t be patient you can lose your profits. In the start when I gain a little profit I sell it and book profits. But with time I learned patience is most important while trading. Now I will be calm while trading and setting my daily profits milestone.
Right now I set RS: 5000 daily profits milestone. When I achieve this I close the market and wait for the next day. Lastly, the most important tip is not to be greedy for money.
Set your daily profits milestone and when you achieve that don’t do more. Because money is not important with earning enjoy your life. Don’t take the stress and do all-time money, money, money. Just earn profits and enjoy your life.
Benefits of trading and investing
There are a lot of benefits that you get if you start investing or trading in the stock market. I Will tell you the benefits of trading and investing one by one.
Benefits of Trading
The best benefit that you get from trading is instant profits. In the beginning, I will provide you with types of trading. So you need to choose any type and work on it. Let’s suppose you choose day trading, That means you can earn profits every day.
If you learn stocks trading then you will find there are a lot of successful traders. Who earns a lot of money from trading.
Benefits of Investing
Trading has fewer benefits but investing has more benefits. For that lot of famous and successful businesses and investors suggest you invest not trading. Because with investing your wealth increases rapidly.
Because it’s a proven technique, Also with investing you will earn some amount of money on a yearly basis if you invest in dividend base stocks. Dividends are some amount of money that a lot of successful companies provide their investors.
I got 2 rupees per share last year from searl pharma shares. While learning I found a lot of successful investors who earn a handsome amount of money from dividends.
In trading, you need to take the stress and monitor the market every day. But while investing you don’t need to monitor the market every day. Just set your long-term profits goals and when your goals hit sell your stocks and get your profits.
What is a Dividend investment?
The dividend is the amount of money that a company pays to its shareholders. It’s a very good investment strategy. If you choose a high dividend paying stocks, Then after one year when you get your dividend, you can reinvest that into other companies.
If you want to build a passive income stream line from dividends, Then first you need to choose high dividend-paying stocks.
After choosing stocks you need to analyse the fundamentals of the company. Because for dividends you need to invest your money for the long term. So don’t be greedy for dividends. Before investing in any company, one must analyze everything. Then if you think the company has a potential then invest your money and get your dividends.
If you invest in these types of stocks you can get a lot of benefits like income stability, Passive income streamline, Income growth, Less risk, and many more.
Pakistan stock exchange brokers list
There are a lot of stock brokers, You need to choose on and then start investing or trading through that broker. But I will add some of the best traders list in this article. Everyone has their own Advantages and disadvantages so research before choosing.
|No||Stock Exchange brokers||Website|
These are the top 5 stock brokerage firms that I added to this list. But there are plenty of best other brokerages available. I will provide you a list you can check all broker’s details easily by clicking this link.
Top companies in Pakistan stock exchange
Iam not an expert but I will suggest you to companies for investment or trading based on my 3 years experience. But before investing do your own research.
|02||HighNoon Laboratories Ltd||HINL||7.74||2.38||20|
|05||Nestle Pakistan Ltd||MLKP||18.97||26.98||95|
|06||Fauji Fertilizer Company Limited||FAUF||3.78||1.05||4.26|
|07||Ferozsons Laboratories Limited||FERO||42.61||0.89||05|
|09||GlaxoSmithKline Pakistan Limited||GLAXO||12.87||1.18||07|
|10||Abbott Laboratories Limited||ABOT||29.52||2.34||15|
PE = Price to Earning Ratio
PB = Price to Book ratio
These are the 10 companies that I found and added to this list based on my experience. In this list, you will mostly find food and pharma companies. Because as you know I have experience in medicine. So I only invest in those companies where I have the knowledge and I like that company’s products.
But this is only 10 companies, But every year PSX make a list of trending company on every year. You can check that sheet by clicking here.
Can I buy 1 share?
Yes, you can buy one share from ODL Market. Basically stock exchange has two markets REG and ODL. In REG you only buy shares in a lot. But in ODL there are no limits.
Is stocks legal in Pakistan?
Yes, you can buy shares from the pakistan stock exchange easily from any legal issue.
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My name is DH and I am from Pakistan. I have 5 years of experience in digital marketing and SEO. I have done similar types of work on my blog and also for other clients. Now I make Money siren. A blog Where you learn how to make money online.