How to Generate Regular Income from Stock Market

How to generate regular income from stock market

Majority of the people always think of investing in a stock market as ‘Gambling’. Majority of the people also don’t believe that they can generate income consistently from the stock market itself. That is why you might have seen trading QnA blogs and forums flooded with questions like “How can I generate regular income from short term trading”, “Can traders become millionaires?”, “Is investing in stock market safe?” and so on.

In this article, we’re going to discuss some tips that can help a novice trader/investor like you, who is new to the market and looking to generate a steady income by investing in stocks.

Do not invest in Mutual Funds

While you may have heard of many people talking about how they’ve invested millions of dollars of their savings in mutual funds, it is not necessary for you to follow their advice!

Mutual funds are for those who don’t know anything about stock markets or don’t want to know. They are handled by experts and are generally suitable for those who’ve parked their money for a long duration. There are short term mutual funds too, but investing in any fund would mean that you’re trusting someone else to invest your hard-earned money. Not that it’s wrong in any way, but you wouldn’t gain any knowledge about the markets if you do that. Also, short term mutual funds often have a lock-in period (3 months). So technically, you’d be charged some extra bucks if you tried to redeem your investments before that stipulated time period.

Hence, you’d have to completely avoid investing in mutual funds if you’re trying to generate income consistently.

Learn the basics terms used in Stock Markets

This idea would be obvious to you, however, many people don’t realise learning about the markets first and then investing. The result? Huge losses. These are the people who then label investing in the stock market as gambling.

Nobody ever became successful in a skill without learning anything about it. Be it shooting an arrow, playing Football or learning Math, if you want to earn from that skill, you’ve got to learn about it first. And to be clear we’re not suggesting to learn everything about stock markets here. Simple terms and their significance in the market can help you quickly make your way through achieving small income daily from the stock market.

Terms like Large Cap, Mid Cap, Small Caps and their importance in the stock market can give you ideas about some stocks that are not that volatile and can generate steady profits in a short span of time.

Find a mentor

A mentor is someone who can guide you in understanding the stock market in an easier way. They often teach you about concepts and basics of how chart patterns work and what should you learn about a particular stock before investing all of your money in it. They are just like teachers who lay down a path for you (like a course curriculum) so that you know what chapter to move on after reading and practising the existing chapter. Some mentors also give inputs (buy/sell call) and their strategies on trading a particular stock the next day, because they can foresee a possible momentum in the stock. You should bag every chance of understanding what they’re trying to say and why do they believe the stock would experience a huge momentum in some days.

Also, nowadays, there are mentors who do personalised coaching and who can support you and answer your queries. So yes, having a mentor that you can look up to definitely helps in the learning.

Useful terms to consider

Delivery Percentage is just another term in the stock market that you can look up to for taking short term trades. This term is highly underrated but it can give you an insight into whether the stock is going to go up or not. Delivery percentage means the number of people who have invested in the stock instead of buying and selling it on the same day. You know there is something cooking up when you see the average delivery percentage shoot up from 50% to 80% (this means people are investing in this stock heavily).

Volume is a great indicator which can tell you a lot about the movement of the stock. We’ve discussed briefly about Volume in this PDF. An increase in volume means that a huge momentum is taking place while at the same time if the volume remains stagnant for a few sessions, it is assumed that the stock is consolidating and going sideways.

Support and Resistance is another important term to consider if you’re looking to trade in the market. Marking support and resistance levels is crucial if you want your trade to be a profitable one. Almost every trader uses/analyses support and resistance levels before taking up any position.

Lastly, knowledge about candlesticks is must if you want to survive in this game. It is rightly said that every candlestick which is formed on the chart has some story behind it. It is also true that by studying the latest candlestick that is formed on the chart, you can predict where the price of the stock might move next.


We really hope this article gives you an insight on how to generate regular income from the stock market. If you’re looking for some more knowledge/tips and tricks, then download our free PDF on Price Action Strategies.

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