Course Content
Introduction
The stock market is a marketplace where shares of publicly listed companies are bought and sold. It plays a central role in the modern economy, acting as a bridge between businesses that need capital and investors who have money to invest. The origins of the stock market trace back to the early 1600s, when the Dutch East India Company issued the first shares on the Amsterdam Stock Exchange. This allowed the company to raise money from the public to fund its trade ventures, in return for a share of the profits. Over time, this concept evolved, and today, stock markets exist all over the world, with major exchanges like the New York Stock Exchange (NYSE), NASDAQ, and London Stock Exchange facilitating trillions of dollars in trade. At its core, the stock market enables businesses to grow. By offering shares to the public through a process called an Initial Public Offering (IPO), companies can raise large amounts of money to expand operations, invest in research, or develop new products—without having to rely solely on banks or private lenders. In return, investors get the opportunity to share in the company’s success through rising share prices and dividends. Investing in the stock market can be a powerful way to build wealth over time. Wise investments in strong companies can generate solid returns, especially when held for the long term. Many individuals have grown their savings substantially by investing in companies that have thrived. However, it’s important to remember that the stock market carries risks. Prices can go up, but they can also go down—sometimes sharply. Economic downturns, company mismanagement, or shifts in the global market can all lead to losses. For beginners, it's essential to approach investing with caution, avoid chasing “get rich quick” schemes, and take the time to understand what you're investing in. In short, the stock market is a powerful tool for economic growth and personal financial development—but like all tools, it must be used wisely.
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Introduction
Stock Markets Around The World
Listing On A Stock Market
How Stocks are Bought and Sold
Trade Date vs Settlement Date, What is T + 2?
What Is A Stock Market Index?
ETF’s and Index Funds
Fundamental Analysis
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Fundamental Analysis Introduction
Understanding Revenue and Profit
Earnings Per Share and PE Ratio
Understanding the Balance Sheet
Understanding Cashflow
Dividends – How Investors Earn Income From Their Shares
What Causes Stock Prices To Rise And Fall
Understanding Market Capitalization
Technical Analysis
Along with Fundamental Analysis, Investors increasingly rely on Technical Analysis to decide whether to buy or sell a stock. Here we will explore the main techniques.
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Introduction to Technical Analysis
How To Read A Price Chart – The Basics
Understanding Support and Resistance Levels
Identifying Trends and Drawing Trendlines
Understanding Moving Averages
Introduction to Momentum Indicators
Chart Patterns – Spotting Setups in the Market
Volume – The Power Behind a Price Movement
Investing Safely and Profitably
How do professionals invest safely and profitably? Some key concepts such as position sizing and stop losses.
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How To Place Trades And Manage Risk
Using A Trailing Stop To Protect Profits and Limit Loss
Diversification and Portfolio Management
Taking Profits
Common Investor Mistakes And How To Avoid Them
A Quick Word On Taxes
Summary and Beginner’s Checklist
10 Must Read Books for Investors and Traders
Beginners guide to investing in the Stock Market

How To Place Trades And Manage Risk

 

Once you’ve found a stock you want to buy or sell based on your research or chart analysis, the next step is to place the trade and manage the risk involved.

 

This part of the course introduces:

  • Types of orders

  • Setting entry and exit points

  • Managing risk using stop-losses and position sizing

  • The importance of protecting your capital

 

 

How to Place a Trade – Order Types

 

When placing a trade, you’ll usually choose from the following order types:

 

1. Market Order

  • Buys or sells the stock immediately at the best available price

  • Fast and simple

  • Risk: Price might slip if the market is moving quickly

 

2. Limit Order

  • Buys or sells only at a specific price or better

  • Offers more control, but may not get filled if price moves away

 

Example:
You want to buy a stock at $50 — you can place a limit buy order at $50. If the price stays above that, the order won’t execute.

 

3. Stop Order (Stop-Loss)

  • Automatically triggers a market order when the stock hits a certain price

  • Used to limit your losses

 

Example:
If you bought a stock at $40, you might place a stop-loss at $36 to cap your potential loss.

 

 

Entry and Exit Strategy

 

Every trade should have:

  • A clear reason to enter (e.g., chart pattern, breakout, trend)

  • A target price (take-profit)

  • A stop-loss price (maximum acceptable loss)

 

This is often called a trading plan — and it helps remove emotion from decision-making.

 

 

Managing Risk – The #1 Rule of Trading

 

“Never risk more than you can afford to lose.”

 

To stay in the game long-term, managing risk is more important than picking winners.

 

Here’s how:

 

 

1. Stop-Loss Orders

 

  • A stop-loss is a protective order that closes your trade if the price moves too far against you

  • It helps prevent small losses from becoming big ones

  • Placed just below support (for long positions) or above resistance (for shorts)

 

You can also use trailing stops, which follow the price as it moves in your favour

 

 

2. Position Sizing

 

Decide how much money to risk per trade.
Most traders follow the 1% rule:

 

  • Risk no more than 1% of your total capital on any single trade

 

Example:
If your account has $5,000, then you’d risk no more than $50 per trade.


If your stop-loss is $2 per share, you’d only buy 25 shares ($50 ÷ $2).

 

 

3. Risk-Reward Ratio

 

Before you take a trade, compare your potential reward to your risk.

 

A good rule is a minimum 2:1 ratio:

  • If you’re risking $50, try to make at least $100

 

This means even if you’re right only 50% of the time, you can still grow your account over time.

 

 

Summary Checklist for Placing a Trade

✅ Clear reason to enter
✅ Use a limit order or market order to open the trade
✅ Set a stop-loss to protect capital
✅ Set a take-profit level or use a trailing stop
✅ Calculate position size based on risk tolerance
✅ Aim for a strong risk-reward ratio (at least 2:1)

 

 

Summary

 

Placing trades is more than clicking “Buy” or “Sell” — it’s about having a plan, managing your risk, and staying disciplined.


Key tools include:

  • Market and limit orders

  • Stop-losses and trailing stops

  • Position sizing

  • Risk/reward analysis

 

Mastering these techniques protects your capital and helps you trade with confidence and consistency.

 

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Stock Market Course