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

Identifying Trends and Drawing Trendlines

 

In technical analysis, “the trend is your friend” is one of the most well-known sayings.


That’s because recognising the direction of a trend helps investors and traders decide:

  • When to buy

  • When to sell

  • When to stay out of the market

 

Trendlines are visual tools that help you see and follow these trends more clearly.

 

 

What Is a Trend?

 

A trend is the general direction in which a stock’s price is moving over time.

There are 3 main types:

 

Trend Type Description
Uptrend Price makes higher highs and higher lows
Downtrend Price makes lower highs and lower lows
Sideways Price moves within a range (also called consolidation or “chop”)

 

What Is a Trendline?

 

A trendline is a straight line drawn on a chart to visually connect a series of:

  • Higher lows in an uptrend

  • Lower highs in a downtrend

 

It helps you spot the trend and predict where price might find support or resistance in the future.

 

 

How to Draw a Trendline

 

In an Uptrend:

  • Connect at least two or three higher lows

  • Draw the line below the price, sloping upwards

  • Acts as a support level

 

In a Downtrend:

  • Connect at least two or three lower highs

  • Draw the line above the price, sloping downwards

  • Acts as a resistance level

 

The more times price touches the trendline without breaking it, the stronger the trendline becomes.

 

 

Trend Continuation vs. Trend Reversal

 

  • Continuation: The price continues in the same direction after a short pause or pullback.

  • Reversal: The trend weakens and then moves in the opposite direction.

 

Watch for a break of the trendline on strong volume — this may indicate a potential trend reversal.

 

 

Recognising Trend Strength

 

  • Steeper trendlines may look exciting but can be fragile and easily broken.

  • A gradual trend is usually more sustainable over time.

  • Confirm trends with higher volume during moves in the trend’s direction.

 

 

Using Trends in Practice

  • Buy in an uptrend (buy the dips)

  • Avoid or short in a downtrend (sell the rallies)

  • Wait during sideways markets (low probability, uncertain direction)

  • Combine trendlines with support/resistance, moving averages, or indicators for better confirmation.

 

 

Summary

 

  • Trends show the direction of price over time: up, down, or sideways.

  • Trendlines are simple tools to visually guide your decisions.

  • In uptrends, look to buy pullbacks to the trendline; in downtrends, avoid buying or look for short opportunities.

  • Trends can break, so watch for warning signs like volume spikes or failed rallies.

 

Learning to recognise trends gives you an edge by helping you trade with the market, not against it.

 

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Stock Market Course