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

Introduction to Technical Analysis

 

Technical analysis is a method of evaluating stocks by looking at price charts and trading volume, rather than company fundamentals.


Instead of asking “Is the business doing well?”, technical analysts ask “What is the market doing — and what might it do next?”

 

The goal is to identify patterns in stock price movements that can help predict future direction — whether a stock is likely to go up, down, or move sideways.

 

 

Core Belief of Technical Analysis

 

“Price reflects everything.”
Technical analysts believe that all known information — including fundamentals, news, and investor sentiment — is already reflected in the stock price.

 

So instead of analysing earnings or balance sheets, they focus on:

  • Price trends

  • Chart patterns

  • Momentum

  • Trading signals

 

 

Key Concepts and Tools in Technical Analysis

 

Here’s an overview of the most commonly used technical tools and terms — we’ll explore each in more detail later:

 

 

1. Chart Patterns

 

These are recognizable shapes that appear in price charts and can suggest future movement.

 

Common patterns include:

  • Head and Shoulders

  • Double Top / Double Bottom

  • Triangles (ascending, descending, symmetrical)

  • Flags and Pennants

 

These patterns can indicate whether a stock is likely to continue in the same direction, or reverse.

 

 

2. Support and Resistance Levels

 

  • Support: A price level where a stock tends to stop falling — buyers come in.

  • Resistance: A level where a stock tends to stop rising — sellers step in.

 

These levels act like psychological barriers where price often “bounces” off.

 

Traders use these to set buy/sell targets, and to spot breakouts when price moves through them.

 

 

3. Trend Lines

 

Trend lines connect higher lows in an uptrend or lower highs in a downtrend to visually show a stock’s direction.

 

  • Uptrend: Higher highs and higher lows

  • Downtrend: Lower highs and lower lows

 

Identifying trends early can help traders ride the momentum.

 

 

4. Moving Averages

 

A moving average smooths out price movements by averaging closing prices over a period of time.

  • Simple Moving Average (SMA): Basic average over X days

  • Exponential Moving Average (EMA): More weight on recent prices

 

Used to identify trend direction and spot crossovers (when short-term and long-term averages cross, which may signal a change in trend).

 

 

5. Indicators and Oscillators

 

These are mathematical tools added to charts to give trading signals or confirm trends.

 

Common indicators include:

  • RSI (Relative Strength Index) – shows if a stock is overbought or oversold

  • MACD (Moving Average Convergence Divergence) – tracks momentum and trend shifts

  • Bollinger Bands – measures volatility and potential price breakouts

 

Many traders combine indicators with chart patterns for higher confidence.

 

 

How Technical Analysts Use These Tools

 

  • Identify buy and sell signals

  • Spot potential breakouts or breakdowns

  • Determine entry and exit points

  • Set stop-loss and take-profit levels

 

We’ll explore each of these in more detail in the pages ahead.

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Stock Market Course