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

Taking Profits

 

It’s easy to fall into the trap of always waiting for “just a little more” — but experienced investors know that locking in gains is essential to long-term success.

 

Whether you’re trading short-term or investing for the long haul, having a plan to take profits:

 

  • Protects you from reversals

  • Removes emotion

  • Helps you grow your portfolio consistently

 

 

Why Take Profits?

 

  1. The market moves in cycles — gains are never guaranteed to last

  2. Unrealised gains can disappear if you don’t exit in time

  3. Helps you follow your strategy, not your emotions

 

 

When to Take Profits

 

There’s no single rule, but here are common strategies:

 

 

1. Set a Profit Target

 

  • Before entering a trade or investment, decide:

    • What is your exit price or % return goal?

    • What is your risk-reward ratio?

 

Example:
You risk $100 and aim to gain $200 — that’s a 2:1 reward-to-risk.
When the price hits your target, take the profit — no hesitation.

 

 

2. Sell in Portions

 

You don’t have to sell everything at once.
This strategy helps you:

  • Lock in partial profits

  • Let the rest run if the trend continues

 

Example:

  • Sell 50% when you’re up 20%

  • Hold the rest with a trailing stop to catch more upside

 

 

3. Sell at Resistance Levels

 

Use technical analysis to identify key resistance or psychological price levels (e.g., round numbers like $100).

 

If price approaches those levels and volume weakens, it may be time to take profits.

 

 

4. Use a Trailing Stop to Ride the Trend

 

A trailing stop moves up as the stock rises.


If the price reverses, your position is automatically sold — locking in profits while allowing further upside.

 

This is a great way to let winners run while still protecting gains.

 

 

5. Fundamental Shift or News Event

 

If the company’s fundamentals deteriorate (e.g., poor earnings, management changes), or there’s negative news, it may be a good time to exit — even if you’re still in profit.

 

 

Balancing Greed and Discipline

 

Taking profits too early can limit gains.


Holding too long can lead to giving profits back.


That’s why having a defined exit strategy — and sticking to it — is key.

 

Tip: Don’t try to catch the exact top. As the saying goes:

“You’ll never go broke taking a profit.”

 

 

Summary – How to Take Profits Wisely

 

Strategy Description
Profit Target Sell at a pre-defined % gain or price level
Sell in Portions Take profits gradually to balance risk/reward
Sell at Resistance Use chart levels as smart exit zones
Trailing Stop Automatically lock in gains as price rises
Fundamental Changes Exit early if company outlook weakens

 

Profit-taking is about discipline, not perfection.


By having a plan before you enter a position, you avoid emotional decision-making and stay focused on your long-term strategy.

 

 

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Stock Market Course