STOCK MARKET TRADING

MODULE 1

LESSON 1- THE OPENING BELL

OBJECTIVES-

 TRADING VS INVESTING
 MARKET BASICS
 DIFFERENT TYPES OF MARKETS

TRADING

 BUYING OR SELLING FOR SHORT TERM PROFIT GAIN

 CAN MAKE MONEY IN UPWARD & DOWNWARD MOVING MARKETS (CFD)
 USE TECHNICAL ANALYSIS
 RELIES ON VOLATILITY TO MOVE PRICE OVER SHORT PERIODS OF TIME
 DON’T HAVE TO OWN INSTUMENT TO TRADE IT

INVESTING

 ACTION OF BUYING FOR LONG TERM GAINS

 BASED ON FUTURE VALUE
 FUNDAMENTAL ANALYSIS
 NEEDS LONG TERM GROWTH
 MUST OWN INSTRUMENTS
 SENSITIVE TO NEWS

THE 3 MAIN CONTRIBUTORS TO EMOTIONAL BUYING AND SELLING IN THE MARKET

 HOPE
 FEAR
 GREED
SUCCESSFUL TRADING IS ALL ABOUT

 HAVING A TRADING PLAN

 STRATEGY BASED TRADING
 CONSTANTLY UPGRADING YOUR SKILLS

FINACIAL ACCESS

 ONLINE TRADING GIVES YOU THE ABILITY TO SPECULATE ON FUTURE PRICE MOVEMENTS
 24 HOURS, 5 DAYS A WEEK
 OTHER MARKETS HAVE AN OPEN AND CLOSING TIME AS THEY ARE TRADED ON EXCHANGE
 TO BE SUCCESSFUL IN TRADING YOU NEED TO KNOW WHAT YOU ARE DOING – YOU NEED TO
LEARN HOW TO IDENTIFY QUALITY OUT OF QUANTITY

TO SUCCESSFULLY TRADE, YOU NEED TO KNOW

 WHAT WE CAN TRADE

 WHO ELSE IS TRADING
 WHEN DO WE TRADE
 HOW DO WE ACTUALLY TRADE

COMMODITIES

 ENERGIES- WTI OIL CRUDE & BRENT NATURAL GAS

 PRECIOUS METALS- GOLD/SILVER/ PLATINUM/COPPER
 SOFT COMMODITIES- COFFEE/CORN/SOY BEAN/ WHEAT
 SOFT COMMODITIES- SUGAR/COCOA/LIVESTOCK

1. ENERGIES
HIGHLY VOLATILE FOR TWO MAJOR FACTORS
 LOCATION- OFTEN PRODUCED IN REGIONS OF ECONOMIC AND POLITICAL INSTABULITY
CREATING DIFFICULTIES FOR SUPPLY AND DEMAND
 GLOBAL OUTLOOK- MACRO ECONOMICS DICTATE ASSUMED FUTURE
DEMAND(INTEREST RATES AND NATIONAL PRODUCTUON RATE)
 PRECIOUS METALS
VOLATILE #19M*19M*19M CUBE OF GOLD IS THE TOTAL AMOUNT WORLDWIDE

LESSON 2- LEVERAGE, MARGIN & ALL THE JARGON

OBJECTIVE

1. WHAT DIRECTION THE MARKET IS MOVING

2. CANDLESTICK FORMATIONS AND THE PRICE ACTION PATTERNS THEY ILLUSTRATE
3. THE CORE CONCEPTS OF MARGIN AND LEVERAGE

WHEN WE SAY BUY, YOU ARENT ACTUALLY PURCHASING ANYTHING

WHEN YOU BUY OR SELL YOU ARE SPECULATING

DECISIONS ARE BASED ON AN INDICATION OF FUTURE PRICE MOVEMENTS

ANALYSIS AND STRATEGY BASED TRADING IS ESSENTIAL

UPWARD PRICE MOVEMENTS/BULLISH MOVEMENT

#BUYERS BAR IS WHEN BUYERS HOLD MORE POWER THAN THE SELLER IN THAT PERIOD OF TIME AND
MANAGES TO PUSH THE CLOSE HIGHER THAN THE WAY THE BUYER INITIALLY OPENED

CLOSE ABOVE THE OPEN = GREEN / BUYERS BAR

CLOSE BELOW THE OPEN = RED / SELLERS BAR

USING EMA (EXPONENTIAL MOVING AVERAGE) IS THE BEST WAY TO DETERMINE THE DIRECTIONAL
TREND BIAS

AN EMA CAN BE CREATED USING ANY NUMBER-

EMA NUMBER DETERMINES NUMBER OF BARS IN CONSIDERATION

8 EMA = 8 bars and a 61 EMA = 61 bars etc.

Smaller number is the FAST EMA and Larger number is the SLOW EMA

Colors of EMA’s are irrelevant

#using the EMA’s to spot an upward trend:

1. When using the EMA’s you can spot the uptrend when the fast EMA is Above the slow EMA
2. Eg= 5 EMA above the 10 EMA

#using the EMA’s to spot a downward trend:

1. When using the EMA’s you can spot the downtrend when the fast EMA is BELOW the slow
EMA
2. Eg= 5EMA below the 10EMA