What is stock market and technical analysis ?

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# **Stock Market and Technical Analysis – Class 1: Introduction to the Stock Market**

### **1️⃣ What is the Stock Market?**
The **stock market** is a marketplace where buyers and sellers trade shares of publicly listed companies. It serves as a platform for companies to raise capital and for investors to buy ownership in businesses.

🔹 **Key Stock Exchanges:**
- **NSE (National Stock Exchange) & BSE (Bombay Stock Exchange)** – India
- **NYSE (New York Stock Exchange) & NASDAQ** – USA
- **LSE (London Stock Exchange)** – UK

🔹 **Types of Stock Market Participants:**
✅ **Retail Traders** – Individual traders & investors
✅ **Institutional Investors** – Hedge funds, mutual funds, pension funds
✅ **Market Makers** – Provide liquidity by continuously buying and selling

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### **2️⃣ How Does the Stock Market Work?**
📌 **Primary Market:** Companies issue shares via **Initial Public Offerings (IPO)**.
📌 **Secondary Market:** Investors trade shares after listing on exchanges.
📌 **Market Hours:** Stock markets operate during fixed trading hours on weekdays.
📌 **Market Orders & Limit Orders:** Orders are placed through brokers to buy or sell stocks.

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## **Technical Analysis: The Foundation of Trading**

### **3️⃣ What is Technical Analysis?**
Technical analysis is the study of **price action, charts, and indicators** to predict future price movements. Unlike fundamental analysis, which evaluates a company’s financials, technical analysis focuses on historical price patterns and trading volume.

### 🔹 **4. Key Principles of Technical Analysis**
📊 **1. Price Discounts Everything** – All known information is reflected in price.
📉 **2. History Repeats Itself** – Market patterns are based on human psychology.
📈 **3. Trends Exist** – Prices move in trends (uptrend, downtrend, sideways).

### 🔹 **5. Basic Tools in Technical Analysis**
📌 **Candlestick Charts** – Show price action using open, high, low, and close (OHLC).
📌 **Support & Resistance Levels** – Identify key price levels where buying or selling interest is strong.
📌 **Trend Lines** – Help traders identify the direction of the market.
📌 **Moving Averages (MA)** – Smooth price action to identify trends.

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### **6️⃣ Why Learn Technical Analysis?**
✅ Helps traders identify **buy/sell opportunities**
✅ Works in **all financial markets** (stocks, forex, crypto)
✅ Provides **risk management strategies** to minimize losses
✅ Used by **institutions and retail traders** worldwide

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### **What’s Next in Class 2?**
In the next class, we will cover:
✅ **Understanding Candlestick Patterns**
✅ **How to Identify Market Trends?**
✅ **Using Indicators for Better Trade Decisions**

Stay tuned for more insights!

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🔹 **Disclaimer**: This content is for educational purposes only. *SkyTradingZone* is not SEBI registered, and we do not provide financial or investment advice. Please conduct your own research before making any trading decisions.