If you were anything like me when I started out, you are confused about what to look for in a good stock trading education. This article will shed light on what you need to know.
How to Choose the Perfect Stock Market Course?
Choosing the right stock market course is an important decision. There are many providers of stock market courses; Some are free, and some can be very expensive.
It is very important to understand what you are getting so that you do not part with your hard earned money and feel that what you have bought does not meet your needs.
What should be included in a good stock market course?
When looking for a stock market course, you need to ensure that the training:
- Designed to meet your needs – Day trading or investment training
- Provides an enriching learning experience – video lessons or personal training
- Covers technical analysis – how to use stock charts and indicators
- Covers fundamental analysis – analysis of profit and loss statement, cash flow statement and balance sheet
- Shows you how to build your own system – How to reach the market with your own strategy
- There’s a good no-quibbles money-back guarantee for at least 60 days, so you can get a refund if it doesn’t suit you
Most commonly available training courses focus on technical analysis; This can be a problem because you need to understand whether the stock you are buying is currently undervalued by the market. Your training course includes technical analysis and fundamental analysis.
What is Technical Analysis?
Technical analysis is the study of supply and demand in the stock market, by comparing the history of stock price movements and volume (number of shares traded). Understanding how prices move in relation to open, high, low and closing prices on a given minute, hour, day, week or month and comparing this to volume can give an insight into future market direction. The required data is usually displayed in a stock chart, so it is easily consumed.
Different areas of technical analysis
The science/art of technical analysis usually falls into various fields of study:
- Supply and Demand – Stock Price Movement vs. Volume
- Trend Following – Understanding What Trends Are
- Waves and Cycles Analysis – Understanding How the Markets Move
- Stock Charts – Prices – Plotting price in a chart to understand the history of a stock, stock, or market index using Bars, Candlesticks, or Point and Figure Charting.
- Trend Interpretation – Drawing Trend Lines – Support and Resistance Lines
- Price Indicators – The study of price based chart indicators or oscillators known as Stochastics, “Relative Strength Index” (RSI), “Rate of Change” (ROC), “Moving Average” (MA), “Moving Average Convergence Divergence” (MACD). known as. ), Parabolic SAR, ADX Average Directional Movement Index.
- The study of volume – understanding how volume levels correlate with price – and how price correlates with volume.
- Study of price volume indicators – “On Balance Volume” (OBV), Chaikin Money Flow, “Time Broken Volume” (TSV), Moneystream.
- Market Sentiment – Understanding the madness of the crowd.
What are the positive aspects of technical analysis courses?
If taught properly, they can help you understand one aspect of the stock market equation. This is the “effect” part of the cause and effect equation. Technical Analysis Studies:
- what – what happened now
- effect – not cause
- Market Action – What is happening in “real-time” at the moment
What is fundamental analysis?
Fundamental analysis is what Warren Buffett has used so effectively over the past five decades to make himself a billionaire. Effective analysis of company accounts is important here in the form of annual reports. Any good stock market course should cover at least the following topics:
- company accounts
- income details
- balance sheet
- cash flow statement
- earnings per share
- price earnings ratio
- book value, price to book
Liberated Stock Trader provides an excellent short course covering fundamental analysis here. https://www.liberatedstocktrader.com/free-stock-market-training/
Of course, it’s all covered In-depth Liberated Stock Trader Pro Training with Videos and Books Here.
Where do most stock market training courses fail?
Most stock market training courses focus exclusively on technical analysis; This can be confusing. I support technical analysis and am a certified technical analyst myself, however having only an understanding of technical analysis can be a problem for the trader or investor. The main issues are:
- No understanding of economics With no understanding of the basic economic facts of life an investor can trade in a business or economic environment that is fundamentally poor, reducing any chances of success.
- Doesn’t understand company fundamentals – Trading a stock on the edge of financial suicide lowers the odds of success if you are buying long. Of course, if you’re shorting a stock, you also need to be able to understand the financial position of the company.
What is missing in most courses?
Many stock market technical analysis courses also do not cover important questions such as:
- economic health and business environment
- company fundamental analysis
- risk management
- portfolio management
- tracking trade
- build a system
Furthermore, most stock market training is extremely expensive, typically $2000+ for weekend seminars.
stock market education summary
Now you know what to look for when making a decision about a stock market education provider. Make sure there is technical and fundamental analysis, combined with a splash of economics and a good dose of money management, risk management and psychology/mindset.
Other chapters in the Liberated Stock Trader Book are listed below
This chapter sets the stage for the two major areas of stock market technical analysis and fundamental analysis of companies, including macro and microeconomics.
In this chapter it is seen what actually moves the markets, what are the cycles of boom and bust and how to spot them.
What are stock market cycles and cycles of business and economies. Important information that you need to appreciate as part of your original analysis.
We then move on to fundamental analysis and the financial fitness of the company. All key indicators and measures are included.
Stock screening means using criteria to shortlist the kind of stock you want to buy. An important part of any stock market training
Once you know the business environment, the state of the economy and you have shortlisted the stocks you want to buy. The next thing is technical analysis. Even if the company looks great on paper, if the stock price is falling, you don’t want to buy it until it goes down. This is called catching a falling knife. Chart patterns and technical analysis help with this.
Here we get into the art of drawing on a stock the supply and demand, the direction of the trend, and charts to help predict how long the trend will last. It is important for you to have buy and sell signals.
Which Indicators You Should Use There are literally hundreds of stock chart indicators. Each has a specific use case and application, which one should you use?
Volume is an important indicator along with price. You need to understand these two in fine detail, you will learn everything you need to know.
Moving on to advanced technical analysis, we cover indicators such as the Parabolic SAR and point and figure charts.
How are market participants feeling? positive, negative or indifferent. Consider that 90% of people fail to beat the average market return, sentiment indicators can be a great contrast indicator. Take a look at how to use them to your advantage.
Understanding how you want to invest, how much time you have and your time horizon. All these questions help you understand what kind of investor you want to be, thereby helping you choose the right strategy for you. We then move on to building your stock investment system, which is an important element of your planning.
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