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Stock market basics

how the stock market works

Stock market basics for traders and stock market investing basics for investors are necessary for everybody who wants to make money in the stock market.

People have asked me, “What is important stock market know-how?”

To be honest, I have to say that I’m not sure what is absolutely necessary to know about stock markets to be profitable. That’s why I’m open to every new piece of information I can find.

My current idea is that it is not necessary to have a lot of information to be successful trader or investor.

Do not try to learn everything

What I learned during my stock trading career is that it is not absolutely necessary to understand everything on stock market. It is very hard to know all about how the stock market works.

It is also very complicated to try to absorb every information available about trading, about economics about current situation in world etc.

So I finally recognized that much better way how to work with financial markets and generate profits is to keep it simple. Avoid to be overwhelmed by amount of information available today. Try to use only basic trading and analytic tools for your trading or investing needs.

How the stock market works ?

Some time ago, I found one book. I started to read it, and it I discovered that it’s a super book to learn stock market basics. This book describes everything about stock markets: how they work, who’s involved in trading on stock markets, how orders work, what is a market maker, what are typical frauds in the stock market, and much more.

The name of the book is Trading and Exchanges.

Here is short description from the contents:

The structure of Trading
Basics about trading industry, market structure and brokers
The Benefits of Trade
Why people trade
Speculators
Speculators on markets and what they do ?
Liquidity Suppliers
Dealers, Bid/Ask, Block Traders and much more
Origins of Liquidity and Volatility
Evaluation and Prediction
Market Structures
Indexes, Portfolios, Specialists, Internalization, Floor Trading,Automated Trading, Bubbles and Crashes

I like this book very much and recommend it to everybody. Be prepared to learn a lot. The book is long, so it will take time to read .

You can buy it on Amazon.

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