Stock Investing Guide - Part I - Stock Market Basics

The world of the financial markets may seem chaotic and disorderly, but this is a misconception that is held in reality. Like any other subject, if you study how stocks work on the stock market, it is possible to obtain very good returns in both the long and short term. But for this, it is necessary to have a good guide that instructs us in the most basic and fundamental concepts in the stock market.

With this idea in mind, in Stock Investing Guide, we will learn all the necessary concepts so that any person with a certain experience or without it, can understand how this world works.

In this book, we will see essential concepts such as the dividends a company distributes, the important dates, and the different types that exist, in addition to explaining the very important concept of compound interest, which will be key when choosing shares to keep in your portfolio.

Of course, we will break down concepts such as short selling, the types of orders we can place through our trading accounts, and important factors such as volume and price volatility.

Finally, we will look at how to read stock prices, the different ways to represent them, starting with bars and continuing with Japanese candlesticks, ending with technical concepts such as trend lines and supports and resistances.

At the end of the book, we will be able to have basic but very powerful notions of how the market works in general so that we can make our own decisions with a stable, fixed, and excellent criterion.

Content

Introduction

Chapter 1: What is a share? What does it represent, and what is it for?

- Dividend yield

- Dividend types and their relevant dates

- Compound interest, the reason of long-term profitability

- The rule of 72 in compound interest

- Summary

Chapter 2: Stock transactions and time horizons

- Stock transactions

- How short selling works

- How to select the right broker

- What types of accounts does a broker offer us?

- The types of transactions available on the market

- Time horizons, volume, and volatility

- Summary

Chapter 3: Representation of the price of a share

- Price representation

- Bar Graph representation

- Candlestick graph representation

- Heikin-Ashi Candlestick Representation

- Basic technical analysis

- Representation of volume and volatility

- Trend lines

- Resistances and supports lines

- Summary

Conclusions

Full of examples to show how each concept works, this book intends to go straight to the point, without any frills and with an eminently practical sense so that we can get the most out of it when making a real operation with shares.