Trading Basics
Understanding stocks, markets, and how prices move
What are Stocks?
A stock represents ownership in a company. When you buy stock in Apple (AAPL), you literally own a tiny piece of Apple Inc. If the company does well, your piece becomes more valuable. If it does poorly, it becomes less valuable.
Simple Analogy
How Stock Prices Move
Stock prices move based on supply and demand - if more people want to buy a stock than sell it, the price goes up. If more people want to sell than buy, the price goes down.
Price Goes Up When:
- • Good earnings reports
- • New product launches
- • Positive news coverage
- • Strong industry growth
- • More buyers than sellers
Price Goes Down When:
- • Poor earnings reports
- • Scandals or lawsuits
- • Economic recession fears
- • Increased competition
- • More sellers than buyers
Bull vs Bear Markets
You'll often hear traders talk about "bull" and "bear" markets. These terms describe the overall direction of the market:
Bull Market
Prices going UP
Named after how a bull attacks - thrusting its horns upward. Investors are optimistic and buying.
Bear Market
Prices going DOWN
Named after how a bear attacks - swiping its paws downward. Investors are fearful and selling.
Did You Know?
What is Volume and Why It Matters
Volume is the number of shares traded in a given time period. It tells you how much activity is happening in a stock.
Volume Signals:
Why Our Platform Tracks Volume
Understanding Trading Volume
Volume measures how many shares are traded
Total Daily Volume
19.9M
Opening Volume Surge
Markets open with high volume as overnight orders execute and traders react to news.
High Volume
Strong conviction in price movement. Breakouts with high volume are more reliable.
Low Volume
Less conviction. Price moves on low volume may reverse quickly.
Volume Spike
Sudden increase often signals important price action or news events.
Reading Price Charts (Candlesticks)
Most trading platforms (including ours) use candlestick charts to show price movements. Each "candle" shows four pieces of information for a time period:
Green Candle (Bullish)
Price closed higher than it opened. The bottom of the body is the open price, top is the close price.
Red Candle (Bearish)
Price closed lower than it opened. The top of the body is the open price, bottom is the close price.
The thin lines above and below (called "wicks" or "shadows") show the highest and lowest prices reached during that period, even if the price didn't close there.
How a Candlestick Forms
Watch price action create a single candle
The first trade of the day sets the opening price at $150.00
Candlestick Anatomy
Understanding Market Hours
The U.S. stock market isn't open 24/7. Here are the key time periods (all times in Eastern Time):
Extended Hours Warning
US Stock Market Hours
All times in Eastern Time (ET)
Pre-Market
Extended hours trading with lower liquidity
4 AM - 9:30 AM ET
Market Open
Regular trading hours - highest volume
9:30 AM - 4 PM ET
After-Hours
Extended hours trading after market close
4 PM - 8 PM ET
Trading Tip
The first 30 minutes after market open (9:30-10:00 AM ET) and the last 30 minutes before close (3:30-4:00 PM ET) typically see the highest trading volume and volatility.
Types of Orders
When you want to buy or sell a stock, you need to place an order. The two most common types are market orders and limit orders. Understanding the difference is crucial for controlling your entry and exit prices.
Order Types Explained
Click to compare market vs limit orders
Advantages
- Guaranteed execution
- Fastest order type
- Best for high liquidity stocks
Disadvantages
- No price control
- Can experience slippage
- May get worse price than expected
Live Simulation
Buy 100 shares of AAPL
$175.50
$175.65
When to Use Each
Use market orders when you need guaranteed execution (e.g., exiting a losing position). Use limit orders when price is more important than speed (e.g., entering a planned trade).
bookmarkKey Takeaways
- check_circleStocks represent ownership in a company
- check_circlePrices move based on supply and demand
- check_circleVolume confirms the strength of price moves
- check_circleGreen candles = bullish, Red candles = bearish
- check_circleStick to regular trading hours when starting out
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