Stock Markets
The stock market is where companies raise capital and investors build wealth. It’s the most studied market, with rich fundamentals and clear drivers.
What Are Stocks?
Stocks represent ownership in a company. When you buy a stock, you own a piece of that company.
Key features:
- Company ownership
- Earnings-driven prices
- Fundamental analysis
- Exchange-traded
Market Characteristics
Size and Volume
| Feature | Value |
|---|---|
| Global Market Cap | $100+ trillion |
| Daily Volume (US) | $300+ billion |
| US Exchanges | NYSE, NASDAQ |
| Session Hours | 9:30-16:00 ET |
Trading Hours
Regular hours only:
US Market Hours (ET)
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Pre-Market ████ 04:00-09:30
Regular ████████████ 09:30-16:00
After-Hours ████ 16:00-20:00
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Closed weekends and holidays
Leverage
- Cash accounts: No leverage
- Margin accounts: 2-4x
- Pattern day trader: 4x intraday
Volatility Profile
Typical Movement
| Asset Type | Daily Range % |
|---|---|
| Large Cap | 1-3% |
| Mid Cap | 2-5% |
| Small Cap | 3-8% |
| Penny Stocks | 10%+ |
Volatility Characteristics
- Moderate volatility — More stable than crypto
- Earnings moves — Big swings on reports
- Sector rotation — Money flows between sectors
- News-driven — Catalysts on headlines
Best Strategies for Stocks
1. Trend Following
Why it works: Strong stocks trend upward
| Setup | Timeframe | Stop |
|---|---|---|
| Breakout | Daily | 8% trail |
| Earnings beat | Daily | Below breakout |
2. Swing Trading
Why it works: Medium-term swings
| Setup | Timeframe | Target |
|---|---|---|
| Pullback to MA | 4-Hour | Previous high |
3. Earnings Play
Why it works: Earnings = big moves
| Setup | Timeframe | Strategy |
|---|---|---|
| Pre-earnings | Daily | Straddle setup |
| Post-earnings | Daily | Gap trade |
4. Growth Investing
Why it works: Winner stocks keep winning
| Setup | Timeframe | Criteria |
|---|---|---|
| Revenue growth | Weekly | >20% YoY |
| Improving margins | Weekly | Trend up |
Best Tools for Stocks
Platforms
| Platform | Best For |
|---|---|
| Thinkorswim | Advanced analysis |
| Interactive Brokers | Global access |
| Fidelity | Long-term |
| Webull | Commission-free |
Data Sources
| Source | Use |
|---|---|
| SEC filings | Fundamentals |
| Finviz | Stock screener |
| TradingView | Charts |
| Yahoo Finance | News/data |
Analysis Types
| Type | What It Measures |
|---|---|
| Technical | Price patterns |
| Fundamental | Earnings, revenue |
| Quantitative | Data-driven |
| Sentiment | Market情绪 |
Market Segments
By Market Cap
| Segment | Cap Range | Characteristics |
|---|---|---|
| Large Cap | $10B+ | Stable, boring |
| Mid Cap | $2-10B | Growth potential |
| Small Cap | $300M-2B | High risk/reward |
| Penny | <$300M | Speculative |
By Sector
| Sector | Examples | Driver |
|---|---|---|
| Tech | AAPL, MSFT | Innovation |
| Finance | JPM, BAC | Rates |
| Healthcare | JNJ, PFE | Pipeline |
| Energy | XOM, CVX | Oil price |
| Consumer | KO, PG | Demand |
Stock Selection Criteria
Fundamental
- Revenue growth: >15% YoY
- Earnings beats: Consistent beats
- Profit margins: Expanding
- Free cash flow: Positive
Technical
- Uptrend: Higher highs/lows
- Volume: Increasing on breakouts
- RS: Relative strength vs. market
Trading Tips
Do
- Research before buying
- Start with large caps
- Use limit orders
- Set stop-losses
Don’t
- Buy unknown penny stocks
- Trade pre/post market (wide spreads)
- Ignore earnings dates
- Over-leverage
Key Takeaways
- Fundamental-driven — Earnings matter
- Moderate volatility — More predictable
- Regulated exchanges — Protected
- Earnings moves — Big catalysts
- Long history — Well-studied
Next Market
Now that you understand Stocks:
indices.md >>>
Research first. Trade second.