Share Market Analytics — Simple English (Full Book)
Share Market Analytics — Simple English
A clear, practical guide that explains the stock market step by step. Written for beginners and early learners.
Introduction
The stock market is a place where people buy and sell parts of companies called shares. Learning the market helps you make better financial choices. This book explains the basics, analysis methods, risk control, tools, and practical examples in simple language.
Chapter 1: Stock Market Basics
What is a share?
A share is a small part of a company. When you buy a share, you own a small piece of that company. If the company makes profit, you may get some of it as dividend and the share price may rise.
How trading happens
Shares trade on stock exchanges. Buyers and sellers place orders through brokers or trading apps. The exchange matches orders and the trade happens.
Common terms
- IPO: The first time a company sells shares to the public.
- Market Capitalization: Total value of a company’s shares (price × number of shares).
- Dividend: A share of company profit paid to shareholders.
- Index: A group of stocks that show market direction (e.g., Nifty, Sensex).
Chapter 2: Types of Investing
Decide your style based on time, skill, and risk appetite.
- Long-term investing: Hold stocks for years. Aim for steady growth.
- Short-term trading: Trade within days or weeks for quick gains.
- Swing trading: Hold for a few days to capture a price swing.
- Day trading: Buy and sell within the same day.
- Passive investing: Buy index funds and hold. Low effort and low cost.
Chapter 3: Fundamental Analysis
Fundamental analysis studies a company’s business and finances to find its true value.
Key areas to check
- Income Statement: Shows revenue, profit, and expenses.
- Balance Sheet: Shows assets, liabilities, and equity.
- Cash Flow Statement: Shows cash movement in business.
Important ratios
- EPS (Earnings Per Share): Profit allocated to each share.
- P/E Ratio: Price divided by EPS. Helps compare valuation.
- ROE: How well the company uses shareholders’ money.
- Debt to Equity: How much debt the company has compared to equity.
Compare companies in the same industry. A company with steady cash flow, good margins, and reasonable debt is usually safer.
Chapter 4: Technical Analysis
Technical analysis looks at price and volume charts to find entry and exit points.
Basic concepts
- Trend: Direction of price (uptrend, downtrend, sideways).
- Support: Price level where buyers likely step in.
- Resistance: Price level where sellers likely step in.
Popular indicators
- Moving Averages: Show average price over time to identify trend.
- RSI: Shows if the market is overbought or oversold.
- MACD: Helps spot momentum changes.
Use indicators with price action and volume. No single indicator guarantees success.
Chapter 5: Risk Management
Protecting capital is the most important rule.
- Diversify: Do not put all money into one stock or sector.
- Position sizing: Decide how much you risk per trade.
- Stop loss: Set a clear level to exit if the trade goes wrong.
- Risk-reward: Aim for trades where potential reward is higher than risk.
Chapter 6: Market Psychology
Markets move on human emotions. Fear makes prices drop quickly. Greed pushes prices up. Recognize your biases: loss aversion, herd thinking, and overconfidence. Use rules and a plan to reduce emotional decisions.
Chapter 7: Modern Tools and Software
Tools help analyze faster and more accurately.
- Chart platforms: TradingView, broker charts for drawing and indicators.
- Spreadsheets: Excel or Google Sheets for simple models.
- Python: For deeper data work and backtesting strategies.
- Screeners: Find stocks by filters like growth, valuation, or volume.
Chapter 8: Practical Learning and Exercises
Practice is essential. Try these steps:
- Create a watchlist of 5–10 companies you understand.
- Read quarterly reports and note revenue and profit trends.
- Practice reading charts for past 1–2 years and mark support/resistance.
- Paper trade (use a simulated account) before risking real money.
Chapter 9: Case Studies (Simple Examples)
Growth Company
Look for steady revenue growth, improving margins, and reinvestment in business. A fair valuation and strong management are good signs.
Value Company
Find companies trading below their intrinsic value due to temporary problems. Check debt levels and cash flow before investing.
Cyclical Company
Cyclicals follow the economy. Buy when the cycle is low and fundamentals are intact.
Chapter 10: Strategies and Habits of Successful Investors
- Keep a simple plan and follow it.
- Document every trade and reason behind it.
- Learn from mistakes and update your rules.
- Be patient. Compounding works over time.
Conclusion
Start small, learn consistently, and protect your capital. Use both fundamentals and technicals to make balanced decisions. Track performance and improve your process over time.
