[jtjt]

Hi,
i would like to know where i can learn more about understanding the very basics of stocks and shares from scratch. or if there is a book that can be recommended for me to buy from amazon. or if someone can answer all my questions. i wanted to know things like how and what process do companies go through to determine at what price to offer thier IPO? or do they just start at 1$. also i don understand what it means when someone says ' i bought 15 shares'. is it share of capital or share of profit? how do companys determine how much of shares are there in total and how much ofit to put up for sale in the stock market so that the public can buy them. how do companies benefit when all the buying and selling by the shareholders. have i mixed up shares and stocks? i am embarrased. please help.

thanks

[SW UK]

First few books I read when I started were 'Rich Dad, Poor Dad' for an idea on how money affects stuff etc. I think you have to have a certain kind of mindset this trickery. 'One up on Wall St' by Peter Lynch was an excellent book too and I learned a lot while I read it.

There is heaps of info on the net, and a lot of basic books about how shares actually work. You might want to start with a book that focuses more on the fundamental side of trading than the technical side. Check around online for glossaries on what the different words mean as you read the books.

As for IPOs I think it's based on how much money they want to raise - then it go's from there. The underwriters and investment banks then offer the price out that stimulates buying interest while also raising the cash for the company they now have a stake in.

When you buy a share, you buy a part of the business. The market cap represents what they are worth - the number of shares in issue reflect the portions of that.

Buying and selling pressure increases or decreases the market value of the actual company.

Think that's the real basics. Check around on the videos here, Dave's got some real good ones. Maybe Dave could make one to cover this topic and the economics that go with it?

Just noticed the smilies - read up and go then from to

PS Dave just had a thought - how about a thread on here for people to practice and develop the skills they've learned from your videos. IE a price chart with some emas, then a range of a few indicators which change each week - and then people reply with their predictions for movement, their target exits and also any patterns they see. Probably a bad way of explaining, but sounds like a cool idea.

[David Waring]

Hi jtjt,

Welcome to the community and don't worry about the lack of knowledge we are all here to learn so you are in the right place. Looks like SW UK has some good suggestions for you there. As he suggested we will be putting together some videos on the basics of stock trading after the forex course is done but in the meantime here are some other resources to check out:

As far as free resources here are some good ones to start with:

Stocks Basics: Introduction

Start Investing | Investing for Beginners | How to Begin Investing

There is also a book we have in the InformedTrades bookstore which you can find below that I recommend for people who are brand new to the market:

Stock Investing For Dummies (Paperback)

I agree with SW UK that I would start with understanding the basics of investing and the fundamentals before looking at trading which is normally considered more risky.

Best of luck in your quest and feel free to post any questions you have along the way and we will do our best to help.

Best Regards,
Dave