Stock Market 102: Market Structure & How Prices Really Move

 

📘 STOCK MARKET CLASS – DAY 2

Market Structure, Price Movement & Trends**

Understanding how the market moves is more important than learning 100 indicators.
This class teaches you how price behaves, why trends form, and how traders read the market.

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🔹 1. What Really Moves Stock Prices

Prices move because of:

1. Demand & Supply

• More buyers → price up
• More sellers → price down

2. Big Money (Institutions)

Foreign investors (FII), domestic investors (DII), mutual funds, banks move markets.

3. News & Events

• Quarterly results
• Mergers
• RBI announcements
• Budget
• Global markets

4. Trader Psychology

Fear and greed move the markets just as much as news.

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🔹 2. Market Structure Basics

Everything that happens in charts falls into 3 stages:

1. Accumulation Phase

Smart money buys quietly at lower prices.

2. Mark-Up Phase (Uptrend)

Price starts rising rapidly → everyone sees the trend.

3. Distribution Phase

Smart money sells slowly at higher prices.

4. Mark-Down Phase (Downtrend)

Price falls sharply → retail panic.

This cycle repeats endlessly.

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🔹 3. Trends: The Heart of Technical Analysis

1. Uptrend

Higher highs + higher lows
(Focus on buying)

2. Downtrend

Lower highs + lower lows
(Focus on selling or staying away)

3. Sideways / Consolidation

Price moves in a range
(Breakout coming)

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🔹 4. Support & Resistance (Most Important Concept)

Support

A price level where buyers usually come in.

Resistance

A price level where sellers appear.

Prices bounce between these levels until a breakout or breakdown happens.

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🔹 5. Breakouts & Breakdowns

Breakout

Price moves above resistance → bullish trend.

Breakdown

Price moves below support → bearish trend.

Volume must be high to confirm the move.

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🔹 6. Candles and Market Sentiment

• Long wick down → buyers rejected lower prices
• Long wick up → sellers rejected higher prices
• Big green candle → strong buying
• Big red candle → strong selling
• Doji → indecision, trend may change

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🔹 7. Smart Money vs Retail Trading

Smart Money

• Enters silently
• Accumulates slowly
• Uses traps (fake breakouts)
• Controls market direction

Retail Traders

• Buy after price is already high
• Panic sell at the bottom
• React emotionally

Understanding this difference helps you avoid traps.

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🔹 8. Today’s Summary

You learned:

✔ Why market moves
✔ Market phases (accumulation → markup → distribution → markdown)
✔ Trend structure
✔ Support & resistance
✔ Breakouts / breakdowns
✔ Candle psychology
✔ Smart money vs retail behavior