According to the definition on wikipedia, a stock market, or equity market, is a private or public market for the trading of company stock and derivatives of company stock at an agreed price. Many have also agreed that stock market is a forward indicator of an economy or company's growth.
Looking from a trader point of view, stock market could be viewed as a "gambling den" whereby traders bet on the direction of the stock prices and if the prediction is correct, a windfall will be waiting at the other end but if wrong, one could lose all the vested capital or even ended up bankruptcy due to over-leverage. Looking from an investment point of view, stock market is also a place whereby one could purchase a pie of a company business ( become a shareholder ) and enjoy the business growth ( in term of share price appreciation ) without even needing to run the company.
The participants in the stock market range from small individual ( retailer ) to large hedge fund who can be based anywhere in the world. Demand and Supply are the main mechanism that causes the share price to move in either direction. Statistically, 99% of the people trading in the stock market will "lose", less than 1% can profit from it consistently and only a handful like Benjamin Graham, Warren Buffett, Peter Lynch, etc are able to growth their wealth successfully in the stock market.
Two classes of players exist in a stock market and they are basically Trader and Investor. A clear differentiation between these 2 groups are Trader uses technical analysis to predict the direction of the prices whereas Investor on the other hand looks at the fundamental of a company, buying into the stock when the price reached an undervalue state and only exit when the price has moved up to an overvalue state. Technical analysis is using past data as a reference to predict the next direction of the stock prices, there are various technical indicators ( MACD, RSI, Stochastic, ADX, Bollinger Band, MA, Elliott Wave, etc ) developed to model the price movement. Though it could be 99% accurate but future can never be predicted accurately. That is probably why 99% of the people "loss" in stock markets. The less than 1% ( like the legendary Jesse Livermore ) that can consistently profit from the stock markets have something extra in them on top of technical analysis to beat the market. The handfuls who successfully growth their wealth in stock markets are none other than Investor class of people. Fundamental analysis is not just talking about looking at the company P&L, Balance Sheet, Cash Flow figures, playing with ratios ( P/E, EPS, NAV, P/B, ROE, etc ), it required more like evaluating the capability of the company's management team, the company's product, the company business plan, the company strategic position against its peer, etc. In short to be able to fundamentally identify a potential good company is not a textbook knowledge and that is why only that handful of people are able to success in the stock market.
View stock market as a battlefield, one need strategies/tactics, weapons and armies to fight it. What is weapons to the stock market is none other than the tool sets like FA and TA. Armies is the capital reserve one need to have to be vested in the stock market. Strategies/tactics, that would be the most difficult part and also decide whether you could win or lose in a battle. In stock market sense, strategy/tactics is none other than the ability to read the market. This is an everyday learning process and not easy to master. More of armies and weapons do not warrant one a sure win situation as you need strategy/tactics to outwit your opponents. Less of armies or weapons do not confirm a lose battle either. In the battle of Chibi ( Romance of the Three Kingdom ), Zhou Yu and Zhuge Liang were having lesser armies and weapons than Cao Cao ( 30,000 vs 100,000 ) but eventually based on superior tactic and strategy outwit Cao Cao and won the battle. Zhuge Liang also single handedly fenced off Sima Yi using the "empty city" tactic when he has totally zero soldiers under him. As traditionally, there is no sure win battle no matter how good your armies, weapons and tactics are and that is why also market has no sure win investment. Proper risk management has to be applied in order to minimize the risk. For a trader, the common risk management is cut-loss and for an investor the risk is to buy only when the valuation becomes dirt cheap but when the fundamental of the company turns sour, you lose your investment capital and that is the risk.
Each individual player in the stock market has his or her own risks and rewards level and hence there is no pure textbook based type of methods for all players. Rather than following other blindly to hope for a success in stock market, it is always best to know ownself and to derive a trading or investment blueprint for it when venturing into the stock market. Known ownself psyhcologically or emotionally ( greed, fear, patience ), type of risk willingly to take and amount of rewards aiming for will be able to find a suitable method custom to ownself for the stock market.
Remember, a win is not based on just one factor, it needs combination of good factors.
