1️⃣ How Stock Exchanges Really Work

A stock exchange is not just “a place to buy stocks.”

It is an electronic auction system.

When you buy a stock:

You are not buying from the company

You are buying from another investor

The exchange only matches orders.

🇻🇳 Vietnam Market Structure

In Vietnam, stocks trade on:

Ho Chi Minh Stock Exchange (HOSE)

Hanoi Stock Exchange (HNX)

VNIndex represents the performance of stocks listed on HOSE.

🇺🇸 US Market Structure

In the US, stocks trade on:

New York Stock Exchange

NASDAQ

The S&P 500 tracks 500 largest US companies.

Order Book – The Real Mechanism

Every stock has:

Bid (buyers)

Ask (sellers)

Volume

If a buyer agrees to seller’s price → trade happens.

Price moves because:

Buyers become aggressive (market buy)

Sellers become aggressive (market sell)

Professional traders watch:

Bid/ask imbalance

Large hidden orders

Sudden volume spikes

2️⃣ Liquidity – Why It Matters More Than Strategy

Liquidity = how easily you can enter and exit without affecting price.

High liquidity:

Easy to buy/sell

Small spread

Stable execution

Low liquidity:

Hard to exit

Big spread

Slippage risk

Example:

Large-cap like VCB (Vietnam) → high liquidity

Small penny stock → low liquidity

Professional rule:

If daily trading volume is too small, skip it.

In the US:

Apple Inc. has extremely high liquidity.

Small micro-cap stocks = dangerous for big position sizes.

3️⃣ Volatility – Your Opportunity & Your Risk

Volatility = speed and size of price movement.

Low volatility:

Slow movement

Good for long-term investors

High volatility:

Big daily swings

Good for traders

Dangerous for beginners

Measured by:

ATR (Average True Range)

Standard deviation

VIX index (US fear index)

Volatility increases when:

Interest rate announcements

Earnings reports

Economic crises

War or geopolitical risk

Professional traders LOVE volatility

But only when controlled.

4️⃣ Understanding VNIndex Structure

VNIndex reflects market capitalization weighted structure.

That means:

Big banks influence it heavily

Large caps move the index

Important sectors in VNIndex:

Banking

Real estate

Securities

Steel

If banking sector moves strongly → VNIndex moves.

As a trader:

Always check:

Is index in uptrend?

Is market in distribution?

Is volume expanding or shrinking?

Because:

70% of stocks follow market direction.

5️⃣ Understanding S&P 500 Structure

S&P 500 is also market-cap weighted.

Top companies influence it strongly:

Apple Inc.

Microsoft

NVIDIA

If big tech rallies → index rallies.

The S&P500 has clear market cycles:

Bull market

Correction (5–10%)

Bear market (20%+ decline)

Recovery

Professional traders identify:

Higher highs & higher lows → bullish structure

Lower highs & lower lows → bearish structure

6️⃣ Market Phases (Very Important)

Every index goes through 4 phases:

Accumulation

Smart money buys quietly.

Markup

Trend becomes obvious. Public joins.

Distribution

Smart money sells to public.

Markdown

Panic selling.

If you learn this cycle, you stop buying tops.

7️⃣ Key Professional Insight

Market structure tells you:

When to be aggressive

When to reduce risk

When to stay in cash

Beginners ask:

“Which stock should I buy?”

Professionals ask:

“Is the market structure favorable?”

If VNIndex or S&P500 is in downtrend:

Even strong stocks struggle.

8️⃣ Your Homework (Very Important)

Today you should:

Open VNIndex chart (daily timeframe)

Identify current trend

Draw support & resistance

Open S&P 500 chart

Mark last major swing high & swing low

Observe volume behavior

Write down:

Is market bullish, bearish, or sideways?

What phase are we in?

9️⃣ Professional Mindset Shift

You are not gambling.

You are:

Reading liquidity

Studying structure

Measuring volatility

Waiting for probability