Tier 1 · Foundations

How Markets Work

The essential infrastructure of modern trading — where trades happen, who's on the other side, how orders execute, and the rules that keep it all together.

5
Sub-Modules
6
Hours
27
Quiz Questions
5
Case Studies

Before you place your first trade, you need to understand the terrain. Module 1 builds the mental map — from the purpose of financial markets to the specific regulations that govern your activity. Every concept introduced here will be built upon in later modules. Take your time and get these foundations right.

Sub-Modules
1.1

What Is a Financial Market?

The four core functions of markets — price discovery, liquidity, capital allocation, and risk transfer. Exchange-traded vs. OTC markets, the electronic revolution, major global exchanges, and an introduction to market indices (S&P 500, Nasdaq, Dow).

1 Hour Beginner 5 Questions · 1 Case Study
1.2

Market Participants

Retail traders, institutional investors, hedge funds, market makers, HFT firms, and investment banks. How payment for order flow works in dollars and cents, the information hierarchy, and where your real edge lies.

1 Hour Beginner 5 Questions · 1 Case Study
1.3

Order Types and Execution

Market, limit, stop, stop-limit, and trailing stop orders. The order book and bid-ask spread. Bracket orders, time-in-force modifiers, and execution quality — the hidden cost of "free" trading.

1.5 Hours Beginner–Intermediate 6 Questions · 1 Case Study
1.4

Market Structure: Sessions & Settlement

Pre-market, regular session, after-hours — including extended hours limitations. The global trading clock, how overnight events cascade across time zones, market holidays, T+1 settlement, and the events that shape the trading calendar.

1 Hour Beginner 5 Questions · 1 Case Study
1.5

Regulation & Investor Protection

SEC, FINRA, CFTC, and the Fed — who regulates what. SIPC insurance, the Pattern Day Trader rule, cash account violations (good faith, free-riding), the wash sale rule, margin mechanics, and prohibited activities.

1.5 Hours Beginner–Intermediate 6 Questions · 1 Case Study
By the End of Module 1, You Will Be Able To
Explain how financial markets discover prices, provide liquidity, and transfer risk
Understand market indices (S&P 500, Nasdaq, Dow) and use them to contextualize stock performance
Identify all six market participant types and understand how PFOF works in dollars and cents
Use market, limit, stop, and bracket orders correctly and with confidence
Navigate trading sessions, market holidays, and understand how global events cascade overnight
Understand T+1 settlement, cash account violations, and extended hours limitations
Comply with PDT rules, margin requirements, and the wash sale rule
Recognize prohibited activities: insider trading, market manipulation, spoofing

Prerequisites

None. This is the starting point of the course. No prior trading experience or financial knowledge is required.

You should have a general understanding of what stocks and bonds are, even if you've never traded one. If phrases like "buy low, sell high" make sense to you, you're ready.

What Comes Next

Module 2: Setting Up for Success — choosing a broker, account types, paper trading, and the essential tools and data sources you'll use throughout the course.

Module 2 is practical and hands-on. You'll finish it with a fully configured trading environment ready for Module 3.

Begin Module 1