An analysis of stock market trading: Small literature review / Analýza obchodování na akciovém trhu: Malý přezkum literatury

A financial market, the stock one in particular, represents a substantial part ofevery functioning economy. Not only is this market type considered to be one ofthe basic indicators of the economic condition of a country, but it is also veryoften viewed as a promising financial investment generating a great fortune on theone hand, but also, due to the presence of volatility, as a considerable risk on theother hand. From the very first beginning of the stock market existence, a numberof people tried to forecast its future development, or more precisely, the futuredevelopment of the stock prices. Currently, the issue of stock price predictingbelongs among very important financial topics as it has an enormous potential forboth the investors and the whole market economy. The aim of this paper is toprovide the theoretical foundations for the topic of stock market trading. First, thepaper focuses on the explanation of the core of the issue and the description of thebasic terms connected with the capital market, the stock market, the stock as suchand, last but not least, the phenomenon of stock market trading itself. The textalso presents various authors’ approaches to the prediction of stock prices, somealso using the neural networks. Based on this paper, it was discovered that theprediction of the stock market development represents a very demanding task forwhich a number of models were designed although it is not possible to determinewhich one is the best.