## 40 Terms Every Stock Newbie Must Know, Understand It All in One Article

Just entering the stock market and feeling bombarded by terminology? Retail investors, big players, and market makers can't tell them apart? Long positions, short positions, and short squeezes making you dizzy? Today, we will help you clarify your thoughts.

### 🎯 Basic Identity Terminology

**Newbie** = Those of us with small capital. **Whales** = Those playing with big money. **Market Makers** = Institutions that can influence individual stocks. **Big Players** = Monsters that can impact a bunch of stocks or even the entire market. **Retail Investors** = Newbies who get cut (heartbreaking🔪).

### 📈 Market Direction Terminology

**Bull market** means rising, rising, rising, **bear market** means falling, falling, falling. Going **long** expects a rise, going **short** expects a fall.

**Long**: I am bullish, buy directly. **Short**: I am bearish, borrow stocks to sell, and then buy back when the stock price drops to profit from the difference. **Short squeeze**: The bears are caught off guard, the stock price skyrockets instead, forcing them to cover their positions, leading to an even more explosive rise in the stock price.

### 🛑 Price Limit Terminology

**Limit Up** = The daily increase reaches the upper limit (for Taiwan stocks, it's 10%). **Limit Down** = Drops to the lowest limit. **Trading Halt** = The exchange calls for a halt, a major move to protect retail investors.

### 💡 Trading Terminology

**Chasing Up** = Buying in a trend when prices rise (easy to get trapped). **Selling Down** = Selling hurriedly when prices fall (might sell at the bottom). **Bottom Fishing** = Counteracting during a big drop, betting that the stock price will rebound. **Missing the Boat** = Originally intended to buy but didn't, anxiously watching the stock surge.

**Diving** = A sudden drop in stock price, the scary kind. **Liquidation (cutting losses)** = Being forced to sell in a state of loss, used to stem the bleeding.

### 🎭 Dealer Trading Terms

**Support the market** = The main forces buy in to support the stock price, leading retail investors to rise with it. **Wash the market** = First, lower the stock price to scare out those with weak will, and then pull it up. **Induce buying** = Create false signals of rising to trick you into entering, resulting in a downturn instead. **Induce selling** = Reverse operation.

**Sweeping the order book** = The market maker consumes all sell orders regardless of cost.

### 📊 Market Terminology

**Inner Market** = Transactions at the buying price, initiated by the seller. **Outer Market** = Transactions at the selling price, initiated by the buyer. **Transaction Volume** = The larger the transaction volume, the higher the activity level. **Open Interest** = The proportion of shares you currently hold.

**Full Position** = All stocks bought, no cash. **Empty Position** = All cash. **Clearing Position** = Pessimistic, all stocks sold.

**Consolidation** = horizontal fluctuations, no direction. **Rebound** = a short-term rebound after a decline. **Stuck** = after buying, the stock price drops and is trapped. **Unstuck** = the stock price returns to the purchase price, breaking free.

### 🔍 Technical Analysis Terms

**Pullback** = A brief decline in an upward trend. **Retest** = Returning to test once after breaking the neckline. **Gap** = Stock prices jump discontinuously, usually occurring before or after significant market movements. **Reversal** = A complete turnaround of the trend.

**Overbought** = It's reached the top, buyers are weak, it's going to drop. **Oversold** = It's hit the bottom, sellers are weak, it's going to rise.

**Support level** = The price level that the stock price does not fall below. **Resistance level** = The price level that the stock price does not rise above.

### 📈 Moving Average and Indicator Terminology

**Moving Average** = Moving Average Line, used to observe trends. The 5-day, 20-day, 60-day, and 120-day each have their own purposes.

**Golden Cross** = Short-term moving average crosses above long-term moving average, indicating a bullish signal. **Death Cross** = Opposite, indicating a bearish signal.

**RSI Indicator** = Relative Strength Index. >70 Overbought, <30 Oversold. **KD Indicator** = Stochastic Indicator. >80 Strong, <20 Weak. **MACD Indicator** = Moving Average Convergence Divergence, when the fast line crosses the slow line it is an important signal.

### 💰 Financial Indicator Terminology

**EPS (Earnings Per Share)** = How much money a company earns per share. **PE (Price to Earnings Ratio)** = Stock price ÷ Earnings Per Share. The higher the PE, the bigger the bubble.

**PB (Price-to-Book Ratio)** = Stock Price ÷ Book Value per Share. The lower the PB, the lower the risk. **PS (Price-to-Sales Ratio)** = Stock Price ÷ Sales per Share. The lower the PS, the more cost-effective.

**ROE (Return on Equity)** = How much return your invested money can generate. The higher the ROE, the more profit the enterprise makes.

### 🎁 Allocation Terminology

**Dividend** = A return to shareholders from the company, in the form of cash dividends and stock dividends. **Ex-dividend** = After the dividend is distributed, the stock price will adjust, and the total assets remain unchanged; it is just the per-share value that is recalculated.

### ⚠️ Risk Management Terminology

**Systematic risk** = The entire market is affected (policies, interest rates, etc.). **Unsystematic risk** = Issues related to a single stock (poor company management, etc.).

**Volatility** = The degree of fluctuation in stock prices. High volatility = prone to sharp rises and falls. **Stop-loss** = Setting a limit on losses; sell when it reaches that point to protect the principal.

### 🛍️ Other operation terms

**Holding stocks** = Buy and hold for the long term to receive dividends. **New issue** = Subscribe to new shares, and you can only buy if you are allocated.

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**Key Tips**: There are countless stock market terms, and the above 40 are the most commonly used. Rather than memorizing them rigidly, it's better to learn through practical trading; this way, the impressions will be the strongest. Remember—risk always comes first, be decisive about stop-losses, and don't let FOMO emotions sway you.