When I first entered the stock market, the most headache-inducing thing was hearing a bunch of unfamiliar terms everywhere. Retail investors, big players, market makers, main forces, and chives—these are all exclusive terms for stock beginners, one after another. At the beginning, it was really easy to get confused. That was exactly how I was; I couldn’t understand a single word when chatting with friends, so I decided to organize these common stock market terms to help more beginners get started quickly.

Let's start with the most basic trading concepts. Retail investors are individual investors like us with limited funds. Compared to institutional investors, our capital is indeed pitifully small. Big players are investors who trade large sums of money, while market makers and main forces refer to institutional big players capable of influencing stock price movements; their every move can sway the entire market. As for chives, it describes retail investors who like to follow trends and are often harvested for losses—I’ve seen too many examples of this.

Bull markets and bear markets are key words for judging the market direction. A bull market is a period of rising prices and optimistic outlooks, while a bear market is a period of declining prices and bleak prospects. Optimists buy in anticipation of future gains, while pessimists sell short. Going long means buying stocks expecting appreciation; short selling is more complex, involving borrowing stocks from a broker to sell, then buying back at lower prices to profit from the difference. Short squeeze is a phenomenon I want to emphasize: when short sellers expect the stock to fall, but the price instead surges, forcing them to buy back at high prices, causing a sharp increase in stock price.

When watching the market, you'll encounter limit-up and limit-down boards, which are price limits set by exchanges—for example, Taiwan stocks have a maximum daily fluctuation of 10%. Trading halts are implemented to protect investors when stock prices fluctuate abnormally. Themes and sectors are the basis for speculation; themes may be news, rumors, or policies, while sectors are groups of stocks categorized by region, industry, or characteristics.

Stock types also matter. Blue-chip stocks are high-quality stocks issued by large companies with stable profits and generous dividends. Growth stocks are companies with rapidly increasing sales and profits. Junk stocks are those with poor prospects, while leading stocks have a leadership role within their sectors. Large-cap and small-cap stocks are distinguished by market capitalization; large-cap stocks are usually over $10 billion, small-cap stocks under $2 billion.

In trading operations, chasing gains means buying during an upward price movement, while cutting losses involves selling during a decline. Bottom fishing is predicting a rebound and buying during a significant drop. Missing the boat refers to missing the upward trend, while a plunge is a sudden sharp decline in stock price. Inducing buying or inducing selling are tactics used by main forces to create false signals to deceive retail investors. Cutting positions (selling at a loss or stop-loss) is to prevent losses from expanding. Market support is when main forces buy to stimulate prices upward, while shakeouts involve lowering prices to force retail investors out.

Inner and outer plates reflect the enthusiasm of buyers and sellers. Inner volume at the bid price indicates sellers eager to offload, while outer volume at the ask price shows buyers rushing in. A market crash is the most terrifying scenario, where investors sell off massively regardless of the price, causing stocks to plummet infinitely. Sweeping the order book refers to market makers consuming all sell orders regardless of cost.

Trading concepts like volume, open interest, full positions, and clearing positions relate to capital management. Consolidation is small-range fluctuation; rebound is a brief rise during a downtrend. Being trapped refers to buying in and losing money as prices fall; unwinding is when stock prices recover to near the purchase price. Market orders execute immediately at the best current price; limit orders specify a particular price for execution. Day trading involves buying and selling the same stock within one day. Margin trading and short selling involve borrowing money or stocks from brokers.

Dividends come in cash dividends and stock dividends. After ex-dividend and ex-rights, stock prices adjust, but your total assets do not increase—only the form changes. The three major institutional investors are foreign investors, investment trusts, and proprietary traders; their large trading volumes have a profound impact on market movements.

When analyzing technicals, pullbacks are short-term declines within an uptrend, while rebounds are short-term rises within a downtrend. A retest occurs when a breakout of a neckline is followed by a return to test that level. Gaps are caused by major news, leading to discontinuous jumps in stock prices. Reversals are trend changes in the opposite direction, and bottoming is the process of finding the lowest point.

Strong buying indicates high buyer enthusiasm and rising prices, while heavy selling occurs when holders rush to sell, causing prices to fall. Fake signals are created by main forces to deceive traders. Overbought means the stock has risen to an extreme, and oversold indicates a deep decline, both of which may reverse. Moving averages include 5-day, 10-day, 20-day, 60-day, 120-day, and 250-day lines. Golden cross is when a short-term moving average crosses above a long-term one, signaling an uptrend. Death cross is when a short-term moving average crosses below a long-term one, signaling a downtrend.

Support levels are prices where stock prices repeatedly do not fall below, while resistance levels are prices that stocks repeatedly fail to surpass. RSI above 70 suggests overbought conditions and potential reversal; below 30 indicates oversold and possible rebound. KD above 80 indicates strength; below 20 indicates weakness. MACD consists of the fast line, slow line, and histogram; a golden cross suggests potential upward movement, while a death cross suggests downward movement.

Fundamental analysis mainly looks at macroeconomics and company fundamentals. Financial statements include the income statement, balance sheet, and cash flow statement, usually released quarterly. Earnings per share (EPS) shows how much profit a company makes per share. Price-to-earnings ratio (PE) is the stock price divided by EPS; a high PE may indicate overvaluation. Price-to-book ratio (PB) is the stock price divided by net asset value per share; lower PB indicates less risk. Price-to-sales ratio (PS) is the stock price divided by sales per share; lower PS suggests higher investment value. Return on equity (ROE) measures how much profit is generated from shareholders’ equity; higher ROE indicates stronger profitability.

Risk management is crucial. Systematic risk affects the entire market, such as policy or interest rate risks. Unsystematic risk pertains to individual companies, like financial or operational risks. Volatility measures the degree of stock price fluctuations; high volatility means more dramatic swings. Stop-loss orders are set to automatically sell at a certain price to limit losses. Buy-and-hold involves purchasing stocks and holding long-term for dividends. IPO investing involves using funds to subscribe for new stock offerings.

Although these beginner-specific stock terms seem many, understanding them takes time, and soon they will become intuitive. I recommend beginners first master basic trading terminology, then gradually learn about technical analysis and fundamentals. After a few months of actual trading, these terms will become very natural, and communicating with other investors will no longer be a barrier.