Newcomers just entering the stock market are most likely to be confused by all kinds of terminology. Words such as retail investors, big players, market makers, and “grasshoppers” fly around everywhere. And there are also bull markets and bear markets, going long and going short, short squeezes, and “plunges” triggered in the squeeze—really, it can be very confusing at the very start. I was the same at the beginning; it took me quite a lot of time to figure out what these stock professional terms actually mean.

Let’s start with the most common ones on the trading side. Retail investors are ordinary investors—our everyday participants—whose capital is relatively small. Then there are big players and market makers. They buy and sell stocks with large amounts of money, and they can even influence stock price movements. A bull market means the trend is rising, while a bear market means it’s falling—this part is fairly easy to understand. Going long means buying because you expect the price to rise; going short means selling because you expect the price to fall. A short squeeze is more interesting: those who are shorting expect the stock price to fall, but instead the stock price surges upward, forcing them to buy back at a higher price, which drives the stock price up even more.

When you watch the market, you’ll see terms like limit-up, limit-down, and trading halts—these refer to when the stock price touches the upper and lower limits set by the exchange. Chasing rallies and selling impulsively are mistakes retail investors often make. Bottom fishing and missing the move are two extremes—bottom fishing means predicting that the stock price will rebound so you rush to buy; missing the move means you didn’t buy in time and ended up missing the rally. Getting trapped means you bought, but the stock price fell afterward and you lost money; getting untrapped means the stock price rises back to around the level you bought at.

Stocks themselves are also categorized. Blue-chip stocks are shares issued by large companies with stable earnings, which are relatively safer. Growth stocks are shares of companies whose sales and profits are growing quickly. “Junk stocks” are those with poor prospects. Leader stocks can drive the market. Large-cap stocks have a large market capitalization and float; small-cap stocks are the opposite. A sector is a collection of stocks from the same region or industry, and “themes” are the reasons used to justify speculation.

In technical analysis, moving averages (MA) are very important. When a short-term moving average crosses above a long-term moving average, it’s called a golden cross, suggesting the stock price may rise; the opposite is called a death cross. A support level is a price that the stock price can’t break below, while a resistance level is a price that it can’t push through on the way up. Indicators such as RSI, KD, and MACD are used to judge overbought and oversold conditions. A KD value above 80 indicates strength, while a value below 20 indicates weakness. Pullbacks, rebounds, retests, gaps, and reversals are all different types of stock price movement.

You also need to understand financial indicators. Earnings per share (EPS) shows how much money a company earns per share. The price-to-earnings ratio (PE) is the stock price divided by earnings per share. A PE that’s too high indicates the stock price is inflated with a bubble. The price-to-book ratio (PB) — the lower it is, the smaller the investment risk. The price-to-sales ratio (PS) — the lower it is, the greater the company’s investment value. Return on equity (ROE) — the higher it is, the stronger the company’s profitability.

There are also some operational terms you should know. Margin trading and securities lending/borrowing means borrowing money from a broker to buy stocks, or borrowing stocks to sell. Dividends are the return a company gives to shareholders. There are two types: cash dividends and stock dividends. Ex-dividend and ex-rights mean adjusting the stock price after dividends; this adjustment will not increase your total assets. Cutting losses (selling to stop the bleeding) is a stop-loss operation: when the stock price falls, you sell at a lower price to avoid even greater losses.

You also need to be wary of how major players and market makers operate. Stabilizing the market is when major players buy in to drive the stock price upward. Washing the market is when they push the price down to pressure retail investors into selling. Luring longs means manufacturing an illusion of a rising price to lure you into following—yet the result is that the stock price ends up falling. An inside quote refers to trades executed at the buyer’s bid price, indicating the seller is actively selling; an outside quote refers to trades executed at the seller’s ask price, indicating the buyer is actively buying.

Risk management is crucial. Systematic risk affects the entire market—for example, changes in policy and interest rates. Non-systematic risk is specific to a single company—for example, poor management. Stocks with high volatility see dramatic price swings, while stocks with low volatility are relatively stable. Stop-loss means setting a loss limit and automatically selling. “Storing shares” refers to long-term holding, relying on dividends for profit.

In fact, stock professional terminology goes far beyond all of these, but once you master these basic concepts, you can communicate normally with other stock investors and understand market trends more clearly. Most important of all, don’t blindly follow the crowd—have your own analysis and judgment.