Basic Terminology
Price-Related
| Term | Meaning |
|---|---|
| Current Price | The latest traded price |
| Open Price | Price of the first trade of the day |
| Close Price | Price of the last trade of the day |
| High Price | Highest traded price of the day |
| Low Price | Lowest traded price of the day |
| Gain/Loss | Percentage change from yesterdays close |
| 52-Week High/Low | Highest/lowest price in the past year |
Order-Related
| Term | Meaning |
|---|---|
| Limit Order | Specify a price; executes only when that price (or better) is reached |
| Market Order | Executes immediately at current market price |
| Stop Order | Automatically sells when price hits a set level, used to control losses |
| Conditional Order | An order that executes automatically when preset conditions are triggered |
Technical Analysis Terms
| Term | Meaning |
|---|---|
| MA (Moving Average) | Average closing price over N days plotted as a line, used to identify trends |
| MACD | Moving Average Convergence Divergence, used to identify trend changes |
| RSI | Relative Strength Index, used to identify overbought/oversold conditions |
| Support Level | A price level where buying may enter when price falls |
| Resistance Level | A price level where selling may appear when price rises |
| Trend Line | A straight line connecting key highs/lows, used to determine trend direction |
| Pattern | Specific shapes formed on price charts (e.g., Cup and Handle, Head and Shoulders) |
For more technical analysis guides, see MACD and RSI Combined and Complete Guide to Moving Averages.
Fundamental Analysis Terms
| Term | Meaning |
|---|---|
| P/E Ratio | Stock price / Earnings per share, measures valuation |
| EPS | Net profit / Shares outstanding, measures profitability |
| ROE | Net profit / Shareholders equity, measures capital efficiency |
| Dividend Yield | Dividend per share / Stock price, measures dividend return |
| Market Cap | Stock price x Shares outstanding, measures company size |
| Debt Ratio | Total debt / Total assets, measures financial risk |
| Revenue | Total sales income of the company |
Market-Related Terms
| Term | Meaning |
|---|---|
| Bull Market | Long-term upward market trend |
| Bear Market | Long-term downward market trend |
| Range-Bound Market | Market oscillating within a range |
| Volume | Number of shares traded in a given period |
| Liquidity | Ease of buying and selling a stock |
| Pullback | Temporary decline within an uptrend |
| Bounce | Temporary recovery within a downtrend |
Summary
Once you master these basic terms, you will understand most financial news and stock market analysis.
Start with the basics and gradually go deeper. For more introductory knowledge, see How to Read Stock Charts and First Things to Know Before Buying Stocks. Want to dive deeper into stock selection strategies? Visit our Strategy Center for systematic trading methods, or head to the Tutorial Center to learn more technical analysis.