The stock market has its own dialect — a blend of finance, math, and psychology. Traders and investors use shorthand to describe market trends, technical patterns, and emotional conditions. Understanding these terms bridges the gap between confusion and confidence.
This course translates the most common and modern financial terminology, acronyms, and charting language into clear, plain-English explanations. By the end, you’ll be fluent in the language of Wall Street.
Lesson 1: Market Foundations & Common Acronyms
Objective: Learn the core terms that define how markets operate.
Key Terms:
Stock / Share / Equity — Ownership in a company.
ETF (Exchange-Traded Fund) — Basket of securities traded like a stock.
Index — Group of stocks representing a portion of the market (e.g., S&P 500, Dow, Nasdaq).
IPO (Initial Public Offering) — A company’s first sale of shares to the public.
SEC (Securities and Exchange Commission) — Regulates U.S. markets.
CPI (Consumer Price Index) — Inflation measure.
GDP (Gross Domestic Product) — Economic growth metric.
EPS (Earnings Per Share) — Company profit per share.
P/E (Price-to-Earnings Ratio) — Stock price divided by earnings.
YOY (Year-over-Year) — Performance compared to last year.
MoM (Month-over-Month) — Sequential monthly change.
Lesson 2: Market Movement & Sentiment
Objective: Understand how markets move and what defines trends.
Key Terms:
Bull Market — Rising prices and optimism.
Bear Market — Falling prices and pessimism.
Correction — A short-term 10–20% decline during a bull run.
Rally — Rapid upward move in prices.
Reversal — Change in market direction (bull to bear or vice versa).
Consolidation / Sideways Market — Period of limited movement or indecision.
Volatility (VIX) — Measurement of expected market fluctuation.
Volume — Number of shares traded; higher volume = stronger conviction.
Sentiment — Investor mood (greed, fear, or neutrality).
Risk-On / Risk-Off — Market attitude toward risk-taking.
Lesson 3: Company Fundamentals & Valuation
Objective: Learn the language of financial health and valuation.
Key Terms:
Revenue / Sales — Money earned from operations.
Gross Margin — Profit after direct costs.
EBIT / EBITA / EBITDA — Earnings before expenses and depreciation.
FCF (Free Cash Flow) — Cash remaining after operations and investments.
ROE (Return on Equity) — Profitability relative to shareholder capital.
ROA (Return on Assets) — Profitability relative to total assets.
P/S (Price-to-Sales) — Price compared to revenue per share.
P/B (Price-to-Book) — Price compared to company’s book value.
PEG (Price/Earnings to Growth) — Valuation adjusted for growth rate.
TTM (Trailing Twelve Months) — Performance over last 12 months.
Q/Q, YOY: Quarter-over-quarter or year-over-year growth.
Lesson 4: Trading Mechanics
Objective: Learn order execution and trade management terms.
Key Terms:
Bid / Ask / Spread — Buy price, sell price, and difference between them.
Market Order / Limit Order / Stop Order — Different order types.
Stop-Loss / Trailing Stop — Tools for limiting downside.
Short Selling (Shorting) — Betting on price decline.
Margin / Leverage — Using borrowed funds for bigger positions.
T+1 Settlement: U.S. standard — trade finalizes one day after execution.
PDT (Pattern Day Trader): Accounts < $25K with 4+ intraday trades in 5 days.
Liquidity: Ease of entering/exiting a trade.
Execution Slippage: Difference between expected and actual fill price.
Lesson 5: Portfolio and Strategy Language
Objective: Learn how portfolios are structured and evaluated.
Key Terms:
Diversification — Spreading investments to manage risk.
Asset Allocation — Mix of stocks, bonds, cash, and alternatives.
Benchmark — Standard for performance comparison (e.g., S&P 500).
Alpha — Excess return above benchmark.
Beta — Volatility compared to the market (1.0 = market average).
Sharpe Ratio — Measures reward per unit of risk.
Drawdown — Percentage drop from peak to trough.
CAGR (Compound Annual Growth Rate) — Yearly growth rate over time.
DCA (Dollar-Cost Averaging) — Investing equal amounts regularly.
DRIP (Dividend Reinvestment Plan) — Reinvest dividends automatically.
Rebalancing — Adjusting portfolio to maintain target allocations.
Lesson 6: Economic and Policy Terms
Objective: Understand how the economy drives the market.
Key Terms:
FOMC (Federal Open Market Committee) — Sets U.S. interest rates.
Fed Funds Rate — Rate banks charge each other overnight.
QE (Quantitative Easing) — Fed buys bonds to stimulate economy.
QT (Quantitative Tightening) — Fed sells bonds to slow inflation.
PMI (Purchasing Managers Index) — Tracks business expansion/contraction.
NFP (Non-Farm Payrolls) — Monthly jobs report.
Inflation / Deflation / Stagflation — Price movement trends.
Yield Curve: Relationship between bond yields and maturity; inversion often signals recession.
Fiscal Policy / Monetary Policy — Government spending vs. central bank control.
Recession / Expansion / Recovery: Phases of the business cycle.
Lesson 7: Charting, Patterns, and Technical Terminology (Expanded)
Objective: Speak the language of traders, chartists, and technical analysts.
Trend & Market Structure Terms
Uptrend: Series of higher highs and higher lows.
Downtrend: Series of lower highs and lower lows.
Sideways / Range-Bound: No clear direction, flat momentum.
Support: Price level where buying typically halts a decline.
Resistance: Price level where selling halts a rally.
Breakout: Price moves above resistance with volume confirmation.
Breakdown: Price falls below support, signaling weakness.
Pullback / Retracement: Temporary reversal against trend.
Reversal: Trend change (up to down, or vice versa).
Continuation Pattern: Trend pause before resuming in same direction.
Common Chart Patterns & Acronyms
H&S (Head and Shoulders): Reversal pattern signaling top.
IHS (Inverse Head and Shoulders): Reversal pattern signaling bottom.
DCB (Dead Cat Bounce): Short-lived recovery after sharp decline.
ATH (All-Time High): Stock’s highest price ever recorded.
ATL (All-Time Low): Stock’s lowest price ever recorded.
Double Top / Double Bottom: Reversal patterns marking tops or bottoms.
Cup and Handle: Bullish continuation pattern.
Wedge / Triangle / Flag / Pennant: Short-term continuation or reversal formations.
Gap Up / Gap Down: When price opens significantly above or below previous close.
Breakout Volume: High trading volume confirming a breakout’s strength.
Fakeout / Bull Trap / Bear Trap: False breakouts designed to mislead traders.
Technical Indicators & Tools
MA (Moving Average): Average price over time (e.g., 50-day, 200-day).
EMA / SMA: Exponential vs. simple moving averages.
RSI (Relative Strength Index): Measures momentum; >70 = overbought, <30 = oversold.
MACD (Moving Average Convergence Divergence): Identifies trend momentum.
VWAP (Volume Weighted Average Price): Intraday benchmark for fair value.
Bollinger Bands: Volatility bands around a moving average.
OBV (On-Balance Volume): Measures cumulative volume flow.
ADX (Average Directional Index): Strength of a trend (above 25 = strong).
Fib Levels (Fibonacci Retracement): Key levels (38.2%, 50%, 61.8%) for pullbacks.
Divergence: Price and indicator moving in opposite directions — often a reversal signal.
Trader Slang & Modern Terms
Buy the Dip (BTD): Buying during pullbacks.
Sell the Rip: Selling into rallies.
Bagholder: Someone holding losing positions.
Diamond Hands: Holding despite volatility (internet slang).
Paper Hands: Selling too quickly under pressure.
YOLO: “You Only Live Once” — taking oversized speculative trades.
FOMO: Fear of Missing Out — chasing after missed moves.
Capitulation: Panic selling at market bottom.
Confluence: Multiple indicators aligning to confirm a trade idea.
Lesson 8: Catalysts, Events, and Risks
Objective: Recognize what moves markets and how to manage risk.
Key Terms:
Earnings (ER): Quarterly company report.
Guidance: Forward-looking company projections.
Catalyst: Event that drives price action (earnings, news, merger).
Buyback: Company repurchases its own stock.
Split / Reverse Split: Change in share count, affecting price.
Insider Trading: Executives buying or selling company shares.
Hedge: Strategy to reduce downside risk.
Drawdown: Portfolio or asset decline from peak to low.
Tail Risk: Extreme, unlikely market event.
Black Swan: Rare, unpredictable event with massive impact.
Lesson 9: Taxes and Long-Term Wealth
Objective: Know how taxation and wealth transfer impact investors.
Key Terms and Acronyms:
STCG / LTCG: Short-Term vs. Long-Term Capital Gains.
RMD (Required Minimum Distribution): Mandatory IRA withdrawals.
401(k), IRA, Roth IRA: Retirement account structures.
HSA (Health Savings Account): Tax-advantaged medical account.
Tax-Loss Harvesting: Selling losers to offset gains.
Step-Up Basis: Heirs inherit assets at market value.
Estate Planning / Inheritance Tax: Passing wealth efficiently.
Lesson 10: Application & Integration
Objective: Practice fluency through real-world exercises.
Decode a company’s earnings call transcript for acronyms.
Identify 10 chart patterns on TradingView.
Watch CNBC/Bloomberg and translate every abbreviation used.
Journal daily using at least 5 new trading terms.
Join an investor community to apply terminology in conversation.
Course Summary
Terminology isn’t just language — it’s insight.
When you know the words, you understand the logic behind the market’s movement.
Fluency builds clarity. Clarity builds conviction. Conviction builds wealth.