Definitions

Capital gains: refer to the profit earned after selling an asset or investment for a higher price than you paid for it.

Exchange: or stock exchange, is a marketplace where investors and traders buy and sell stocks. New York Stock Exchange (NYSE), Nasdaq, Shanghai Stock Exchange, Tokyo Stock Exchange, Hong Kong Stock Exchange, London Stock Exchange, Australian Securities Exchange, and SIX Swiss Exchange.

Margin: Sometimes referred to as “buying on margin,” margin is when investors borrow money from a broker to purchase a stock, similar to a loan.

Brokerage Account: is an investment account with a licensed financial institution (a brokerage firm) that allows you to buy and sell various investments, such as stocks, bonds, ETFs, and mutual funds.

Bid: The highest price a buyer is willing to pay for a stock.

Ask/Offer: The lowest price a seller is willing to accept for a stock.

Bid-Ask Spread: The difference between the bid and ask prices.

Market Order: An order to buy or sell a stock immediately at the best available current price.

Limit Order: An order to buy or sell a stock only at a specified price or better.

Stop-Loss Order: An order to sell a stock when it reaches a certain price to limit potential losses.

Going Long: Buying a stock with the expectation that its price will rise.

Going Short: Borrowing shares, selling them, and then buying them back later to return to the lender, profiting from a price decrease.

Bull Market: A market where stock prices are generally rising, or are expected to rise.

Bear Market: A market characterized by falling stock prices, often defined as a decline of 20% or more from recent highs.

Volatility: The degree of variation in a stock's price over a given period; high volatility means rapid and unpredictable price swings.

Stock/Share: A unit of ownership in a publicly traded company.

Equity: Another term for stocks, representing ownership in a company.

Bond: A debt security where an investor loans money to a company or government for a set period, receiving interest payments.

Mutual Fund: A collection of stocks, bonds, or other securities that is professionally managed.

ETF (Exchange-Traded Fund): Similar to a mutual fund, but traded on stock exchanges like an individual stock

Futures: are a type of derivative contract agreement to buy or sell a specific commodity asset or security at a set future date for a set price.

Liquidity: The ease with which a security can be bought or sold in the market without significantly affecting its price.

Market Capitalization: The total market value of a company's outstanding shares.

IPO (Initial Public Offering): The first time a private company sells shares of its stock to the public.

Dividend: A portion of a company's profits that is paid out to its shareholders.

Taxes: You pay taxes on any dividends, interest, or capital gains earned within the account.

Capital Gains Tax: Tax on gains (profits) you make from the sale of capital assets, like stocks and other investments. Under U.S. tax laws, if you hold an investment for more than a year before you sell it for a gain, you may qualify for a long-term capital gains tax rate. Gains from investments held for less than a year are usually considered short-term capital gains and are taxed as ordinary income (which is usually a higher tax rate than long-term capital gains).

Options:
Call Options: A call option gives the buyer the right to buy stock. Investors buy calls when they believe the stock price will go up.
Put Options: A put option gives the buyer the right to sell stock. Investors buy puts when they expect the stock price to fall.

Right, Not Obligation: The most important aspect is that the option gives the buyer the option to buy or sell, not a requirement to do so.

Strike Price: This is the fixed price at which the stock can be bought or sold if the option is exercised.

Expiration Date: The contract has a limited lifespan, after which it becomes worthless if not exercised.

Underlying Asset: The stock or exchange-traded fund (ETF) on which the option contract is based.

Derivatives: Options are called derivatives because their value is derived from the value of the underlying stock.

Support: is the price level at which demand is thought to be strong enough to prevent the price from declining further.

Resistance: is the price level at which selling is thought to be strong enough to prevent the price from rising further.

Candlestick patterns: These patterns, which can range from a single candle to a group of candles, represent a specific period's open, high, low, and closing prices and are categorized as bullish, bearish, or continuation patterns, signaling potential trend reversals or continuations.

Bullish Patterns: Indicate potential upward price movement or a reversal of a downtrend.

Bearish Patterns: Suggest potential downward price movement or a reversal of an uptrend.

Continuation Patterns: Signal that the existing trend is likely to continue.

Candles:

Body: The rectangular section of a candle representing the range between the opening and closing prices. A long body suggests strong buying or selling pressure, while a short body indicates indecision. (ask about this last part, and I will explain)
Wick: Lines extending from the body that show the highest and lowest prices reached during the period.
Colors: Typically green or white for a bullish (upward) candle, and red or black for a bearish (downward) candle.
1. Green: For a bullish (upward) candle.
2. Red: For a bearish (downward) candle.