Stock Market Glossary
The terms, concepts, and strategies retail investors run into most often, organized by topic. Each entry covers the definition, how it is calculated, how it is used in practice, and where it breaks down — in about 4–5 minutes of reading.
Screeners
Valuation
P/E, P/B, P/S and other metrics for judging whether a price is rich or cheap
- P/E Ratio: A Complete GuideWhat the P/E ratio is, how to calculate it, and its limitations.
- Understanding the P/B RatioKey metric for valuing asset-heavy and financial stocks.
- How to Use the P/S RatioUsed to evaluate growth companies that are not yet profitable.
- What is the P/CF Ratio?A cash flow-based metric that avoids accounting distortions.
- EV/EBITDA Meaning and UsageA standard enterprise value multiple used in M&A.
- DCF (Discounted Cash Flow) BasicsExplaining the DCF model, the standard for intrinsic value calculation.
- PEG Ratio — Growth Stock ValuationA P/E ratio adjusted for growth, used to evaluate growth stocks.
- Forward P/E vs. Trailing P/EThe difference between P/E based on expected vs. past earnings.
Fundamental Analysis
ROE, operating margin, debt ratio and other measures of company health
- Interpreting ROE (Return on Equity)A key metric measuring a company's capital efficiency.
- The Difference Between ROA and ROETotal asset efficiency, including debt.
- Meaning of Operating MarginA metric that shows core business profitability at a glance.
- Gross Margin and Industry DifferencesSaaS 80% vs Retail 20% — Why the big difference?
- How to Read the Debt-to-Equity Ratio (D/E)Debt proportion relative to equity. Compare appropriate levels by industry.
- Meaning of Current RatioA short-term solvency indicator. Over 200% is considered stable.
- Understanding Free Cash Flow (FCF)Cash available for dividends, share buybacks, and M&A.
- Why is EPS Growth Important?The fundamental driver of long-term stock price appreciation.
- Dividend Yield and Dividend Growth StocksCalculating dividend yield and dividend growth investing strategies.
- Meaning of the Beta (β) CoefficientVolatility relative to the market. Distinguishes defensive vs. cyclical stocks.
- Using Insider Buy/Sell FilingsEvaluating management confidence through Form 4 filings.
- Analyzing Share BuybacksEffects of share buybacks on stock price and EPS.
Technical Analysis
Moving averages, Bollinger Bands, RSI and other chart-based indicators
- Moving Average (MA) BasicsMeaning of 5, 20, 60, 120-day MAs, and golden/death crosses.
- Reading Volatility with Bollinger BandsPractical application of standard deviation-based price channels.
- Interpreting RSI (Relative Strength Index)A key momentum indicator for identifying overbought and oversold conditions.
- How to Use the MACD IndicatorDetecting trend reversals using the difference between short and long-term MAs.
- 10 Candlestick Chart PatternsKey patterns like hammer, morning star, and long black candlestick.
- How to Draw Support and Resistance LinesVisualizing the boundaries of buying and selling psychology.
- Distinguishing Accumulation and Distribution with VolumeWhat volume tells you before price does.
- Reading Short InterestAssessing short interest levels and the potential for a short squeeze.
Trading Strategy
Exit plans, stop-losses, position sizing and other practical trading rules
- Exit Strategy — Setting Target and Stop-Loss PricesHow to pre-design emotion-free selling rules.
- Criteria for Setting a Stop-Loss PriceThe principle of limiting losses. Methods include ATR, % from high.
- Position Sizing and the Kelly CriterionMathematically calculating how much to allocate to a single stock.
- Pros and Cons of Dollar-Cost Averaging (DCA)Is regular fixed-amount investing truly advantageous? A mathematical look.
- Portfolio Rebalancing FrequencyComparing monthly, quarterly, and annual rebalancing.
- Risk-Reward Ratio (R:R) and Expectancy ThinkingThe concept of risk-reward ratio, more important than win rate.
- Principles of Trend-Following TradingA systematic approach to riding long-term trends.
- Contrarian InvestingThe rationale behind buying when the majority is fearful.
- Earnings Surprise TradingStrategy for responding to quarterly earnings report events.
Portfolio
Principles of diversification, rebalancing, and asset allocation
- Diversification — How Many Stocks Are Enough?Calculating the optimal number of stocks based on correlation and volatility.
- Core-Satellite StrategyDesigning a portfolio with an ETF core and individual stock satellites.
- The Current State of the 60/40 PortfolioRe-evaluating recent performance of the classic 60% stock, 40% bond strategy.
- Geographic Diversification — US, KR, Emerging MarketsOvercoming Korean home bias and global diversification ratios.
- Mixing ETFs and Individual StocksPros and cons of a hybrid active-passive strategy.
Macro
How interest rates, exchange rates, and inflation move equities
- Impact of FOMC and Policy Rates on StocksHow Fed interest rate decisions transmit to the stock market.
- What an Inverted Yield Curve MeansShort-term vs. long-term bond yield inversion and recession prediction.
- How to Interpret CPI ReleasesHeadline vs. core CPI differences and market reactions.
- Exchange Rate (USD/KRW) and Korean StocksImpact of the USD/KRW exchange rate on foreign investor flows.
- Bond Yields vs. Stock ReturnsComparing the two asset classes from an asset allocation perspective.