150 Stock Market Terms Every Beginner Investor in Nepal Should Know

If you are new to the stock market, understanding the language of investing is one of the first steps toward becoming a more informed investor.

From shares, IPO and dividends to support, resistance, RSI, MACD, volume, breakout and moving averages, stock-market terminology can sometimes feel complicated.

This beginner-friendly guide explains 150 important stock market terms in simple English, especially useful for people learning about the Nepal stock market, NEPSE, technical analysis and fundamental analysis.

Note: This guide is intended especially for beginners who are learning the stock market. It is not intended to replace professional investment research or financial advice.

150 Stock Market Terms Explained Simply

A. Basic Stock Market & Company Terms

1. Share — A small unit representing ownership in a company.

2. Stock — A general term commonly used for shares or equity ownership.

3. Market Capitalization (Market Cap) — The total market value of a company's outstanding shares.

4. Face Value — The nominal or assigned value of a share.

5. Market Price — The current price at which a share is trading in the market.

6. IPO (Initial Public Offering) — The process through which a company offers its shares to the public for the first time.

7. FPO (Further Public Offering) — Additional shares issued to the public by a company that has already made a public offering.

8. Right Share — Additional shares offered to existing shareholders, usually according to their existing ownership.

9. Bonus Share — Additional shares distributed to existing shareholders from eligible reserves or retained earnings, according to the company's approved distribution.

10. Dividend — A return distributed by a company to its shareholders, commonly in cash or shares.

11. EPS (Earnings Per Share) — The portion of a company's profit attributable to each outstanding share.

12. P/E Ratio (Price-to-Earnings Ratio) — A valuation ratio showing how much investors are paying for each unit of a company's earnings.

13. Book Value — Net assets attributable to shareholders divided by the number of outstanding shares.

14. P/B Ratio (Price-to-Book Ratio) — The relationship between a company's market price and its book value per share.

15. ROE (Return on Equity) — A measure of how effectively a company generates profit from shareholders' equity.

16. ROA (Return on Assets) — A measure of how effectively a company generates profit from its total assets.

17. Revenue — Total income generated from a company's business activities before expenses are deducted.

18. Net Profit — Profit remaining after operating expenses, interest, taxes and other applicable costs.

19. NPL (Non-Performing Loan) — A loan that is no longer generating payments according to the applicable lending terms; commonly used as a measure of asset quality in banks and financial institutions.

20. CAR (Capital Adequacy Ratio) — A measure of a bank's capital relative to its risk-weighted assets.

B. Market Trend & Price Action Terms

21. Trend — The general direction in which a stock or market is moving.

22. Uptrend — A market structure characterized by generally rising prices, often with higher highs and higher lows.

23. Downtrend — A market structure characterized by generally falling prices, often with lower highs and lower lows.

24. Support — A price area where buying interest may emerge and help slow or stop a decline.

25. Resistance — A price area where selling pressure may emerge and limit further price increases.

26. Relative Volume (RVOL) — A measure comparing current trading volume with a normal or average volume level.

27. Float Rotation — A concept describing how frequently the publicly available shares of a company are traded.

28. Volume — The number of shares traded during a particular period.

29. Liquidity — How easily a stock can be bought or sold without significantly affecting its price.

30. Volatility — The degree and speed at which a stock's price fluctuates.

31. Open — The first traded price during a trading session.

32. High — The highest traded price during a particular trading period.

33. Low — The lowest traded price during a particular trading period.

34. Close — The final traded price during a trading session.

35. Bullish Candle — A candlestick that generally indicates the price closed higher than it opened.

36. Bearish Candle — A candlestick that generally indicates the price closed lower than it opened.

37. Doji — A candlestick in which the open and close are very close or equal, often showing indecision.

38. Gap — A price area where the opening price differs significantly from the previous closing price, leaving a gap on the chart.

39. FOMO (Fear of Missing Out) — Buying because of fear that a potential price move or profit opportunity will be missed.

40. Panic Selling — Selling rapidly because of fear, uncertainty or a sharp market decline.

41. Herd Mentality — Following the actions of other investors instead of making an independent analysis.

42. Overtrading — Making more trades than are necessary or consistent with a defined strategy.

43. Revenge Trading — Taking emotional trades after a loss in an attempt to quickly recover the money lost.

44. Risk Management — Techniques used to control and limit potential investment or trading losses.

45. Stop Loss — A predetermined price level used to limit potential losses on a position.

46. Risk-Reward Ratio — A comparison between the potential amount of loss and potential amount of profit in a trade.

C. Market Cycle & Index Terms

47. Bull Market — A prolonged period characterized by broadly rising market prices.

48. Bear Market — A prolonged period characterized by broadly falling market prices.

49. Market Correction — A decline in price following a substantial rise, generally smaller than a major market crash.

50. Rally — A sustained or relatively rapid increase in the price of a stock or market.

51. Crash — A sudden and severe decline in market prices.

52. Index — A statistical measure designed to track the performance of a selected group of securities.

53. Benchmark Index — A reference index used to compare the performance of an investment or market.

54. Market Breadth — A measure of how broadly a market move is supported by rising and falling securities.

55. Risk-On / Risk-Off — Terms describing whether investors are generally seeking higher-risk assets or moving toward relatively defensive assets.

D. Momentum & Trend Structure

56. Momentum — The strength or speed of a price movement.

57. Price Momentum — The directional movement and rate at which a security's price is changing.

58. Trend — The dominant direction of price movement over a particular period.

59. Float Share — Shares available for trading by public investors, excluding shares that may be restricted or closely held.

60. Turnover — The total monetary value of transactions during a specified period.

61. Trend Strength — An assessment of how strongly a price is moving in a particular direction.

62. Trend Continuation — The continuation of an existing price trend.

63. Trend Reversal — A change from one major price direction to another.

64. Acceleration — A situation where price movement becomes faster or stronger.

65. Deceleration — A reduction in the speed or strength of price movement.

66. Impulse Move — A relatively strong and directional price movement.

67. Pullback — A temporary movement against the prevailing trend.

68. Retracement — A partial reversal of a previous price move.

69. Continuation — The resumption of the original trend after a temporary correction or consolidation.

70. Exhaustion — A situation where the strength behind a trend begins to weaken substantially.

71. Overextension — A price move that has traveled significantly away from its recent normal range or structure.

72. Expansion — An increase in price range or volatility.

73. Contraction — A decrease in price range or volatility.

74. Momentum Shift — A change in the direction or strength of price momentum.

75. Momentum Divergence — A situation where price movement and a momentum indicator show conflicting signals.

E. Breakout, Support & Resistance Terms

76. Breakout — A price move through an established resistance or trading boundary.

77. Breakdown — A price move below an established support level.

78. False Breakout — A move above resistance that fails and returns below the breakout area.

79. Fakeout — A deceptive price move that appears to signal a breakout or breakdown but quickly reverses.

80. Resistance — A price area where selling pressure may increase.

81. Support — A price area where buying demand may increase.

82. Supply Zone — An area where selling interest is relatively strong.

83. Demand Zone — An area where buying interest is relatively strong.

84. Base — A period of relatively stable price action that may occur before a significant move.

85. Consolidation — A period when price trades within a relatively defined range.

86. Range Breakout — A price move outside an established trading range.

87. All-Time High (ATH) — The highest price a stock or asset has ever recorded.

88. All-Time Low (ATL) — The lowest price a stock or asset has ever recorded.

89. 52-Week High — The highest price reached during the previous 52 weeks.

90. 52-Week Low — The lowest price reached during the previous 52 weeks.

91. Gap Up — When a stock opens above the previous session's closing price.

92. Gap Down — When a stock opens below the previous session's closing price.

93. Gap Fill — When subsequent price movement returns into and fills a previously created price gap.

94. Breakout Retest — When price returns to test a previous breakout level.

95. Failed Retest — When price cannot successfully hold or reclaim the relevant breakout or support area during a retest.

96. Price Discovery — The process through which market participants establish a new market price through buying and selling.

F. Volume Analysis Terms

97. Volume — The number of shares traded during a specified period.

98. Volume Spike — A sudden and significant increase in trading volume.

99. Volume Surge — A substantial increase in volume compared with normal activity.

100. Volume Confirmation — When trading volume supports the direction or strength of a price move.

101. Volume Divergence — A situation where price action and volume behavior do not confirm each other.

102. Volume Dry-Up — An unusually low level of trading volume.

103. Average Volume — The average number of shares traded over a defined period.

104. Relative Volume (RVOL) — Current trading volume compared with a reference or average volume.

105. Buying Volume — Trading activity associated with stronger buying participation.

106. Selling Volume — Trading activity associated with stronger selling participation.

107. Accumulation — A period in which shares are gradually purchased, often referring to increasing ownership by larger market participants.

108. Distribution — A period in which shares are gradually sold, often referring to increasing selling by larger market participants.

109. Volume Climax — An unusually large volume event occurring around a potentially extreme price move.

110. Volume Breakout — A breakout accompanied by significantly increased trading volume.

111. Volume Profile — A charting tool that displays traded volume across different price levels.

G. Technical Indicators

112. RSI (Relative Strength Index) — A momentum oscillator commonly used to measure the speed and magnitude of recent price changes.

113. RSI 70 — A commonly watched RSI level associated with potentially overbought conditions.

114. RSI 30 — A commonly watched RSI level associated with potentially oversold conditions.

115. RSI Divergence — A situation where price and RSI move in different directions.

116. RSI Failure Swing — A technical RSI pattern that traders may use as a potential reversal signal.

117. MACD (Moving Average Convergence Divergence) — A technical indicator used to study momentum and trend.

118. MACD Line — The primary line calculated in the MACD indicator.

119. Signal Line — A moving average of the MACD line used as a reference for potential signals.

120. MACD Histogram — Bars that illustrate the difference between the MACD line and signal line.

121. ADX (Average Directional Index) — An indicator commonly used to measure trend strength.

122. +DI — The positive directional indicator used in the Directional Movement system.

123. −DI — The negative directional indicator used in the Directional Movement system.

124. Stochastic Oscillator — A momentum indicator commonly used to assess price momentum and potential overbought or oversold conditions.

125. Momentum Oscillator — A technical indicator designed to measure the speed or strength of price movement.

126. Relative Strength — The performance of one stock compared with another stock or a benchmark.

127. Relative Strength Ratio — A ratio used to compare the performance of two assets.

128. Relative Strength Line — A line showing an asset's relative performance against a benchmark.

129. Leading Indicator — An indicator intended to provide signals before a price movement develops fully.

130. Lagging Indicator — An indicator that generally responds after price movement has already occurred.

131. Confluence — When multiple technical indicators, price levels or analytical factors point toward a similar conclusion.

132. Momentum Confirmation — When multiple technical signals support the same momentum direction.

133. Momentum Failure — A situation where price movement continues but momentum fails to strengthen accordingly.

134. Divergence — A situation where price and an indicator move in different directions.

135. Hidden Divergence — A type of divergence that traders may interpret as a potential trend-continuation signal.

136. Bullish Divergence — A situation where price shows relative weakness while momentum indicates improving strength.

137. Bearish Divergence — A situation where price rises while momentum shows relative weakness.

138. Overbought — A condition suggesting that price has risen strongly over a relatively short period and may be extended.

139. Oversold — A condition suggesting that price has fallen strongly over a relatively short period and may be extended.

140. Momentum Exhaustion — A weakening of momentum after a prolonged or rapid price move.

H. Moving Average Terms

141. SMA (Simple Moving Average) — The average price over a specified number of periods, with each period receiving equal weight.

142. EMA (Exponential Moving Average) — A moving average that gives greater weight to more recent prices.

143. 50 SMA — A 50-period simple moving average commonly used as a medium-term trend reference.

144. 200 SMA — A 200-period simple moving average commonly used as a longer-term trend reference.

145. Moving Average Crossover — A situation where one moving average crosses another.

146. Golden Cross — A commonly used technical pattern in which a shorter-term moving average crosses above a longer-term moving average.

147. Death Cross — A commonly used technical pattern in which a shorter-term moving average crosses below a longer-term moving average.

148. Dynamic Support — Support that changes over time, often represented by a moving average or trendline.

149. Dynamic Resistance — Resistance that changes over time, often represented by a moving average or trendline.

150. MA Slope — The direction in which a moving average is angled, helping traders assess its trend direction.

Why Should Beginners Learn Stock Market Terminology?

Understanding stock market vocabulary can make financial reports, company announcements and technical charts much easier to understand.

For someone learning NEPSE analysis, these terms can help build a foundation for:

• Fundamental analysis
• Technical analysis
• IPO and FPO analysis
• Dividend analysis
• Portfolio management
• Risk management
• Price-action analysis
• Volume analysis
• Support and resistance
• Momentum analysis
• Trend identification
• Stock screening

However, knowing terminology alone does not make an investor successful. Investors should also understand financial statements, valuation, risk, market behavior and their own investment objectives.

Learn Stock Market Analysis in Nepal

Want to move beyond memorizing stock market terms?

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Topics can include:

• Understanding NEPSE and the Nepal stock market
• Fundamental analysis
• Technical analysis
• Candlestick patterns
• Support and resistance
• Trend and momentum
• RSI, MACD and ADX
• Volume analysis
• Risk management
• Portfolio management
• IPO, FPO and Right Shares
• Practical stock-market analysis

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Final Takeaway

The stock market has its own language.

Learning these 150 stock market terms can help beginners understand market discussions, company reports, technical charts and investment education more confidently.

Save this guide for future reference and share it with someone who is beginning their stock-market learning journey.

Important: These definitions are educational and simplified for beginners. They should not be treated as a recommendation to buy or sell any particular security.