summary
Stock investment is directly connected to "understanding of terminology = judgment ability". In this article, we will provide a simple explanation of the basic terms you need to know, and will help you understand how to use them in actual trading.
First, understand the overall picture of stock trading.
Conclusion: Stocks are "established when orders collide in the market."
Reason: The price of stocks is determined by buying and selling between individuals and institutional investors.
Specific example:
- You want to buy it for 100 yen.
- Someone wants to sell it for 100 yen. → Transaction completed at this moment
Understanding terms will be faster if you look at the terms with this system in mind.
Stock exchanges and brands
Conclusion: Stocks are bought and sold as "corporate units (issues)" on the "market (exchange)."
stock exchange
One word explanation: A place to buy and sell stocks Details: A market where company stocks are gathered and bought and sold.
Example:
- Tokyo Stock Exchange
Brand name
One word explanation: Company to invest in Details: Stocks of each company
Example:
- Toyota stocks, Sony stocks, etc.
Execution and price (opening price/closing price)
Conclusion: The moment the transaction is completed is the "execution", and the accumulation of these is the price.
Contract
One word explanation: A sale is completed Details: The moment when a buy order and a sell order match
Opening price/closing price
| term | meaning |
|---|---|
| opening price | the first established price of the day |
| closing price | Price established at the end of the day |
Practical points:
- The “closing price” seen in the news is the standard for market evaluation
The way you look at the board is super important.
Conclusion: When you look at the board, you can see that “supply and demand = rising power”
board
One word explanation: Order list Details: Price and quantity for those who want to buy and those who want to sell
Image:
Sell：105yen（100shares）
Sell：104yen（200shares）
-------------
Buy：103yen（150shares）
Buy：102yen（300shares）
How to read:
- A lot of buying → tends to go up
- Lots of selling → tends to go down
Beginner misconceptions: → The board does not determine the future.
Difference between limit price and market (super important)
Conclusion: Limit price if you value control, market price if you value speed.
limit order
One word explanation: An order that specifies a price Details: Decide "I'll buy (sell) at this price"
Benefits:
- Prevent unfavorable prices
Disadvantages:
- Possibility of not being executed
market order
One word explanation: Order without specifying price Details: Immediately available at current price
Benefits:
- Can be bought/sold immediately
Disadvantages:
- Prices may be unexpected
Stop high/stop low
Conclusion: Stocks have a “daily price movement limit”
stop high/low
One word explanation: upper and lower price limits Details: Limits to prevent sudden rises and falls
Example:
- 1000 yen the day before → Upper limit 1200 yen, etc.
Practical points:
- Stop high = concentration of popularity
- Stop low = rush of selling
Summary
- Stocks are “executed (contracted) when orders match”
- You can get hints about supply and demand by looking at the board.
- Use limit prices and market orders depending on the purpose
- There are restrictions on price movement (stop high/low)
Today's action
- See the “board” in action on a securities app
- Try limit and market with demo
- Check closing prices daily