A luma matte makes a matte using the luminance of a layer. An alpha matte makes a matte using the alpha channel. The alpha channel defines the transparency of a layer and can be created in photoshop to isolate a certain part of your image.
“is there a way of picking a layer beneath it and saying I dont want it to affect that layer?”
No. Since “stencil luma” is a transfer mode, it effects all the layers beneath it. You can use
track mattes to matte individual layers.
I’d suggest you look towards the After Effects help file or consult Trish and Chris Meyer’s After Effects books. You’ll learn this stuff a lot quicker and more in-depth than asking pretty straightforward questions on the board.