Glossary
XAUUSD — the price of one troy ounce of gold in US dollars.
Pip — the smallest standard price move. For gold it is usually $0.10; on most forex pairs 0.0001.
Lot — a standard trade size. One gold lot is 100 ounces; 0.01 lot is one ounce.
Spread — the gap between buy and sell price. It is the cost of entering a trade.
Leverage — trading a position larger than your deposit. It multiplies both gains and losses.
Margin — the deposit a broker holds against a leveraged position.
Stop-loss — an order that closes a trade at a set price to cap the loss.
Take-profit — an order that closes a trade at a set price to lock in a gain.
Support — a price area where buying has previously stopped a fall.
Resistance — a price area where selling has previously stopped a rise.
Drawdown — the drop from an account's highest balance to its lowest point after.
Risk-reward ratio — potential gain divided by potential loss on one trade, for example 2:1.
Session — the hours a major financial centre is open: Asia, London, New York.
DXY — the US Dollar Index, measuring the dollar against a basket of currencies.
Real yield — a bond's interest rate minus inflation. Falling real yields usually support gold.
Slippage — the difference between the price you expected and the price you actually got.
Swap — the overnight interest charged or paid for holding a leveraged position.
Trading plan — your written rules for entries, exits, size and review.
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