Trade Forex Trading

What's Gold?

XAUUSD is a term that is often used by xauusd investors & traders to describe trading activity in the market that is carried out by traders, traders and speculators.

In trading a gold trader can buy/sell a xauusd. A trader will buy a instrument if they think value of trading instrument is likely to appreciate in the future. A Trader will sell a instrument if they think value of instrument is likely to depreciate in the future.

The Market is an over the counter market which means trading is carried out through a network of the big international banks; this xauusd network is commonly referred to as the interbank network. This interbank xauusd network consists of banks and brokers which are in different locations. This interbank network is responsible for providing prices at any given time to the online traders and other market participants that want to buy or sell xauusd. In trading the price is constantly changing & this price is denoted by what is referred to as a Quote. In the Price is displayed as a Quote. This xauusd quote is constantly changing and the interbank network will update automatically the current quote and traders can then trade the trading instrument at the current price.

XAUUSD Quotes

Gold prices of xauusd is displayed using Quotes. This is price at which any trader wanting to trade this instrument will trade at.

Because prices are constantly changing it means that the online traders can take advantage of these market price movements to earn profits by analyzing and trading these price trend movements. The price of any xauusd instrument will keep moving because of demand supply. This is because there are many participants gold trading instrument in the open market and hence this means that the price quotes will get determined by the current market forces. These market forces might be determined by factors/aspects like an increase in demand for xauusd.

Gold Pips

In trading the price moves are measured using points commonly known as Pips in the market. The pip is used in calculating the profit or loss that One makes in a given trade transaction. For exemplification if a gold trader makes a position which moves 50 pips in his direction, then the profit of the trader will be calculated as 50 xauusd pips. Pip in xauusd is represented as the second last decimal point in the Quote and it's made up of pipettes - pipettes are fractions of a Pip.

XAU/USD Lots

In trading - xauusd gold trading instruments are traded in units known as xauusd lots or xauusd contracts.

Leverage

Because not many traders can afford to trade large units of xauusd contracts, there is leverage in xauusd which means that gold traders can borrow money and use the borrowed money to make trades with. For exemplification leverage of 100:1 means that a trader with capital of $10,000 can borrow up to 100 times using the 100:1 leverage option & henceforth after borrowing using this leverage the online trader will now have a total of $10,000 multiplied by 100, which means one will have total of $1,000,000 dollars. This leverage is what makes XAU USD Trade accessible to the retail traders because the retail traders can begin with little amount of capital of their own and use leverage to borrow the rest of the funds required for trading. The money that the trader deposits is known as a trader's margin and one can continue borrowing money using this leverage option as long as they have the required margin in their account. This is why the online traders must have the required gold account balance in their trading account to open the trades they want to.

Learn More Lessons and Guides:

Forex Market Traders Seminar Gala

Forex Market Traders Seminar

XAUUSD Broker