Gold Trading 101: XAUUSD basics
Understand the key terms and mechanics of gold trading before applying them to a live chart.
Lot size
Lot is the contract size used to trade gold. Broker contract specifications can differ, so check contract size and point value before calculating exposure.
Leverage and margin
Leverage changes the margin required to open a position; it does not reduce the market risk. High leverage without a defined stop can exhaust free margin quickly.
Spread and swap
Spread is the difference between bid and ask. Swap is the financing cost or credit for holding a position overnight. Both belong in the plan.
Stop loss, take profit and stop out
A stop loss limits planned damage, take profit defines the exit objective, and stop out is the broker protection mechanism when margin becomes too low.