What's Gold?
XAUUSD is a term that is commonly used by xauusd investors & traders to describe trading activity in the xauusd market that is carried out by traders, investors & speculators.
In xauusd trading a trader can buy or sell a xauusd. A trader will buy a xauusd instrument if they think the value of the xauusd trading instrument is likely to appreciate in the future. A XAUUSD Trader will sell a xauusd instrument if they think the value of the xauusd instrument is likely to depreciate in the future.
The Gold 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 xauusd brokers which are in different locations. These interbank network is responsible for providing the gold prices at any particular time to the traders and other xauusd market participants who want to buy or sell xauusd. In xauusd trading the gold price is constantly changing and this gold price is denoted by what is known as a XAUUSD Quote. In XAUUSD the XAUUSD Price is displayed as a XAUUSD Trading Quote. This xauusd quote is constantly changing and the interbank network will update automatically the current xauusd quote and traders can then trade the xauusd trading instrument at the current gold price.
XAUUSD Quotes
Gold prices of xauusd is displayed using XAUUSD Quotes. This is the gold price at which any xauusd trader wanting to trade this xauusd instrument will trade at.
Because gold prices are constantly changing it means that gold traders can take advantage of these gold price movements to make profits by trading these gold price movements. The gold price of any xauusd instrument will keep moving because of demand supply. This is because there are many participants xauusd trading instrument in the open xauusd market and therefore this means that the gold price quotes will get determined by the current market forces. These market forces may be determined by factors such as an increase in demand for xauusd.
XAUUSD Pips
In xauusd trading the gold price moves are measured in points commonly known as Pips in the xauusd trading market. The pip is used to calculate the profit or loss that a XAUUSD Trader makes in a particular trade. For example if a trader makes a trade 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 XAUUSD Quote and it is made up of pipettes - pipettes are fractions of a XAUUSD Pip.
XAUUSD Lots
In gold trading - xauusd trading instruments are traded in units known as xauusd lots or xauusd contracts.
XAUUSD Leverage
Because not many traders can afford to trade large units of xauusd contracts, there is xauusd leverage in xauusd which means that gold traders can borrow money and use the borrowed money to make trades with. For example xauusd 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 & therefore after borrowing using this xauusd leverage the trader will have a total of $10,000 multiplied by 100, which means the trader will have a total of $1,000,000. This xauusd leverage is what makes XAUUSD Trading accessible to retail xauusd traders because retail traders can start with little capital of their own & use xauusd leverage to borrow the rest of the money required for trading. The money that the trader deposits is referred to as a xauusd trader’s margin & a trader can continue borrowing money using this xauusd leverage option as long as they have the required xauusd margin in their xauusd account. This is why traders must have the required xauusd account balance in their xauusd account to open the trades they want to.
