Lessons and contents
Terms A to Z
A
- Ask
- The price at which you can BUY. It is always slightly higher than the bid.
B
- BUY (long)
- A position that profits if the price rises and loses if it falls.
- Balance
- The money in your account counting only closed trades. It does not change while a trade is open.
- Bearish
- Expecting, or showing, falling prices.
- Bid
- The price at which you can SELL. It is always slightly lower than the ask.
- Breakeven
- A trade that finishes with no profit and no loss. Traders often move a stop loss to the entry price to aim for this (costs still apply).
- Breakout
- Price moving beyond a support or resistance level, ideally with a candle closing beyond it.
- Bullish
- Expecting, or showing, rising prices.
C
- CFD (contract for difference)
- A contract between you and a broker that follows the price of an asset without you owning it. CFDs are leveraged and high risk.
- Candlestick
- A chart bar showing open, high, low and close for one time period.
- Commission
- A fee some brokers charge per lot traded, on top of the spread.
- Contract size
- How many units one lot represents. For XAUUSD it is commonly 100 troy ounces per 1.00 lot, but it varies by broker.
- Copy trading
- A service where a platform automatically copies another trader's trades into your account. It is different from signals, which are ideas you place yourself. The Gold Desk shares signals only and does not offer copy trading.
D
- Demo account
- A practice account that uses virtual money and real-time prices.
- Drawdown
- A fall in account value from a previous peak, usually shown as a percentage.
E
- Entry
- The price at which a trade is opened.
- Equity
- Your balance plus or minus the floating profit or loss on open trades.
F
- False breakout
- A move beyond a level that quickly reverses back inside it.
- Floating profit/loss
- The unrealised result of an open trade. It changes with every price tick until the trade is closed.
- Free margin
- Equity minus the margin already in use. It is what is available to open more trades or absorb losses.
H
- Hedging account
- An MT5 account type where several positions on the same symbol can be open at once, including opposite directions.
L
- Leverage
- Controlling a larger position than your deposit by using borrowed exposure. It magnifies profits and losses equally.
- Limit order
- A pending order to buy at a lower price or sell at a higher price than the current market.
- Liquidity
- How easily something can be bought or sold without moving the price much.
- Lot
- The standard unit of trade size. 1.00 lot is a standard lot, 0.10 is a mini lot, 0.01 is a micro lot at most brokers.
M
- Margin
- The amount of your money set aside as a deposit to keep a leveraged trade open.
- Margin call
- A warning from the broker that your equity is low relative to the margin used. Trades may be closed automatically if it falls further (a stop-out).
- Market order
- An order to buy or sell immediately at the best available current price.
- Moving average
- The average closing price over a set number of periods, drawn as a smoothed line.
N
- Netting account
- An MT5 account type where only one position per symbol exists. Opposite trades reduce or reverse it.
P
- Pending order
- An order placed to trigger later when price reaches a chosen level (limit or stop orders).
- Pip / point
- Tiny units of price movement. Their size varies by instrument and broker, so check your broker's specification.
- Position size
- How large a trade is, usually in lots.
- Pullback
- A temporary move against the main trend before it resumes.
R
- RSI (Relative Strength Index)
- A momentum indicator from 0 to 100 often used to judge whether a move looks stretched.
- Resistance
- A price area where selling has previously stopped price from rising.
- Risk-to-reward ratio
- The potential reward of a trade compared with the amount risked, for example 1 : 2.
S
- SELL (short)
- A position that profits if the price falls and loses if it rises.
- Signal
- A shared trade idea with a direction, entry, stop loss and take profit.
- Slippage
- The difference between the price you expected and the price you got.
- Spread
- The gap between the bid and ask prices. It is a cost of every trade.
- Stop loss (SL)
- A preset exit that closes a trade at a chosen loss level.
- Stop-out
- Automatic closing of trades by the broker when margin level falls below a set threshold.
- Support
- A price area where buying has previously stopped price from falling.
- Swap
- An overnight financing charge or credit for holding a leveraged position past the daily rollover.
T
- Take profit (TP)
- A preset exit that closes a trade at a chosen profit level.
- Timeframe
- The period each candle represents, such as 5 minutes, 1 hour or 4 hours.
- Trailing stop
- A stop loss that follows price as it moves in your favour, but does not move back.
- Trend
- A sustained move in one direction, shown by higher highs and higher lows (up) or lower highs and lower lows (down).
- Troy ounce
- The unit gold is priced in: about 31.1 grams.
V
- Volatility
- How much and how fast price moves. High volatility means bigger swings and more risk.
X
- XAUUSD
- The market code for gold priced in US dollars. XAU is one troy ounce of gold, USD is the US dollar.
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