Trading words, in plain English.

The price you pay when you buy. It is always a little higher than the bid; the gap is the spread.

The price you get when you sell. It is always a little lower than the ask.

Moving your stop loss to the price you entered at, so the trade can no longer lose money. Many traders do this once a trade reaches +1R.

An order to buy below the current price. It fills only if price drops to your level, for example at a support zone.

An order to buy above the current price. It fills only if price rises to your level, for example on a breakout.

Contract for difference. Instead of owning gold, you agree with a broker to exchange the difference in price between when you open and close. Most retail gold trading is done with CFDs.

How far your account has fallen from its highest point. A drawdown of 20% means you are 20% below your best balance.

A price range in a trade idea where the trader is happy to enter, for example "Buy 4030 to 4034".

Your balance plus or minus the profit or loss on trades that are still open.

Borrowed buying power from your broker. With 1:100 leverage, $100 controls a $10,000 position. It makes gains and losses bigger by the same amount.

The unit for trade size. One standard lot of gold is 100 ounces; 0.01 lots (a micro lot) is 1 ounce, the smallest size most brokers allow.

The money your broker sets aside from your balance to keep a leveraged trade open.

A warning that your equity is close to the margin needed for your open trades. If it falls further, the broker can close trades for you.

The trading app many brokers use, on phone and desktop. You place, edit and close trades in it.

Closing part of a position at a target while leaving the rest open, for example a third at each of +1R, +2R and +3R.

The standard unit for a price move. On gold, 1 pip is a $0.10 move and is worth $10 on one standard lot. On most currency pairs it is the fourth decimal place.

How big your trade is, in lots. Worked out from your balance, how much you are willing to lose and how far away your stop loss is.

Your risk on a trade, used as a unit. If you risk $20, then +1R is a $20 profit, +2R is $40 and −1R is a $20 loss.

How much of your account you are prepared to lose if the stop loss is hit. Many traders keep it at 1% or less.

Very short trades, often a few minutes, aiming for small moves. Fast to execute and hard to copy from someone else’s signal.

An order to sell above the current price. It fills only if price rises to your level.

An order to sell below the current price. It fills only if price falls to your level.

The part of the day a major market is open: Asia (Tokyo, Sydney), London and New York. Gold usually moves most when London and New York overlap.

When your order fills at a different price from the one you asked for, usually because price moved fast.

The gap between the bid and the ask. It is the main cost of a trade and it widens around news and quiet hours.

An order that closes your trade automatically at a set loss. It is where your trade idea is proven wrong.

A trade held for more than a day, sometimes for a week or more.

An order that closes your trade automatically at a set profit. Trade ideas often list several: TP1, TP2, TP3.

A suggested trade from an analyst: instrument, direction, entry, stop loss and targets. You still decide whether to take it and how big.

A stop loss that follows price at a set distance as the trade moves your way, and stays put when price turns back.

The symbol for gold priced in US dollars. XAU is the code for one troy ounce of gold.