XAGUSD Basics Concepts

Learning to trade the xagusd trading market is much easier for beginners when beginners start by learning the silver trading basics. This way the other xagusd trading concepts become much easier to learn because the new silver trader will have already learnt about the basic ideas before proceeding to the other silver trading concepts.

The silver basics that traders should learn first before starting silver trading are:

What is XAGUSD?

Silver is the simultaneous buying and selling of one financial instrument for another. Silver traders buy & sell for speculation purpose and for the purpose of trying to make a profit. Silver traders will buy silver that they think will appreciate in value and sell silver which they think will depreciate in value.

In Silver traders buy silver instruments when they become undervalued and sell silver instruments when they become overvalued. This is the basic concept of trading silver, as a beginner if you want to become successful when trading silver you must learn to buy undervalued silver instruments & sell overvalued silver instruments. Many Silver traders miss this concept and do the exact opposite buying overvalued silver instruments because that is when these silver instruments seem to be moving up and up and they sell undervalued silver instruments because these silver instruments seem as if they will continue to move lower.

Just like in stock market successful trader buy stocks when the stock xagusd trading price is low & sell stocks when the stock xagusd trading price is high. This is the same trading concept that traders should follow when trading silver.

What is a XAGUSD Instrument?

Silver trading is the simultaneous exchange of one financial instrument for another, for this reason silver is traded in symbols known as silver trading instruments.

What is a XAGUSD Quote?

Because silver instrument is traded in symbols, the xagusd trading price at which these silver instruments are exchange is determined by the silver trading quote.

Silver is quoted in the format of decimal places.

What is a Pip?

Silver is quoted in the format of decimal places. Second last decimal place represents a Pip which is the smallest movement used to calculate profit & loss in silver market moves.

Pip means Silver Price Interest Point: it's a one point move in the silver trading quote.

What is a Lot?

Silver is traded in units known as lots. There is also the Mini lot which is made up of fractions of the standard silver lots & the Micro silver lots which are fractions of the silver trading mini lots.

What is XAGUSD Trading Leverage?

Because not many traders can afford to trade standard silver lots which require a lot of money to trade, there is silver trading leverage in Silver which means that traders can borrow money and use the borrowed money to make trades with. For example silver leverage of 100:1 means that a trader with capital of $10,000 can borrow up to 100 times using the 100:1 silver leverage option & therefore after borrowing using this silver trading 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 silver leverage is what makes Silver accessible to retail silver traders because retail xagusd traders can start with little capital of their own & use silver leverage to borrow the rest of the money required for trading. Money that the trader deposits is referred to as a silver trader’s margin & a trader can continue borrowing money using this silver leverage option as long as they have the required margin in their trading account. This is why traders must have the required account balance in their account to open the trade transactions they want to.

What is Silver Trading Margin?

Margin is the specific amount of money which a trader is required to put aside in order to continue holding an open silver trading leveraged trade. Margin can also be explained as the deposit a trader is required to keep so as to maintain his open positions. This margin is a percentage of account equity that has to be set aside and allocated as a margin deposit for the open positions that are held by a silver trader.