Gold trading terms: overbought and oversold

In an unstable global environment, gold trading offers both opportunity and challenge: you can use gold as a hedge and inflation offset, or trade price swings. Beginners should learn the jargon first — here, overbought and oversold.

Overbought

Buying force far exceeds selling at a point, suggesting the market is near a top and a technical pullback may follow. RSI and stochastic-style tools can help. RSI above 80 is often treated as an overbought zone.

Oversold

Selling force far exceeds buying, suggesting a market near a bottom and a technical bounce may follow. Stochastic-type indicators can help; they relate to the day’s trading range.

Other terms include long, short, open, close, lots, spread, margin, margin ratio, stop-loss, take-profit, open/close, resistance and support. You can learn them at Junan International and in live trading.

Junan International offers spot and physical gold products. You may apply for an account free of charge and claim new-client bonuses. Markets move fast — invest with caution.