Market basics: the vocabulary every SMC setup is built on
Every later module assumes you can read a candle, know what a pip and a lot are on gold, understand the spread you pay on every trade, and can size a position by risk rather than by feel. This module makes all of that concrete, with each idea drawn on a chart. Nothing here is Smart Money Concepts yet; it is the floor the whole method stands on.
How to read a single candle
A candle shows four prices for its period: the open, the high, the low and the close. The thick part is the body, between open and close. The thin lines are the wicks (or shadows), reaching to the high and the low. A candle that closes above its open is usually drawn in one colour (here green), one that closes below in another (red). The body tells you who won the period; the wicks tell you where price was rejected.
Timeframes
The same market looks different on each timeframe because each candle packs a different amount of time. A single H4 candle contains four H1 candles, sixteen M15 candles, and so on. Higher timeframes (D1, H4) give you context and bias; lower timeframes (M15, M5) give you timing. Later modules read context high and execute low. No timeframe is more real than another; they are different zoom levels on one stream of trades.
Bid, ask and the spread
At any moment there are two prices: the bid (what buyers offer, where you sell) and the ask (what sellers want, where you buy). The gap between them is the spread, and it is a cost you pay on every trade before price has to move at all. On gold the spread widens around news and the daily rollover, which is why the course avoids trading those windows. A setup that only works on a tiny target dies to the spread.
Pips, lots and leverage
On XAUUSD a pip is usually a $0.10 move (some brokers quote the dollar itself; know which). A standard lot is 100 ounces, so a $1 move is $100 per lot; a mini lot (0.1) is $10 per dollar, a micro (0.01) is $1. Leverage lets you control a large position with a small margin, which magnifies both result and risk. Leverage is not the thing that makes you money or loses it; your position size relative to your stop is. That is the next section.
Trading sessions
Gold does not move evenly through the day. The Asian session is usually quiet and often builds a range. The London open brings the first real volume and frequently the first manipulation of that range. The New York open, and the London-New York overlap, carry most of the day's expansion. Module 11 covers this in depth; for now, know that when you trade matters as much as what you trade.
Risk and reward, the only maths that matters
Define risk in money, not in points, and size every trade so a loss costs the same small fraction of the account (Module 14 uses half a percent to one percent). Your risk is the distance from entry to stop; your reward is the distance from entry to target, expressed as a multiple of risk (R). A setup risking one unit to make two is 1:2, or 2R. With honest 2R setups you can be wrong more often than right and still grow the account. Every entry model in this course is judged by this number, not by how clever it looks.
FAQ
What is a pip on XAUUSD?
On most brokers a pip on gold is a $0.10 move, so a move from 2400.00 to 2401.00 is ten pips. A few platforms count the whole dollar as the unit, so always confirm how your broker quotes it before sizing a trade.
How much is one lot of gold worth per dollar move?
A standard lot is 100 ounces, so a $1 move is $100. A mini lot (0.1) is $10 per dollar and a micro (0.01) is $1. Size from your stop distance and the money you are willing to risk, not from the lot size itself.
Why does the spread matter so much?
Because you pay it on every trade before price moves in your favour. On a small target the spread can be a large fraction of your reward, which is why this course targets at least 2R and avoids the news and rollover windows where gold's spread widens.
Do I need to understand leverage to trade SMC?
You need to understand position sizing; leverage is just what lets a small margin hold the position. Risk is set by how far your stop is and how many lots you hold, never by the leverage number.
When does gold move the most?
Around the London open, the New York open, and the London-New York overlap. The Asian session is usually quieter and often builds the range that London then sweeps. Module 11 covers sessions and kill zones in detail.