Clear explanations of the ideas behind market moves. Educational content only — not investment advice.
REX EXPLAINS
What is CPI?
The Consumer Price Index (CPI) measures the average change in prices that households pay for a basket of goods and services, such as food, energy, rent and transport. In the US it is published monthly by the Bureau of Labor Statistics.
Markets watch both headline CPI and core CPI, which excludes food and energy because those prices are volatile. A reading above expectations suggests inflation is sticky, which can push the Federal Reserve to keep interest rates higher for longer.
REX: What matters is the surprise versus the forecast, not the number alone.
REX EXPLAINS
Why does gold react to yields?
Gold does not pay interest or dividends. When bond yields rise — especially real yields, which are yields after inflation — holding gold means giving up a higher safe return. That opportunity cost tends to weigh on gold.
When real yields fall, the cost of holding gold drops and it often becomes more attractive. The US dollar matters too: gold is priced in dollars, so a stronger dollar can make it more expensive for other buyers. These relationships are tendencies, not rules, and they can break during crises or heavy central-bank buying.
REX: Watch real yields and the dollar together, not in isolation.
REX EXPLAINS
What is a breakout?
A breakout happens when price moves decisively beyond a level that previously contained it, such as the top of a range or a trendline. Traders look for it because it can signal the start of a new move.
Many breakouts fail and reverse — often called false breakouts. Confirmation such as a candle close beyond the level, a successful retest, or rising participation helps separate real breaks from noise. A clear invalidation level is essential before acting.
REX: A breakout without a plan for failure is a guess.
REX NOTE
What is market structure?
Market structure describes how price builds its swings. An uptrend prints higher highs and higher lows; a downtrend prints lower highs and lower lows. When neither pattern holds, the market is ranging.
A break of structure — for example, price falling below the last higher low in an uptrend — is an early warning that the trend may be weakening. Structure gives context: it tells you which side has control before you look at any indicator.
REX: Structure first, indicators second.
REX EXPLAINS
What is risk/reward?
Risk/reward compares the distance from your entry to your stop-loss (the risk) with the distance to your target (the reward). Risking 20 points to aim for 40 points is a 1:2 risk/reward.
A favourable ratio does not make a trade good on its own — the probability of reaching the target matters just as much. Position sizing then decides how much of your account that risk represents. Many traders cap risk per trade at a small, fixed percentage of their capital.
REX: Decide the stop before the entry — never after.
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