Hi folks,
Could someone please explain to me how to calculate position size when trading gold? I want to make sure I’m risking the right amount per pip…
Thanks!
If you’re in the US, I wouldn’t spend a whole lot of time playing the retail spot gold market.
The opportunity to trade it leaves the shelves somewhere around July 17th.
If you are not in the US, just use the same 1 to 2% or so rule on risk, and manage your lost sizes according to the stop loss you have in mind.
Thanks, I’m not in the US, and I need a little clarification please…
Here’s an example: Let’s say I want to sell @ 1499.58 with a SL @ 1513.67 and I’m prepared to risk $100.
How many pips would I be risking? (And does Gold use fractional pips like FX?)
What broker? Standard, mini, or micro account? To many variables to correctly answer your question.
Personally, I would download a corresponding demo from your current broker, and see what the smallest lot sizes are available there, and work it up accordingly.
Smallest I can trade is “0.10”. Thanks
That means nothing to me. It could be $1.00, or $0.10 a pip…
Check your broker’s website. They usually list such things somewhere on there.
Sorry, I mean volume - 0.10 of a full lot position (1.00) - is the smallest position I can trade
I understand that… It doesn’t help me, because I don’t know what size your account is rated at.
Again, search your broker for info, or shoot an email off to them. Any self respecting broker will help you.
I see. It’s a micro account. Thanks for your help nonetheless.
Are you able to explain how the quotes work - i.e. how many pips I would be risking in my example?
Is it a true micro? Or a mini that lets you trade micro lots?
If it is a true micro, your per pip gain will likely be $0.01.
If it is a mini, your likely pip gain for a .10 lot will be $0.10.
Okay, let’s forget about the value of each pip. Please just explain how many pips I would be risking in my example. Thanks
To the best of my knowledge, gold uses the last penny as a pip. The brokers that go into the fifth digit of course divide that by 10 as well.
But the upshot is, every dollar gold moves is 100 pips.
Your $14.09 stop loss would be 1,409 pips.
if you use metatrader run this script it should tell you the value of a pip.
pip value.zip (396 Bytes)
Try it on the demo. Or try it at the real thing with the smallest possible lotsize, if demo does not allow trading xau. Just with a very tight stop around 1-2 bucks of xau price. Then you will know for sure what real leverage you can trade. Should not cost you more than around 20 bucks.
The problem, particular with xau, is that brokers have different terms regarding micro/mini etc. etc.