I’ve started looking at the major currency pairs and in my research came across XAU/USD. I don’t understand why this is so different from a currency pair.
There seems to be a huge spread associated with spot gold and no leverage. Is this correct? Does this make day trading XAU/USD impossible? Any help breaking down the differences between currency pairs and spot gold would be greatly appreciated.
I would like to paper trade gold and a few currency pairs but I’d like to adjust my lot size so that I’m risking the same approximate amount per trade.
There is not a huge spread and you can use leverage on gold. It is not impossible to day trade gold. However I would recommend you dont try as your knowledge is poor.
Open up a demo account and adjust your lot sizes until you are happy with how much you want to risk. Demo accounts are there to get used to platforms and learn how to open, close and size positions. Test away and enjoy yourself. Good luck.
Thanks for the response. I have my forex account through Oanda. The lowest the spread goes for gold is 25 pips. All the currency pairs I look at have less than a 4 pip spread so that’s a pretty big difference. Am I missing something?
I can’t find any information about margin requirements or leverage on their site either.
Don’t worry - I never trade live with a new instrument without plenty of back testing and paper trading.
Trade it on demo, its probably 2.5 not 25. I cant explain it. One pip is one whole number eg 1555 to 1556. The decimal numbers are point of a pip in gold.