Gold is a favourite among forex and prop traders. It moves more than most pairs, which is exciting and dangerous in equal measure.
Real yields ↓Gold ↑ (no interest to miss)
US dollar ↓Gold ↑ (cheaper for everyone else)
Fear ↑Gold ↑ (safe haven)
Central bank buyingLong-term support
100 oz1 standard lotat most brokers
$100per $1 moveon 1 lot
$1per $1 moveon 0.01 lot
8:30 ETDanger hourUS data drops
Sizing gold safely
Formula
Lots = risk in $ ÷ (stop distance in $ × 100)
Example
Risk $200 with a $5.00 stop: 200 ÷ (5 × 100) = 0.40 lots.
Pip confusion
Brokers define a gold "pip" differently ($0.01, $0.10 or $1.00). Avoid confusion: think in dollars of price movement.
When gold moves
London open is lively; the New York open and US data at 8:30 am ET are fireworks. Asia often builds a range that London or New York breaks.
Wick says
One lot of gold with a $10 stop is $1,000 of risk. Gold doesn't care that your EUR/USD lot sizes felt fine.
Key takeaways
- Gold follows real yields, the dollar and fear.
- 1 lot = 100 oz, so $1 of movement = $100 per lot.
- Size by dollar distance; respect US data times.