Key points
- In this guide, 1 pip on gold = 0.10 in price. A move from 4150.00 to 4152.00 is 20 pips.
- With the common contract of 100 ounces per lot, 1 pip is worth 10 USD per 1.00 lot, 1 USD per 0.10 lot and 0.10 USD per 0.01 lot.
- Lot size = risk in money ÷ (stop loss in pips × pip value per lot).
- Always check your broker's contract size, and remember that the real loss can be bigger than planned.
What is a pip on gold?
Gold against the US dollar (XAUUSD) is usually quoted with two decimals, for example 4150.25. The smallest step, 0.01, is called a point in MetaTrader 5. Some brokers show three decimals (4150.255): there a point is 0.001, so 1 pip (0.10) is 100 points instead of 10. The number of digits is shown in the symbol's Specification.
The word "pip" is less clear on gold. Some traders call 0.01 a pip, many call 0.10 a pip, and others count whole dollars. That is why two traders can both say "I made 50 pips" and mean very different things. In this guide, and in Gold Position Manager, 1 pip = 0.10 in price.
| Price move | Points (0.01) | Pips (0.10) |
|---|---|---|
| 0.10 | 10 | 1 |
| 1.00 | 100 | 10 |
| 2.00 | 200 | 20 |
| 10.00 | 1,000 | 100 |
| 20.00 | 2,000 | 200 |
How much is one pip worth?
At most brokers, 1.00 lot of gold = 100 troy ounces. If the price moves by 0.10 (one pip), 100 ounces change in value by 100 × 0.10 = 10 USD. Smaller lots scale down in the same way:
| Lot | 1 pip | 20 pips | 100 pips |
|---|---|---|---|
| 0.01 | 0.10 USD | 2.00 USD | 10.00 USD |
| 0.05 | 0.50 USD | 10.00 USD | 50.00 USD |
| 0.10 | 1.00 USD | 20.00 USD | 100.00 USD |
| 0.50 | 5.00 USD | 100.00 USD | 500.00 USD |
| 1.00 | 10.00 USD | 200.00 USD | 1,000.00 USD |
In MetaTrader 5, right-click XAUUSD in Market Watch → Specification, and look for "Contract size". Some brokers and account types (for example cent accounts) use other sizes, and then every number in the table changes in proportion.
How to work out your lot size from your risk
Professional traders usually start with the question "how much am I willing to lose if my stop loss is hit?" and let the lot size follow. The formula:
Lot size = risk in USD ÷ (stop loss in pips × 10 USD)
Three examples:
- Account 10,000 USD, risk 1% = 100 USD, stop loss 100 pips: 100 ÷ (100 × 10) = 0.10 lot.
- Account 2,000 USD, risk 1% = 20 USD, stop loss 50 pips: 20 ÷ (50 × 10) = 0.04 lot.
- Risk 50 USD, swing trade with a 250-pip stop loss: 50 ÷ (250 × 10) = 0.02 lot.
If the result is not a valid lot, round down to your broker's lot step (often 0.01). Rounding up quietly increases your risk.
Why the real loss can be bigger than planned
- Spread: you open at the ask and close at the bid. On gold the spread widens at news and at the market open.
- Slippage: in a fast market your stop loss is filled at the next available price, which can be worse.
- Gaps: after a weekend or big news the price can open beyond your stop loss.
- Costs: commission and swap (the overnight fee) come on top.
Your risk per trade is a plan, not a guarantee. That is one reason many traders keep it small, for example 0.5% to 1% of the account.
Common mistakes
- Mixing up points and pips: a ten-times error in your risk.
- Forgetting that several open trades add up to one bigger risk.
- Using the balance while other trades are open and losing (equity is lower).
- Moving the stop loss further away after the entry, which changes the risk you planned.
- Increasing the lot after a loss to "win it back".
How Gold Position Manager does this for you
The NEW TRADE block on the panel turns your risk into a lot size automatically. Enter your risk in % or in money; the BUY and SELL buttons show the lot that fits the stop loss your trade will really get. Before you click, you see the loss at the stop, the value per pip and the margin needed. You can also block panel trades above a maximum risk and lock the buttons after a daily loss limit. It reads your broker's own contract values, so the numbers match your account.
This guide is education, not financial advice. Trading gold carries a high risk of losing money, and the figures above ignore spread, commission, swap and slippage.