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Everything you need before your first XAUUSD trade, explained without jargon — what gold actually is as an instrument, how the units work, how to size a position, and what usually goes wrong.
Gold is one of the most traded instruments in the world and one of the least forgiving for a new trader. It moves quickly, it reacts sharply to US dollar strength, interest-rate expectations and geopolitical risk, and a normal day can travel several hundred pips. None of that is a problem — it becomes a problem when a beginner treats a gold position like a currency position.
This page is the entry point to our gold education library. Work through it in order, then move on to the deeper strategy articles.
Step by step
Eight steps, in the order they actually matter. Skipping straight to step five is the most common reason beginner accounts do not survive.
You are not buying physical gold. You are trading a contract that tracks the dollar price of one troy ounce. You can go long (profit if price rises) or short (profit if price falls), and you close the position to realise the result.
A pip on gold is normally a 0.01 move. A standard lot is 100 ounces ($1 per pip), a mini lot is 10 ounces ($0.10), a micro lot is 1 ounce ($0.01). The spread is the gap between buy and sell price — your entry cost, typically 15–35 pips on gold.
Leverage lets you control a large position with a small margin. It does not increase your edge — it increases the speed at which you win or lose. Beginners lose accounts through position size, not through direction being wrong.
Check the regulator (FCA, ASIC, CySEC, FSCA and similar), the gold spread, overnight swap charges, and whether withdrawals are processed reliably. Never choose a broker only because someone was paid to recommend it.
Start with the daily chart for direction, the 1-hour for structure, and the 5- or 15-minute for entries. Mark obvious highs and lows where price previously reversed. Those levels are where risk is defined, not where you predict the future.
Decide the percentage of your account you will lose if wrong (1% is a common ceiling), place the stop where your idea is invalid, and only then calculate the lot size that fits. Never size first and place the stop afterwards.
One R is the amount you risked on a trade. A trade that made twice your risk is +2R; a loss is -1R. Thinking in R removes account size from the conversation and makes your record comparable over time.
Take the smallest size your broker allows for at least 30 trades. Log entry, stop, target, reason and outcome. Only increase size once the journal — not your memory — shows a repeatable process.
Worked example
Say your account is $1,000 and you risk 1%, so $10 on this trade. Gold is at 2,400.00 and the nearest structural low — the level that makes your long idea wrong — is 2,396.00. That is a 400-pip stop.
At $0.01 per pip (one micro lot), a 400-pip loss costs $4. Two micro lots cost $8. Three cost $12, which exceeds your $10 limit — so the correct size here is two micro lots, not "whatever the platform defaults to". If price reaches 2,408.00, you made 800 pips on two micro lots, roughly $16, or +2R.
That arithmetic is the entire job. Everything else — the chart pattern, the news, the session — is just how you choose the level. Check yours with the position size calculator before every trade until it becomes automatic.
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Gold and XAUUSD setups with defined entries, stops and targets, plus the daily Gold outlook and a performance log that includes losing trades.
