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Routes through the courseSix lessons on XAU/USD: contract size, how a pip is counted, and why risk per trade has to be worked out differently.

Trade gold

Lessons on this route

6 lessons

  1. 1 · Lesson 2.8

    Gold (XAU/USD): how it differs from currencies

    Different contract size, different pip, wider ranges. The arithmetic of risk per trade changes with all three.

  2. 2 · Lesson 1.3

    What a pip is worth in money

    A pip is the smallest standard price step. What it is worth depends on lot size and the pair, so the same twenty-pip move pays differently on different trades.

  3. 3 · Lesson 1.7

    Leverage and margin: how much of the trade is yours

    Leverage sets how large a position your deposit can hold. Margin is the part of your money locked against it while the trade is open.

  4. 4 · Lesson 1.9

    Stop loss and take profit

    Two instructions you attach to a position: one closes it at a loss you chose in advance, the other at a profit you chose in advance.

  5. 5 · Lesson 3.2

    Working out position size

    Risk in money, divided by the stop distance in pips, divided by pip value. Three numbers you already have, in that order.

  6. 6 · Lesson 2.14

    Sessions, news and the calendar

    Which hours a pair actually moves in, and which scheduled releases widen spreads enough to matter to a stop.

Reasons XAU/USD sits apart from currency pairs

A reader once asked why a stop loss that worked on USD/INR kept getting hit on XAU/USD. The answer was not in the stop itself. Gold moves in larger rupee amounts for the same percentage change, and the contract is sized in ounces, not in a currency pair’s usual lots. A plan built for currencies does not carry over without adjustment.

This route exists for that reader. It is for someone who has seen a chart but has not yet traded gold, or who has traded it and found the risk harder to control than expected. The six lessons are ordered so that each one gives a number the next one needs. Skipping ahead leaves a gap that shows up as a position size that feels arbitrary.

The route is not a signal service and it does not recommend a broker. It teaches the arithmetic and the habits that sit behind a gold trade. Nothing here promises a result. The aim is that after six lessons a reader can look at a gold chart and state, in rupees, what a move would cost or pay before any order is placed.

The order of work and what it protects

The first lesson establishes what XAU/USD is: gold priced in US dollars per troy ounce, quoted to two decimal places in most platforms. That matters because a pip is not the same size as in a currency pair. The second lesson turns that pip into rupees, using the USD/INR rate beside the gold price. Without that conversion, every later number is in the wrong currency.

Leverage and margin come third because they decide how much of the trade is the reader’s own money. That figure changes the stop distance that is affordable. Stop loss and take profit come fourth, once the reader knows what a move costs. Position size comes fifth, because it is the output of the first four lessons, not a guess made at the start.

Sessions, news and the calendar come last. They are not an afterthought. Gold reacts to events that currencies often absorb more quietly, and the same position size can behave differently in a thin session. Putting this lesson last means the reader already has a risk figure to compare against the calendar, rather than a vague sense that news is dangerous.

What to have ready and what finishing gives

Before starting, a reader needs a demo account that quotes XAU/USD and shows the contract size in the platform’s specification. The specification varies between brokers, so the number must be read from the platform in use, not assumed. A calculator and a note of the current USD/INR rate are enough for the arithmetic. No deposit is required for the lessons.

Finishing the route gives a repeatable sum: pip value in rupees, margin required, stop distance in rupees, and position size that keeps the loss at a chosen fraction of the account. That fraction is a decision the reader makes and can change. The route does not set it. What the route does is make the consequence of that decision visible before the order is sent.

It also gives a way to review a trade after it closes. If the loss was larger than planned, the cause is usually one of the four numbers being taken from memory rather than recalculated. The lessons are short, but they are meant to be worked through with the platform open, not read once and set aside.

Doing it once, step by step

Work through the six lessons in the order given, with a demo platform open and a calculator to hand. Each step produces one number that the next step uses.

  1. 01

    Open the XAU/USD specification

    Find the contract size, the minimum lot, and the tick size in the platform’s instrument details. Write them down. These figures vary between brokers, so do not carry over numbers from a currency pair or from another platform. Everything later in the route depends on these three figures being correct for the account in use.

  2. 02

    Convert one pip to rupees

    Take the pip size from the specification and multiply by the contract size to get the value in US dollars. Then multiply by the current USD/INR rate to express it in rupees. Check the result against the platform’s own profit calculator if one is available. If the two differ, the specification has been misread.

  3. 03

    Set the margin and the stop distance

    Note the margin required for the smallest position the platform allows. Then choose a stop distance in pips and convert it to rupees using the pip value already calculated. This is the amount at risk if the stop is hit. It must be a figure the reader can state without opening the platform again.

  4. 04

    Choose the risk fraction and size the position

    Decide what fraction of the account a single loss may take. Divide that rupee amount by the stop distance in rupees to get the position size. Round down to the nearest lot the platform permits, never up. If the result is below the minimum lot, the stop is too wide for the account at that risk fraction.

  5. 05

    Check the calendar before the session

    Look at the economic calendar for the currency areas involved: the United States for the dollar side, and India for the rupee side. Mark any release that could move gold sharply. If one falls inside the intended holding period, either reduce the position size or wait. The calendar does not predict direction; it only flags when the usual stop distance may not be enough.

  6. 06

    Record the four numbers after the trade

    Write down the pip value, margin, stop distance and position size actually used, and the result. Compare the loss or gain with the planned figure. A difference points to one of the four numbers being taken from memory. Repeat the route with the corrected figure before increasing any risk fraction.

Questions that come up next

Do I need a different account to trade gold than the one I use for currency pairs?

Not usually. Most platforms that quote currency pairs also quote XAU/USD on the same account. What changes is the contract specification, not the account type. You should open the instrument's specification page in your platform and read the contract size, the tick size and the margin requirement before you place anything. Those figures vary between brokers, so a number copied from a video or a forum may not match your own platform.

Why does the pip value for gold have to be converted through USD/INR at all?

Your account is in rupees, but gold is priced in US dollars per troy ounce. A move of one dollar in the gold price is a move in dollars, not in rupees. To know what it costs you, you multiply the dollar move by the USD/INR rate. If USD/INR is around 83.2500, a one dollar move is roughly ₹83.25 per ounce before contract size is applied. Skip that step and every later figure is in the wrong currency.

Is a stop loss on gold supposed to be wider than on a currency pair?

Not automatically wider, but the distance has to be worked out again rather than copied. Gold's daily range in rupee terms is often larger than that of a major currency pair for the same percentage move. A stop distance that suits USD/INR may sit inside gold's normal noise. The stop should come from where the chart says the idea is wrong, and the position size should then be adjusted to fit that stop.

What should I do if the calendar shows a major release during my trading session?

The usual approach is to decide before the release, not during it. You can reduce the position size, widen nothing and simply stand aside, or close the trade before the event. Spreads often widen and fills can be worse than the price on screen, which changes the real cost of the stop. The calendar is a planning tool, not a prediction tool.

Does this route tell me when to buy or sell gold?

No. It teaches the arithmetic behind a gold trade: what a pip is worth in rupees, how margin changes the money at risk, and how to size a position from a stop distance. It does not give signals, and it does not recommend a broker or a platform. The decisions about direction remain yours.

How long does it take to work through the six lessons?

That depends on how much time you give to the practice between them. The lessons are short, but each one asks you to apply a number to your own platform's specification. Doing that properly takes longer than reading. Working through them over a week or two, with a demo account open beside you, is more useful than reading all six in one sitting.

The words used on this page

Troy ounce
The unit gold is priced in. It is not the same as the ounce used for groceries. One troy ounce is about 31.1 grams, and the quoted XAU/USD price is per troy ounce.
Contract size
How much gold one lot represents on your platform. It is stated in the instrument's specification and it varies between brokers. Every rupee figure you calculate depends on it.
Margin
The part of the trade's value your broker sets aside from your account while the position is open. It is not a fee and it is not your maximum loss. It is the deposit that keeps the position running.
Position size
The number of lots you trade, chosen from your stop distance and the money you are willing to risk. It is the last figure you calculate, not the first.
Spread
The gap between the price you can buy at and the price you can sell at. It is a cost on every trade, and it often widens around news releases and in thin sessions.
Session
A block of hours when a market is most active, such as the London or New York session. Gold behaves differently in each, and the same position size can carry different risk in a quiet one.

What to take away

  • The route is for a reader who has seen a chart but has not yet controlled risk on gold, and it runs in the order that each lesson produces a number the next one needs.
  • Before starting, have a demo account that quotes XAU/USD and shows its contract size, and read that specification yourself because it varies between brokers.
  • Finishing it means you can state, in rupees, what a gold move would cost or pay before any order is placed, and size the trade from the stop rather than the other way round.
  • The common mistake is skipping to position size, which leaves the figure arbitrary because the pip value and margin were never worked out.
Six lessons on XAU/USD: contract size, how a pip is counted, and why risk per trade has to be worked out differently.Meerayour course guide