The size of your position should come from your stop loss and how much you're willing to lose — never from how confident you feel. Here's the math, using the most common gold convention.
The convention we use
- 1 pip on gold = a $0.10 price move (e.g. 2400.00 → 2400.10).
- 1 standard lot = 100 ounces, so 1 pip = $10 per standard lot.
- 0.01 lot (a micro lot) = $0.10 per pip.
Some brokers define a gold pip differently. Check your broker's contract details once, then stick to one convention.
The formula
Lot size = risk in dollars ÷ (stop distance in pips × $10).
Worked examples
- $500 account, 1% risk = $5. Stop 40 pips. 5 ÷ (40 × 10) = 0.0125 → round down to 0.01 lot.
- $1,000 account, 1% risk = $10. Stop 50 pips. 10 ÷ (50 × 10) = 0.02 lot.
- $5,000 account, 0.5% risk = $25. Stop 25 pips. 25 ÷ (25 × 10) = 0.10 lot.
Always round down, never up. And remember the spread: on gold it can widen a lot around news and the daily rollover, which effectively moves your stop closer.
- 1Decide your stop first, based on the chart.
- 2Measure the distance in pips.
- 3Pick your risk (0.5–1% is common).
- 4Calculate the lot size and round down.