Lesson 5
How to Size a Position in Gold (XAU/USD)
Last updated: 2026-09-28
Quick answer
Decide how much money you are willing to lose on the trade (usually 1% of your account), then divide it by the stop distance in dollars times 100. At most brokers, one standard lot of gold is 100 ounces, so every $1 move in the gold price is worth $100 per lot.
The formula
Lot size = Money at risk ÷ (Stop distance in $ × 100)
- •Money at risk: your account × your risk % (for example 1%).
- •Stop distance: the difference between your entry price and your stop loss, in dollars.
Examples (standard lot = 100 oz)
| Account | Risk 1% | Stop distance | Lot size | Loss if stopped |
|---|---|---|---|---|
| $1,000 | $10 | $5 | 0.02 lots | $10 |
| $5,000 | $50 | $15 | 0.03 lots (rounded down) | $45 |
| $10,000 | $100 | $10 | 0.10 lots | $100 |
Always round down, never up.
Check with your broker
- •Most brokers use 100 oz per standard lot, but some differ. Check the “contract size” in your trading platform.
- •Brokers also define a gold “pip” differently ($0.01 or $0.10). Using the dollar distance avoids that confusion.
How TebotechSignals signals help
Every engine signal shows the entry and stop loss, so you can calculate the stop distance in seconds. Results are reported in R (1R = the amount you risked), so your own results match ours whatever your account size.
Common mistakes
- •Risking more after a few wins. Keep the same % per trade.
- •Moving the stop further away to “give the trade room” without reducing the lot size.
- •Trading gold with the same lot size as EUR/USD. Gold moves much more in dollar terms.
Educational content only, not financial advice. Trading forex and gold carries a high risk of loss.