Learning how to read Pips on gold can help you make the right trading strategy and give you a better way of analyzing your trading results. Gold is one of the most common metals and is more likely to reward you for your training efforts. They were learning how to read pips on gold can help you get the maximum returns for your trades and give you everything you need to calculate profits, losses and lot sizes needed!
You can read pips on Gold by looking at the value per ounce. For instance, you could buy XAUUSD at $1900.00. If you sold this back to the market at $1950.00, you would have made a profit of 5000 micro pips. This equates to 500 standard pips, as you would see in the forex market.
Reading Pips On Gold On MetaTrader 4
Pips on gold on the MetaTrader platform break down into lot sizes to pips. One micro-lot is equal to 100 Pips which is about $1. If you buy one mini lot, it is about $10 or 100 Pips. If you buy one average size lot, it can be $100 or 100 Pips. What Pips present depends on whether it’s for a 5-digit broker or a 4-digit broker.
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Most traders don’t calculate the number of Pips, and instead, they ask how many cents or dollars gold is going up or down. MetaTrader calculates gold Pips based on the dollar amounts and the lots available. The best way to count pips on gold on MetaTrader is to remember that $1 is one micro lot or 100 Pips, and you can then do calculations from there.
On this Tradingview chart, we can see a chart showing spot XAUUSD (Gold) on the 30 minute time frame. Our stop loss shows a value of 687 pips. If we were trading another currency pair like EURUSD, this would instead show a value of 68.7 pips. The take profit shows a value of 2133 pips on Gold. This would actually equate to 213 pips on EURUSD.
This is why you need to be extremely careful when taking trades on XAUUSD. As a general rule of thumb, if you’re usually trading 0.1 lots on EURUSD, you’ll want to be using 0.01 lots on Gold. The pip value is roughly 10 times more.
How To Calculate Forex Lot Sizes On Gold
One lot size for gold has 100,000 units, and one pip of movement is worth $1. For example, if the gold’s price goes from 1800 to 1800.01, that is one movement for one lot worth $1. If the price goes from 1800 to 1801, then that’s a 100 Pips move for one lot worth $100.
You can calculate the lot size on gold by considering one lot as $0.1 for one pip move. For example, if you buy one lot, the price goes from 1800.99 to 1801.99 or 100 Pips gained. This will mean you have a profit of $100.
As I mentioned above, I’d recommend using 10% of your usual lot size, when trading gold. For instance, if you typically use 0.2 lots per trade on GBPUSD, I’d recommend starting at 0.02 on Gold, if not lower!
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The Benefits Of Trading Gold Instead Of Forex
One of the main benefits of trading gold instead of Forex is it is easier to read the fundamentals on gold than currency pairs. Before getting involved in gold trading, you must be aware of all of the friends and other benefits that you can get from trading in gold.
The following are some of the benefits that you can expect for Roman trading in gold though they are not all of the benefits, and which one’s apply to your specific experience will depend on which Traders you’re working with.
Security and Reliability
A lot of traders consider gold trading to be safe and reliable. This is because the value of gold tends to say unaffected by inside economic situations. This means that the government’s Financial controls or Central Bank regulations don’t affect gold in the same way since it is mainly a value store. So, inflation rarely affects the pricing of gold, rendering many currencies worthless.
Gold is also a lot cheaper than currency trade, which means that it’s easier for the average person to start trading because there’s less price upfront. As a result, gold has the highest trading volume compared to other currency pairs, and gold also tends to have a slight difference between buying and selling prices.
Gold tends to have a price that goes higher each time, making it possible for the gold trading industry to help traders who wish to earn substantial amounts. Trading gold online allows traders to make extra money faster than entering the supply marketplace.
Note that the value of gold rises and drops very quickly and tends to be in large amounts. You should also keep in mind that gold is chiefly traded against the US dollar, implying that the dollar’s value will indirectly influence gold’s price. If the US dollar value rises, then the cost of gold will fall.
However, there is still be potential to make a lot of money because of these rapid fluctuations. Since gold allows you to keep up-to-date with quotes constantly throughout the day, you should be able to have a good idea of what those fluctuations are going to be like.
Easier Mechanism
The pricing mechanism for gold is more accessible than the mechanism for foreign exchange markets, and only a few factors can affect the gold market and its parameters. Because of this limitation, it’s easier to comprehend and predict Trends in the gold market than in the Forex Market. So this allows for the execution of Trades depending on predetermined parameters, which is extremely useful for saving time.
Gold is also actively trading 24 hours a day, giving it an edge on Foreign Exchange. Some Forex trading that closes when New York closes reduces the trade volume and price movements that a Trader can take advantage of. Gold also has a high liquidity because it is exchanging all the time.
Less Storage
By far, one of the most significant benefits of doing online trading and gold is that you don’t need to move or store or anything physically. It allows you to get experience with exposure to the actual prices of gold without requiring that you have to store physical coins or bars or move any equity around.
Access to Constant Quotes
Trading gold online tends to grab the attention of beginners and experts because it enables you to receive constant quotes and because regular quotes are possible by the continuous evaluation of live data. With the help of the internet and the recent modernizations in trading, you are now able to trade in gold even if you are an everyday trader.
In Conclusion – How Do You Read Pips On Gold?
Learning how to read pips on gold is a fundamental skill that you should have when getting into gold trading. It will allow you to understand better why a lot size matters and how movements can affect your overall profit. There are many other benefits of trading in gold, such as security and easy accessibility, and there’s also a large margin of profit.
You can read pips on gold (XAUUSD) very simply by looking at the number of digits that follow the decimal point. The fourth digit is the pip and this is what you should be watching to make your trades. Remember that gold moves very quickly and so it’s important to always have up-to-date quotes in order to make sound decisions. Stay safe and trade smart!
Do you trade gold? Let me know in the comments down below!