Instruments and markets
XAU/USD
The symbol for spot gold priced in US dollars - XAU is the code for one troy ounce. It is the most traded metal instrument and one of the most volatile instruments on a retail platform.
Also called: Gold · Spot gold
GFN’s figure
Metals including gold may be traded on GFN accounts where available. Leverage varies by instrument, and the same daily loss limit applies - $5,000 on a $100,000 1 Step account, which gold can cover in a single fast move at the wrong size.
In detail
XAU/USD,explained
Gold's daily range in dollar terms dwarfs a major currency pair's, so position sizing carried over from forex is the most common way traders breach a limit on it.
It responds to real interest rates and to risk sentiment rather than to one country's data, which is why it can move sharply on news that has nothing to do with gold.
Related
Terms thatcome with it
Most rules only make sense next to the ones they interact with. These are the entries this one depends on.
Silver
Spot silver, quoted as XAG/USD in US dollars per troy ounce. It tends to move with gold but with a larger percentage range and materially thinner liquidity, which makes position sizing carried over from gold too large.
Commodities
Raw materials traded as instruments - energy, metals and agricultural products. Prices are driven by physical supply and demand rather than by interest rates, which makes them move on a different calendar from financial instruments.
Tick value
What one minimum price increment is worth per contract. It is the futures and index equivalent of pip value, and it converts a stop distance directly into a dollar figure.
Position size
How many lots a trade is placed in. It is calculated from the dollar amount being risked and the stop distance, not chosen first - which is the reverse of how most traders approach it.
Leverage
The ratio between the notional size of a position and the margin required to hold it. At 1:50, $2,000 of margin supports a $100,000 position - it changes what you can open, not what you may lose.
Also governed by /rules/instruments
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