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 · 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 · 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 · 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 · 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 · 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 · 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.
Why gold needs its own route
The first chart on this route shows XAU/USD, not a currency pair. Gold is quoted in US dollars per troy ounce, so the price moves when the dollar moves, when real interest rates move, and when buyers treat gold as a store of value. EUR/USD at 1.0850 is a ratio between two currencies. Gold at a dollar price is a single number that many different forces push around. The two charts can look similar, but the numbers behind them are not.
The contract size is the first difference a reader meets. One standard lot of EUR/USD is 100,000 units of the base currency. One standard lot of gold is usually 100 troy ounces, though some brokers list 10 ounces or 1 ounce as their standard. That single figure decides what one pip of movement costs in pesos. If a broker's contract size differs from the one used here, every money figure on the route has to be recalculated with the broker's own number.
Volatility is the second difference. Gold can move several dollars in a session when a central bank speaks or when a geopolitical event lands. A dollar move on 100 ounces is a large peso amount. The same dollar move on a currency pair may be a fraction of a percent. This route is for a reader who has seen a chart before and wants to trade gold without treating it as a faster currency pair.
The order of the six lessons follows the order of the decisions. A reader cannot work out position size before knowing what a pip is worth in money, and cannot know that before knowing the contract size. Leverage and margin come before stop losses because margin decides whether the position can be held at all. Sessions and news come last because they change when the other five decisions should be made. Working through them out of order produces numbers that do not connect.
What to have ready before the first lesson
Before opening the first lesson, a reader needs a demo account with a broker that offers XAU/USD. The broker must be registered with the SEC Philippines if it accepts clients from this country. Registration can be checked on the SEC Philippines website. A demo account uses the same chart and the same order ticket as a live account, but the money is not real. That is the correct place to test every figure on this route.
A calculator and a notebook are enough for the arithmetic. The route gives contract sizes and example prices, but the reader's own broker may use different contract sizes, different margin requirements, and different pip values. The notebook should record the broker's own numbers beside the route's numbers. When the two disagree, the broker's numbers are the ones that apply to the account.
Funding a live account is not part of this route. If a reader later decides to fund one, GCash and bank transfer are common methods in the Philippines. The minimum deposit varies between brokers, and so do the fees. No figure for either is given here because no single figure is true for every broker. The route works on a demo account from the first lesson to the last.
A reader should also have a way to see the economic calendar. Most brokers publish one inside the trading platform. The calendar lists the times of central bank decisions and inflation releases. Gold reacts to United States data in particular, because the price is quoted in dollars. Knowing where the calendar sits in the platform saves time in the final lesson.
How the route is meant to be worked
Each lesson ends with a small calculation or a chart observation. The reader should finish that calculation before moving on. The route is short, but the lessons build on each other. A reader who skips the pip value lesson will not be able to check the position size lesson. A reader who skips the margin lesson will not understand why a stop loss can be hit by a margin call before the price reaches it.
The chart comes first in every lesson. The reader looks at the image, notes the price scale on the right and the time scale along the bottom, and only then reads the text. This order matters because gold charts often show large candles that look like errors. They are not errors. They are sessions where news moved the price. Seeing the candle before reading the explanation makes the explanation land on something real.
The route does not promise a result. It teaches a method for measuring risk. Whether a reader makes or loses money after the route depends on decisions the route cannot make. What the route can do is make the size of a loss visible before the trade is opened. That is the whole point of working through the six lessons in order.
A reader who finishes the route should be able to open a demo gold trade, state the pip value in pesos, state the margin required, place a stop loss and a take profit, and explain why the position size was chosen. If any of those five statements cannot be made, the relevant lesson should be repeated. Repetition on a demo account costs nothing.
Doing it once, step by step
The steps below are the order of work for the route. Do them once, in this sequence, on a demo account.
- 01
Open a demo account and find XAU/USD
Register with a broker that is listed with the SEC Philippines and open a demo account. Find XAU/USD in the instrument list and open its chart. Set the chart to a time frame you can read, such as one hour. Confirm the price is quoted in US dollars per troy ounce.
- 02
Record the contract size from the broker
Open the instrument specification page for XAU/USD. Write down the contract size, the minimum trade size, and the margin requirement. These three numbers override any example used in the lessons. Keep them in the notebook beside the route's own figures.
- 03
Calculate one pip in pesos
Using the broker's contract size and the current USD/PHP rate, work out what a one-dollar move in gold is worth in pesos. Check the calculation against the pip value lesson. If the two disagree, the broker's contract size is the reason, and the broker's figure is correct.
- 04
Set a stop loss and a take profit on a demo trade
Open a small demo position in XAU/USD. Place a stop loss and a take profit at distances you can explain. Note the margin the platform holds for the position. Close the trade and compare the result with your own calculation.
- 05
Work out position size from the risk amount
Decide a peso amount you are willing to lose on one trade. Divide it by the distance to the stop loss in pips, then by the pip value in pesos. The result is the position size. Repeat the calculation with a different stop distance and note how the size changes.
- 06
Check the calendar before the next demo trade
Open the economic calendar in the platform. Find the next release that concerns the United States dollar. Note the time and avoid opening a demo trade just before it. Repeat this check before every trade for one week.
Questions that come up next
Do I have to finish the lessons in the order they are listed?
The order is the point of the route. Each lesson produces a number that the next one uses. Contract size feeds the value of a pip, the pip value feeds position size, and margin decides whether the position can be opened at all. If you skip ahead, you will be calculating with a figure you never worked out. Start at the first lesson and finish each one before moving on.
My broker lists a different contract size for gold. What do I do?
Use your broker's figure everywhere. The route uses 100 troy ounces for one standard lot, which is common, but some brokers list 10 ounces or 1 ounce. The arithmetic does not change, only the number you put into it. Recalculate each money example on the route with your broker's contract size. If the answers look different from the page, your broker's figure is the one that matters.
How long does the route take to work through?
That depends on how much time you give each lesson. The arithmetic in the position size lesson is the slowest part for most readers. Some people finish the six lessons in a week of evenings. Others take longer because they redo the examples with their own broker's numbers. There is no schedule to keep and no deadline to meet.
Can I trade gold on a demo account for the whole route?
Yes, and that is what the route assumes. A demo account uses the same chart and the same order ticket as a live account. The money is not real, so a mistake costs nothing. Test every figure from the lessons there first. Move to a live account only when the numbers on the page match the numbers your own platform shows.
Does the route tell me when to buy or sell gold?
No. The route teaches how a gold trade is measured, priced and sized. It does not give signals or entry points. The sessions and news lesson explains when gold tends to move, not which direction it will go. Any figure on the page is an example for arithmetic, not a forecast.
What if my broker is not registered with the SEC Philippines?
Then it is not the right broker for this route. The SEC Philippines keeps a register of firms allowed to take clients from this country. Check the register before opening even a demo account. A broker outside that register leaves you with no local route for a complaint. Registration rules can change, so check the register itself rather than a list on another site.
The words used on this page
- troy ounce
- The unit gold is weighed and quoted in. It is not the same as the ounce used for flour or sugar. One standard lot of gold is usually 100 troy ounces.
- contract size
- How much of the thing you are trading sits inside one lot. For gold it is a number of troy ounces. This figure decides what one pip of movement costs in pesos.
- margin
- The part of a trade that is your own money, set aside by the broker while the position is open. It is not a fee and it is not a loss. It decides the largest position you can hold.
- stop loss
- An order that closes a trade at a price you chose in advance. It caps what the trade can cost you. It is placed before the trade goes wrong, not after.
- position size
- How many lots you open. It is worked out from your risk per trade and the distance to your stop loss. It is the last number you pick, not the first.
- session
- A block of hours when a market is most active, such as the London or New York session. Gold moves differently in each one. Sessions change when the other decisions should be made.
What to take away
- The route is six lessons in one fixed order, and each lesson uses the number the one before it produced.
- Gold is quoted in US dollars per troy ounce, so contract size comes first and everything else follows from it.
- Work every example with your own broker's contract size, because that figure varies between brokers.
- Do the whole route on a demo account before any real money is involved.