XAUUSD Position Size Calculator: What's Your Correct Lot Size?

How to Use the XAUUSD Position Size Calculator

This tool eliminates the tricky math of gold trading. For disciplined risk management, always use the default "Risk-Based Sizing" mode. Here’s the simple process:

1. Enter Your Account Details: Input your "Account Balance", your "Account Currency", and the "Leverage" your broker offers.
2. Define Your Risk: This is the most crucial step. Choose to risk a "Percentage (%)" of your account or a specific "Fixed Amount" of money.
3. Set Trade & Contract Details: This is key for gold. Check your broker for the "Contract Size (Ounces per Lot)" and enter it here. Then, input your planned "Entry Price" and "Stop-Loss".
4. Get Your Lot Size: The calculator instantly shows you the precise number of "Lots" to trade to ensure your risk perfectly matches your plan.

Why Position Sizing for Gold is a Must

Gold can make powerful, sustained moves that are fantastic when you're on the right side of them. But getting caught on the wrong side of a major move with an oversized position is the fastest way to blow up an account. The difference between a professional and an amateur is that the professional *always* knows their exact risk before entering a trade.

Think of it as building a house. Your trading idea is the design, but your position size is the foundation. A weak, improperly calculated foundation can't support the structure, and it will collapse under pressure. Understanding the specifications of what you're trading, like the contract size for gold, is a fundamental part of building that strong foundation. Major exchanges like the CME Group provide detailed contract specs for this reason. Our calculator automates building that solid foundation for you.

The XAUUSD Position Sizing Formula: How It Works

We're all about transparency. Here is the exact formula this calculator uses in "Risk-Based Mode" to calculate your lot size:

Position Size (Lots) = Risk Amount / ((Stop-Loss in Ticks × Tick Value per Lot) + Commission per Lot)

Let's break that down:

• Risk Amount: The maximum cash value you are willing to lose on this trade.
• Stop-Loss in Ticks: The distance between your entry and stop-loss price. For XAUUSD, one tick is a $0.01 price change.
• Tick Value per Lot: This is the most critical part for gold. It's calculated as $0.01 × Contract Size (Ounces). For a standard 100-ounce contract, each tick is worth $1.00.
• Commission per Lot: Your broker's fee for the trade, if any.

A Real-World Example: Sizing a Gold Trade

Let's walk through a trade with a trader named David. His account is in Pounds Sterling (£) with a balance of £15,000. He has a firm 1% risk rule.

David wants to short Gold from an entry price of $2,350.00. He places his stop-loss at $2,362.50. His broker uses a standard 100-ounce contract and charges a £4 commission per lot.

1. Step 1: Calculate Total Risk in Account Currency

   This is the maximum loss David will accept.
   £15,000 (Account Balance) × 0.01 (1% Risk) = £150.00

2. Step 2: Calculate Stop-Loss Distance in Ticks

   A tick is $0.01, so a $12.50 stop distance is 1250 ticks.
   $2,362.50 (Stop) - $2,350.00 (Entry) = $12.50, which is 1250 Ticks

3. Step 3: Calculate Total Risk Per Lot in Account Currency

   First, find the tick value in USD: $0.01 × 100 Ounces = $1.00 USD. If the USD/GBP exchange rate is 0.80, the tick value is £0.80.
   (1250 Ticks × £0.80 Tick Value) + £4.00 Commission = £1,000 + £4 = £1,004 per lot

4. Step 4: Find the Correct Position Size

   Now, divide the total allowed risk by the risk per lot.
   £150 (Total Risk) / £1,004 (Risk per Lot) = 0.15 Lots

The Result: The calculator would advise David to trade 0.15 lots. This precise sizing ensures that if his stop-loss is triggered, he only loses his planned £150, allowing him to trade another day.

Frequently Asked Questions (FAQ)

What is the "Contract Size" and why is it crucial for XAUUSD?

The Contract Size is the number of units (in this case, troy ounces) that one standard lot represents. For most brokers, this is 100 ounces, but it can vary. This number is the most important variable in the calculation because it directly determines the value of each tick ($0.01 price move). A 100-ounce contract means each tick is worth $1, while a mini 10-ounce contract would make each tick worth only $0.10. Always confirm this with your broker.

What is a "tick" in Gold trading?

A "tick" is simply the smallest possible price fluctuation. For XAU/USD, this is the second decimal place, or $0.01. For example, a price move from $2350.50 to $2350.51 is one tick.

Does my leverage change the position size I should use for Gold?

No. This is a critical distinction. Your ideal position size should always be based on your risk tolerance. Leverage only affects the margin—the deposit required to open the trade. This professional-grade calculator performs a vital two-step check: it first calculates the correct size based on your risk rules, and then it uses your leverage to confirm you have enough margin to actually open the trade.