What Is Lot Size in Gold Trading?
In XAU/USD trading, a lot size determines how many troy ounces of gold you are controlling with each trade. A standard lot represents 100 troy ounces, a mini lot represents 10 ounces and a micro lot represents 1 ounce.
| Lot Type | Size (oz) | Pip Value (USD) |
|---|---|---|
| Standard | 100 oz | $10.00 per pip |
| Mini | 10 oz | $1.00 per pip |
| Micro | 1 oz | $0.10 per pip |
The Formula Explained
Lot Size = (Balance × Risk%) ÷ (Stop Loss × $1)
For example, with a $10,000 account risking 1% with a 20 pip stop loss:
- Risk amount = $10,000 × 1% = $100
- Lot size = $100 ÷ (20 × $1) = 5.0 standard lots (or 0.05 lots)
Why Risk Management Defines Your Results
At Gold Trade Signals we recommend 0.5%-1% risk per trade as a starting point. At 1% risk, you can lose 20 consecutive trades and still have 82% of your account.