Understanding XAU/USD Volatility
Gold is one of the most volatile instruments in retail trading. Average daily ranges vary from 60 pips on a quiet Asian session to over 300 pips during major news events.
The Average True Range (ATR) tells you, on average, how many pips gold has moved each day.
Using ATR for Stop Loss Placement
Placing your stop at 1.0-1.5× the daily ATR gives your trade room to breathe through normal price movement.
- Low volatility (ATR under 80 pips), tighter stops are viable
- Normal volatility (ATR 80-150 pips), standard 20-50 pip stops work well
- High volatility (ATR over 150 pips), wider stops essential