How Gold Behaves
Module 9 — Gold Volatility
Gold routinely moves a far larger dollar range in a day than a major currency pair. That volatility is why traders are attracted to it, and why so many accounts are damaged by it.
- Stops must be placed at structurally correct distances, which are often wide
- Wide stops require smaller positions, never larger ones
- The same lot size you use on EURUSD can represent several times the risk on gold
- Spreads on gold are wider and widen further around news
Key concepts
- Gold can move quickly
- Wider stops require smaller size
- Spread can widen around news
Practical example
If a structural stop doubles in distance, position size must fall to keep money risk constant.
Common mistake
Using the same lot size on gold as on a major Forex pair.
Knowledge check
Check your understanding
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