ForumSections

Gold TickValue

New comment

Hi everyone,

I’m currently trading with a broker whose platform seems to have an issue with the tick value for gold.

On the platform’s specifications:

  • Gold tick value = 0.01
  • Account balance = $5,000
  • Stop loss (points) = 1,500 (150 pips)
  • Risk = 1%

Based on these numbers, the lot size should be:

Lotsize  =  ( 1%*5000) / (1500*0.01)

Lotsize  = 3.3 lots. 

lotcal


However, in practice, 3.3 lots only gives $3.3 per tick for gold on the platform.
I tested with 0.01 lot and confirmed the same observation.

tick2


It seems the platform actually uses:

Gold tickvalue =1

Which would make the lot size:

Lotsize  =  ( 1%*5000) / (1500*1)

Lotsize  = 0.03 lots. 

Could this discrepancy be caused by MT5 itself, or is it an issue with the broker?
Daniel Opoku:
I’m currently trading with a broker whose platform seems to have an issue with the tick value for gold.

XAUUSD is actually a CFD not connected any centralized exchange unlike spot Gold or Gold futures. With CFD's, your broker-dealer maintains its own private liquidity pool instead of connecting to exchange pricing.

As a result, your broker-dealer can create whatever tick value it likes. It's your broker-dealer.

Ryan L Johnson #:

XAUUSD is actually a CFD not connected any centralized exchange unlike spot Gold or Gold futures. With CFD's, your broker-dealer maintains its own private liquidity pool instead of connecting to exchange pricing.

As a result, your broker-dealer can create whatever tick value it likes. It's your broker-dealer.

thanks for the education. I will contact the broker

New comment