Opening your first position

When you buy XAUUSD on a CFD account you are not buying gold. You are opening a contract with the broker that pays you the difference between the price when you open and the price when you close. That is the whole product, and it is why the position can be closed at any second the market is open, in any size, in either direction.

The practical consequence is that a sell is exactly as normal as a buy. There is nothing to borrow and nothing to deliver. If gold falls 10 dollars and you were short one ounce, ten dollars is credited to your account. If it rises, ten dollars leaves it.

The second consequence is that the broker is your counterparty for the price you see. Two brokers quoting the same instrument will not quote the identical number, and the difference between them is real money to you. That is why the conditions page matters more than the marketing page.

Size is quoted in lots, and a lot means a different number of units on every instrument. One standard lot of a forex pair is 100,000 units of the base currency. One standard lot of gold is 100 ounces. One lot of an index or a crypto CFD is whatever the contract specification says — check it, never assume.

From contract size you get the only number that matters day to day: value per point. On gold, one lot is 100 ounces, so a one-dollar move in the gold price is 100 dollars. Half a lot is 50 ounces, so the same move is 50 dollars. On EURUSD, one lot is 100,000 euro, so a one-pip move (0.0001) is 10 dollars.

Get in the habit of converting size into money before you place anything. “0.5 lots of gold” tells you nothing about risk. “Fifty dollars per dollar of gold movement, and my stop is thirty cents away, so I am risking fifteen dollars” tells you everything.

Leverage does not change your risk. It changes your margin — the deposit the broker holds while the position is open. At 1:100, a one-lot gold position with gold at 4,355 requires about 4,355 dollars of margin. At 1:500 the same position requires about 871. The position is identical. The profit and loss per point is identical. Only the amount locked up differs.

Where leverage bites is indirectly. Higher leverage lets you open a size you could not otherwise afford, and if you take that offer, your risk goes up because your size went up. The leverage number itself did nothing.

There is one genuine danger: with very high leverage, a position that would once have been rejected for insufficient margin now opens, and a modest adverse move can take your equity below the stop-out level. Treat leverage as a convenience for capital efficiency, and control risk with position size and stops instead.

Open the symbol in Market Watch, press F9 or click New Order. The dialogue asks for four things: symbol, volume, stop loss and take profit. Type of execution should read Market Execution for most accounts, which means you accept the price available when the order reaches the server rather than the price on your screen.

Volume is in lots. If the box will not accept 0.05, the instrument has a minimum step of 0.1 — that is a contract specification, not a bug. Deviation, where the account offers it, is the maximum slippage you will accept in points before the order is rejected instead of filled at a worse price.

After you click Buy or Sell, the position appears on the Trade tab with a ticket number, an open price, and a floating profit that starts negative by roughly the spread. That is normal: you bought at the ask and the platform values you at the bid.

Put the stop in the order dialogue, before the position exists. A stop added afterwards is a stop you might not add. Stops on MT5 are absolute prices, not distances, so on a gold buy at 4,355.20 with a thirty-cent risk you type 4,354.90.

Two broker limits govern where a stop may sit. Stops level is the minimum distance from the current price at which a stop or a pending order may be placed. Freeze level is the distance inside which an existing order may not be modified. If the platform rejects a stop with “Invalid stops”, one of those two is the reason and the fix is to widen the distance, not to remove the stop.

A take profit is optional. Plenty of profitable approaches use a trailing stop and no target at all, letting the trade end when the move ends rather than at a number chosen in advance.

Floating profit is what the position is worth if you closed it right now. It is not money you have. It is not in your balance, you cannot withdraw it, and it can be gone in a second. The number that is yours is the balance, which only changes when a position closes.

Closing is done from the Trade tab. Closing part of a position — typing a smaller volume in the close dialogue — realises that fraction of the profit and leaves the rest open with the same stop. On a hedging account a partial close is a genuinely separate deal, so your history will show two closes for one entry.

Judge yourself on closed trades. A month of screenshots of large floating profits tells you nothing about whether the approach works; a month of closed results tells you everything.