Gold is one of the world’s most traded assets, and XAUUSD is the most popular way for retail traders to access it. This guide explains exactly how to trade gold on MT4 and MT5, from setting up your charts to placing and managing orders. It supports the broader Gold Trading Guide: How to Trade XAUUSD Step by Step.
XAUUSD trading follows a clear process: choose a strategy, set up your MT4/MT5 workspace, measure volatility, define risk, select an order type, and manage the trade. This article provides a practical walkthrough so you can start trading gold with structure and discipline.
Key points
• MT4/MT5 provide fast execution, flexible charting, and a familiar workflow for trading gold.
• XAUUSD moves quickly, so risk controls and correct position sizing are essential.
• A clear trading plan (trend, breakout, or pullback) helps avoid emotional decisions.
• Understanding sessions and gold-sensitive news improves timing; see [LINK: Best Time to Trade Gold (XAUUSD)].
• Always review fundamentals using the sideways article - Fundamental Drivers and Economic News that Move Gold (XAUUSD).
What Is XAUUSD and Why Trade It on MT4/MT5?
XAUUSD represents gold priced in US dollars. It behaves differently from currency pairs because gold is a commodity with unique drivers such as inflation expectations, geopolitical stress, and changes in bond yields.
MT4 and MT5 are widely used because they offer:
• Simple order placement
• Custom indicators
• Fast execution
• Detailed charting tools suitable for gold’s volatility
If you are completely new to the asset, read the support article before continuing.
Step 1: Preparing Your MT4/MT5 Workspace for Gold Trading
To trade gold efficiently, your platform must be structured so you can read price, spot patterns, and make decisions quickly.
Chart Templates for Gold
Gold is highly responsive to trendlines, horizontal levels, and volatility bands. A typical beginner-friendly template includes:
• Japanese candlesticks
• One trend indicator (such as a moving average)
• One momentum indicator (e.g., RSI)
• ATR for volatility and stop placement
• Major support and resistance lines
Avoid overloading your chart. More indicators can lead to confusion and conflicting signals.
Timeframes to Display
A three-chart setup helps most traders:
• H4 for medium-term trend
• H1 for intraday structure
• M15 or M5 for entries
This helps you avoid the common mistake of trading only on one timeframe without context.
Adding Gold to the Market Watch
In MT4/MT5:
File - New Chart - Commodities - Metals - XAUUSD.
Step 2: Understanding When to Trade XAUUSD
Gold is active almost 24 hours, but not equally volatile.
To time your trades more effectively:
• The London and New York sessions generate strong movement.
• Spikes frequently occur during US economic releases.
• Asia session is slower, often forming consolidation patterns.
For deeper guidance on timing, see [LINK: Best Time to Trade Gold (XAUUSD): Sessions, Volatility and News].
A simple workflow: plan trades during London, execute or manage during London–New York overlap, stay cautious during major US releases such as CPI or NFP.
Step 3: Studying Gold’s Fundamental Triggers
Although this article focuses on platform mechanics, understanding gold’s underlying drivers helps you avoid unexpected volatility.
Gold typically reacts to:
• US inflation data
• Federal Reserve announcements
• Bond yields and USD strength
• Geopolitical uncertainty
• Risk sentiment shifts
For a complete list of news events and their typical impact on XAUUSD, see Fundamental Drivers and Economic News that Move Gold (XAUUSD).
Step 4: Measuring Volatility and Position Sizing for Gold
Gold can move 200–400 points (20–40 pips in forex terms) quickly.
Before placing any trade, assess volatility using ATR (Average True Range):
• ATR on H1 gives a sense of intraday volatility
• ATR on M15 helps estimate entry-level stop distances
Example:
If ATR(15) = 22 points, a typical stop might be 40–60 points to allow for normal fluctuations.
Position sizing example:
• Account: $1,000
• Risk per trade: 1% = $10
• Stop distance: 50 points
• Value per point (0.01 lot): around $0.10
Position size = $10 risk / ($0.10 × 50) = 2 micro lots (0.02).
For full volatility and position sizing guidance, see [LINK: Risk Management for Trading Gold: Position Sizing and Volatility Control].
Step 5: Choosing a Basic Gold Trading Strategy
Gold suits several styles: trend trading, breakouts, pullbacks, and news-related momentum.
Your job on MT4/MT5 is to define simple, repeatable rules.
A Simple Trend-Following Framework
Trend-following is one of the cleanest structures for gold.
- Identify trend direction on H4 and H1.
- Wait for pullbacks to a moving average or support/resistance.
- Look for confirmation on lower timeframe (M15 or M5) such as a higher low forming.
- Place trade with a stop below the structure.
- Target recent highs or a 1:2 risk-to-reward level.
Gold responds well to directional momentum, so using structure-based levels tends to be cleaner than relying solely on indicators.
For a full list of strategies, read [LINK: Gold Trading Strategies: Day Trading, Swing and Trend Following on XAUUSD].
Step 6: Placing Orders on MT4/MT5
Understanding order types helps you react quickly to gold’s speed of movement.
Market Orders
Executed immediately at current price.
Useful when:
• A breakout is confirmed
• You are entering during high momentum
• You want certainty of entry rather than exact price
Pending Orders
Types include Buy Limit, Sell Limit, Buy Stop and Sell Stop.
Buy Limit: enter lower after a pullback
Sell Limit: enter higher after a correction
Buy Stop: enter above resistance
Sell Stop: enter below support
Example:
Gold breaks above 2350 and you expect continuation if it clears 2360.
You place a Buy Stop at 2360 with a stop loss at 2340.
Stop Loss and Take Profit
Every gold trade should include a stop.
Place stops based on structure and volatility, not random distances.
• Structure-based: below swing low if buying
• Volatility-based: ATR × 2 or ×3 from entry
• Combined: structure low + ATR buffer
Take profit options:
• Recent swing high/low
• Fixed multiple of risk (1:2, 1:3)
• Partial profit taking with trailing stop
Step 7: Managing the Trade After Entry
Managing XAUUSD positions is as important as the entry.
Monitoring Price Behaviour
Watch how price behaves around key levels:
• If your setup relies on trend continuation, monitor pullbacks.
• If momentum slows after a breakout, consider tightening stops.
• Do not move stops away from your original level. This is a common mistake.
Using Trailing Stops
Trailing stops help lock in profits during strong gold trends.
Common approaches:
• Manual trailing behind swing lows
• ATR-based trailing
• Using break-even once price moves one risk unit in your favour
Scaling In or Out
Beginners should avoid scaling in because gold can reverse suddenly.
Scaling out partially (for example closing 50% at 1:1 R:R) can reduce pressure and protect capital.
Step 8: Analysing Common Gold Trading Setups
Here are examples of setups frequently used on MT4/MT5.
Pullback to a Key Moving Average
- Identify an uptrend on H4.
- Price pulls back to a moving average on H1.
- M15 shows a small higher low.
- Enter long with a stop below the pullback low.
- Target recent highs.
Breakout After Consolidation
- Gold forms a tight range during Asia session.
- In London, volatility increases.
- A breakout occurs above resistance.
- Enter using Buy Stop + confirmation candle.
- Stop goes below consolidation.
Retest of Previous High
- Price breaks above a key high with strong momentum.
- It retraces to retest the breakout level.
- Look for rejection wick or bullish candle pattern.
- Enter with a stop below the retest point.
These setups work best with clear trends and manageable volatility. Avoid trading during chaotic moves around major news.
Step 9: Avoiding the Most Common Gold Trading Mistakes
Gold attracts many beginners due to its volatility, but this volatility also magnifies mistakes.
Over-leveraging
Many new traders take oversized positions because gold can move quickly. Always size based on risk, not on how confident you feel.
Trading During Major US News Without a Plan
CPI, NFP, and FOMC speeches regularly create sharp spikes.
A simple rule: if you do not have a news strategy, avoid entering within 30–60 minutes before release.
Moving Stops Closer Too Early
Narrow stops often get hit by normal intraday noise. Use structure and ATR to place them correctly.
Trading Without a Clear Strategy
Gold’s speed punishes improvisation. Use structured methods.
Emotional Trading
Frustration or fear leads to revenge trades.
For help building discipline, see [LINK: Psychology and Common Mistakes in Gold Trading].
Step 10: Reviewing and Improving Your Gold Trading Process
After each trade, write down:
• Entry and exit prices
• Timeframe and setup
• Reason for entry
• Whether you followed your plan
• What you will do differently next time
A simple Excel or Google Sheet is enough. This habit helps you detect patterns in your behaviour and avoid repeating costly errors.
FAQs
How much capital do I need to start trading XAUUSD on MT4/MT5?
You can start with a small account, but the key is correct position sizing. Gold’s movements mean even small trades can produce fast gains or losses. What matters more than capital size is your ability to risk only a small percentage per trade and avoid oversized positions. Use micro lots until you are fully comfortable.
Are gold trades more risky than currency pairs?
Gold often moves faster and further than major forex pairs, especially during US data releases. This does not make it inherently more dangerous, but it does require tighter discipline, wider stops, and careful sizing. With correct risk management, trading gold can be structured and manageable even for beginners.
Which timeframe is best for trading gold?
There is no single best timeframe. Many traders use H4 to find the main trend, H1 for structure, and M15 for entries. Day traders sometimes use M5 or M1, but these require fast decision-making and are less suitable for beginners. Multi-timeframe analysis provides more reliable signals.
Should I trade gold during news events?
Only if you have a clear, tested strategy. Gold reacts violently to CPI, NFP, PPI, and Fed statements. Beginners should generally avoid trading just before these events. If you do trade news, always use predefined stops and avoid moving them away from your original level.
What lot size should I use when trading gold?
Lot size depends on your stop distance and risk percentage. Because gold’s value per point changes with lot size, always calculate the monetary risk before placing an order. Micro and mini lots offer more flexibility.
Why does gold sometimes reverse suddenly?
XAUUSD reacts quickly to macro events, liquidity shifts, and large institutional orders. Sudden reversals often occur near key levels or during session openings. Using wider stops, waiting for confirmation, and avoiding trades around major news help reduce the impact of these moves.
Is MT4 or MT5 better for trading gold?
Both platforms work well. MT5 offers more order types and more efficient trade processing, while MT4 remains familiar and widely used. Most strategies in this guide work the same way on either platform, so choose the one you feel more comfortable with.
This is not trading advice and is provided for educational purposes only.
