Difference Between (Small Lot Sizes in XAUUSD) vs. (Larger Lot Sizes in EURUSD)
XAUUSD’s movements are much larger and faster than EURUSD. Some people therefore may want to take advantage of XAUUSD’s larger/faster movements so they can profit more. But here’s my question:
Wouldn’t trading EURUSD with larger lot sizes be the same as trading XAUUSD with smaller lot sizes?
Why would anyone choose XAUUSD if they can do the same thing in EURUSD with larger lot sizes?
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For instance, right this moment, looking at XAUUSD M1’s latest 300 bars, the difference between the highest point and the lowest point is: around 2500 points. Whereas the same thing in EURUSD M1 is around 154 points. So around 16 times more movement.
My point is, instead of trading XAUUSD which is probably riskier, how about trading EURUSD but increase the lot size (4 or 8 or even 16 times) to profit the same amount?
Does that make sense?
Makes no sense. One is the gold spot price the other the euro/dollar price they are completely different markets with different risk profiles.
I understand if the risk is different and I think that's exactly what I'm trying to kind of get my head around. At 1 standard Lot, 1 point of movement is XAUUSD is $1, and 1 point of movement in EURUSD is also $1. XAUUSD usually moves much more and faster. EURUSD does not usually move as much and as fast.
So like the example I gave above, would it be correct to say, since EURUSD does not move as much as XAUUSD, then one can profit/lose as much as XAUUSD, if one would increase their Lot Size when trading EURUSD?
I understand if the risk is different and I think that's exactly what I'm trying to kind of get my head around. At 1 standard Lot, 1 point of movement is XAUUSD is $1, and 1 point of movement in EURUSD is also $1. XAUUSD usually moves much more and faster. EURUSD does not usually move as much and as fast.
So like the example I gave above, would it be correct to say, since EURUSD does not move as much as XAUUSD, then one can profit/lose as much as XAUUSD, if one would increase their Lot Size when trading EURUSD?
you are comparing apples and oranges.... you might as well pick any two financial instruments and make such a comparison, under your logic why not compare EURUSD to crude oil or the price of pinapples etc...
every instrument has it's own risk profile and volatility, the only thing you are focusing on is volatility which on it's own is not a reason to trade anything....
if you want to move from gold to eurusd because of volatility, then increasing the lot size on eurusd to compensate makes that move meaningless because now you will gain/lose on much fewer points so you have made the risk the same from a volatility perspective
Makes no sense. One is the gold spot price the other the euro/dollar price they are completely different markets with different risk profiles.
I know Gold is very risky to trade but at the same time are trade are risky, abs using 16 times your lot size on EURUSD is not the solution. To me that’s even more dangerous, I will advise you study the market better and always look for a good entry most people will just enter the trade from any point and when it goes back to the entry point to give a better high they are already out of the market, so use your strategy well look for a good entry and that’s all, don’t forget all pair are risky.
I think you meant that comment for the OP....
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Wouldn’t trading EURUSD with larger lot sizes be the same as trading XAUUSD with smaller lot sizes?
Why would anyone choose XAUUSD if they can do the same thing in EURUSD with larger lot sizes?
--------
For instance, right this moment, looking at XAUUSD M1’s latest 300 bars, the difference between the highest point and the lowest point is: around 2500 points. Whereas the same thing in EURUSD M1 is around 154 points. So around 16 times more movement.
My point is, instead of trading XAUUSD which is probably riskier, how about trading EURUSD but increase the lot size (4 or 8 or even 16 times) to profit the same amount?
Does that make sense?