Netting mode in gold trading

Netting mode is the position-accounting system used on exchanges and available on MT5, where there can only be one position per symbol. Each new order adds to, reduces or reverses that position, and the position’s price is the volume-weighted average of the fills.

How it applies to gold trading

In netting mode, buying 0.10 lots twice gives a single 0.20 lot position at the average price, with one stop-loss and one take-profit. Selling 0.30 lots then reverses it into a 0.10 lot short. This mirrors how futures accounts work, which is why futures traders and many institutions prefer it.

Netting removes the temptation to lock losing trades, and the account always shows its true exposure. It also requires care: a sell order intended as a separate scalp will close part of your swing position instead.

Worked example

Example (hypothetical numbers): buy 0.20 lots at 4,000, then 0.20 at 3,990. The net position is 0.40 lots at 3,995. Selling 0.10 at 4,005 books $10 × 100 × 0.10 = $100 and leaves 0.30 lots at 3,995. Selling 0.50 more would close those and open a 0.20 lot short.

Swap and margin are also calculated on the single net position, so there is never a cost for holding offsetting trades, because offsetting trades cannot exist.

A common mistake

Running an expert advisor built for hedging mode on a netting account. Its separate entries merge into one position and its exit logic can misfire.

See also: Hedging mode, Pyramiding, Partial close, Expert advisor.

Frequently asked questions