Trading Glossary
XAG/USD is the trading symbol for the price of one troy ounce of silver quoted in US dollars. "XAG" is the ISO 4217 code for silver. Silver is both a precious metal and an industrial commodity, so the pair is influenced by investor demand, industrial production, the strength of the US dollar and overall market sentiment.
A trader sees silver break above a key resistance level and buys 0.1 lots of XAG/USD. With a standard contract size of 5,000 ounces, 0.1 lots equals 500 ounces, so every $0.10 move changes the position value by $50. If silver rises $0.60, the trade gains $300.
Silver is known for larger percentage swings than gold. A move that looks small on the chart can add up quickly, especially with larger positions.
For prop traders, this means calculating the position size from the stop-loss distance before every entry. Keeping the risk per trade at 0.5 to 1% of the account helps absorb the volatility of XAG/USD without breaching the daily or maximum drawdown limit.
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