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Guide: using futures levels as a XAUUSD CFD trader

On this page
Why futures dataWhat the basis isHow AK FlowBook shows itWhy the basis changesYour broker's priceA routine for CFD tradersThings to keep in mind

Many gold traders follow XAUUSD on a CFD platform. AK FlowBook reads COMEX gold futures (GC), because that is where exchange volume, delta and the order book are visible. This guide shows how to carry futures-based levels over to a XAUUSD chart.

Why futures data

A CFD broker's XAUUSD chart shows the broker's own quotes. Its volume is usually tick volume: the number of price changes, not contracts traded. Gold futures trade on an exchange, so every contract and every resting order is reported. That is what AK FlowBook reads.

The levels AK FlowBook draws (POC, VAH, VAL, VWAPs, session highs and lows) come from that exchange volume. The prices are GC prices. To use them on XAUUSD, you convert them with the basis.

What the basis is

GC futures and XAUUSD do not trade at the same price. A futures contract is for delivery at a later date, so its price includes the cost of carrying gold until then, mostly interest. GC usually trades above XAUUSD.

The gap between them is the basis:

  • Basis = GC price minus XAUUSD price.
  • XAU equivalent = GC level minus the basis.

Illustrative example: GC trades at 4251.0 and XAUUSD at 4222.1. The basis is 28.9. A GC level at 4260.0 is about 4231.1 in XAUUSD.

The info line shows the same gap the other way round, as XAUUSD minus GC, so it is usually negative: BASIS -28.9. With that value, you add instead of subtract: 4260.0 + (-28.9) = 4231.1.

How AK FlowBook shows it

WhereWhat you see
Session labelsThe XAU equivalent in brackets, for example LON H 4251.0 x3 (XAU 4222.1).
Info lineBASIS as XAUUSD minus GC, for example BASIS -28.9. Turn the info line on with INFO in the MORE list.
Profile and VWAP labelsGC prices only. Convert them yourself with the basis.

The XAU part appears only when a fresh basis is available (less than 5 minutes old). If the basis is missing or older, AK FlowBook hides the XAU part rather than show a stale number. See Session levels and Info line.

A session label with its XAU equivalent and the BASIS value on the info line
A session label with its XAU equivalent and the BASIS value on the info line

Why the basis changes

The basis is not fixed. Expect it to move:

  • With time to expiry. As a contract gets closer to delivery, the carry cost shrinks, so the basis gets smaller.
  • At the roll. When the market moves to the next contract month, the new contract expires later, so the basis jumps. The ROLL banner warns you in the days around a roll.
  • With interest rates. Higher rates mean a higher carry cost.
  • During fast markets. Around news, futures and spot can move a little apart for a short time.

Use the current basis. A conversion with an old basis can be off, especially across a roll.

Your broker's price

Every CFD broker quotes its own XAUUSD price, with its own spread. Your broker's price can differ from the spot reference by a small amount. So:

  • Treat each XAU equivalent as an area of a few dollars, not an exact tick.
  • Compare the XAU equivalent with your broker's chart at a recent swing high or low. If your broker is consistently a little higher or lower, keep that offset in mind.

A routine for CFD traders

  1. Open AK FlowBook on a GC 1-minute chart next to your XAUUSD chart.
  2. Check the BASIS value on the info line and the time.
  3. Note the session levels you care about. Their XAU equivalents are already on the labels.
  4. For profile and VWAP levels, add the BASIS value from the info line to the GC price, sign included.
  5. Mark these as areas on your XAUUSD chart.
  6. When price reaches one of these areas, read the order flow on the GC chart: delta, big trades, icebergs and the map. See Reading absorption.
  7. Recheck the basis during the day, and always after a roll.

Things to keep in mind

  • Order flow comes from the futures market. Your CFD position is with your broker, not on the exchange.
  • Futures and CFD trading hours differ slightly. Weekend and holiday gaps can differ too.
  • CFD charts show tick volume. Do not compare it with the futures volume in AK FlowBook.
  • CFDs are leveraged products. Check your broker's terms, costs and margin rules.
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Education only. Not financial advice. Trading futures and CFDs carries a high risk of loss.