Gold delivers the kind of moves people come to it for. But those same moves have a flip side: an account that grew for a month can get wiped out in one evening. Below are the rules that work for me as a filter before every entry.
Risk per trade
The first thing I calculate before entering is how much money I lose if I'm wrong. Not how much I'll make - how much I'll lose. If there's no answer to that, there's no trade.
One position shouldn't take a noticeable chunk of the deposit. Not because the entry is bad, but because a string of several losses in a row is a normal occurrence, not a catastrophe. The account needs to survive it without forcing a change in trading style.
The simple consequence: size follows the stop, not the other way around. First I decide where the idea stops working, then I calculate the lot so that this exit costs an acceptable amount of money. The reverse order - picking a lot size 'by feel' and then tightening the stop to make it fit - is exactly the mistake that cuts deposits down.
What percentage of the deposit can I risk on one gold trade?
The exact number is personal, but the principle is the same: the loss on one position shouldn't change your behavior on the next one.
What should I decide first - size or stop?
First the stop level based on the logic of the idea, then the size that makes that stop acceptable in money terms.
Why is a losing streak normal?
Because any system gets it wrong sometimes, and the deposit needs to be sized for several losses in a row, not just one.
Stop-loss and volatility
A stop-loss on gold is always necessary. Not a 'mental' one, not 'I'll close it myself when I see it,' but one actually placed in the terminal. A mental stop disappears the exact moment the price moves against you fast.
The second part is stop size. Gold moves wider than many instruments, and a stop that looks roomy on a calm market gets blown through in seconds when data comes out. I keep the calendar in mind and understand: ahead of news, the range widens, along with the spread and slippage.
That doesn't mean you can't trade the news. It means entering with the same size as during a quiet session isn't justified. Either the stop is wider and the size is smaller, or there's no position at all.
Why is a mental stop worse than one actually placed?
A placed stop triggers without you having to do anything, a mental one requires a decision at the exact moment when deciding is hardest.
Should I remove the stop before a news release?
No, that's the most dangerous moment to trade unprotected; it's more logical to cut size or stay out of the market.
How do I know if my stop is too tight?
If ordinary intraday noise keeps knocking it out and the idea keeps playing out afterward, the stop was set for the size, not for the market.
Averaging down and revenge trading
Averaging down isn't forbidden in itself. What's forbidden is averaging on emotion, just because you don't want to lock in a loss. If the add-on was planned before entry - with levels, total size, and one overall stop for the whole construction - that's a plan. If the add-on gets invented the moment the position is already in the red, that's throwing the deposit a lifeline it can't afford.
A separate issue is the urge to win it back. After a loss, the hand reaches for a bigger size to get the money back faster. That way the loss doubles more often than it gets recovered. For me, the sign that it's time to close the terminal is exactly that feeling - not the number of trades taken.
The order of priorities is simple: protect the deposit first, profit second. As long as the account is intact, opportunities will come back. A blown account sees no opportunities at all.
When is averaging down acceptable?
When the add-on levels, total size, and overall stop are calculated before the first position is even opened.
What should I do after two or three losses in a row?
Cut size or take a break; go back to the previous size only after a calm run of trades made according to plan.
Why shouldn't I increase the lot to recover a loss faster?
Because the odds on the next trade haven't improved, while the cost of a mistake with a bigger lot has gone up sharply.
What determines position size on gold with a proper approach to risk?